Exit options for Biglaw Tax associate? (non-Exec Comp) Forum

[Anonymous User]

Hi all,

I'm a first-year tax associate at a V100 firm's tax practice. I've focused on US federal tax, with a good mix of international and domestic planning and deal work. I don't do executive comp, state and local tax, employee benefits, etc.

However, I'm frustrated/unsatisfied with most of the work I've been doing and am not sure whether I'd like to stay in the tax field. It's hard to say whether my dissatisfaction is due to growing pains that will subside with time or whether I simply don't like doing tax. I expect it's a mixture of both, though I'm unsure.

I'm considering trying to pivot by lateraling to a general corporate position -- and I'm OK with being docked to a first-year -- but part of the issue is that I'm not sure what my exit options look like if I continue with tax. In either case, I'd probably expect to leave biglaw after 3-4 years. Do most ex-biglaw tax associates with general deal/planning experience go in-house and work within tax departments of large corporations? Big4? Open up their own shops? Is it accurate to say that corporate attorneys are generally more likely to work in-house at a company than tax attorneys are (whether the tax attorneys stay in biglaw, boutique law, work at accounting firms, hang up a shingle, etc). And in particular, does anyone have a sense of how the general salaries/marketability for those tax positions compares with general corporate in-house positions? For example, I understand that corporate in-house positions following biglaw can generally range from, say, $150-250k with some predictability, and can often increase from there after working up the ranks at a large company. Does the same hold true for tax associates that go in-house? For example, do tax attorneys typically 'top out' at a lower salary level than most successful corporate attorneys? [For the sake of discussion, I understand that a corporate attorney may be more likely to 'hit big' on the rare very top level GC-type position, but I'm less concerned with 'hitting big' and instead more of the general experience.] Note that I'm mostly concerned with what the experience will be like after leaving biglaw; I know that a biglaw tax associate's day-to-day environment is typically more predictable than a biglaw corporate associate's schedule, but I'm not sure to what extent that difference holds true after either associate goes in-house (or otherwise).

I know the question of whether I should try to pivot should depend on whether "I like tax." But in the absence of being able to confidently say whether I like it or not, it's helpful to get an understand of what the options are if I were to stay in the field.

Thanks all very much for any thoughts or advice. I'm happy to come off anon through PM, if desired.

[hulunetflix]

OP - feel free to send me a private message if you want to know more. I think the exit options are bad/almost nonexistent. It's also hard to switch practice after your first year, but I know people who have done it.

[Sackboy]

Based on what I've seen from some of my co-workers, U.S./international federal tax planning is highly marketable for in-house tax positions, and in-house tax positions are generally plentiful relative to the size of the tax bar and well-compensated. If you don't like tax, however, none of that really matters. I'd try to switch into general corporate work. On an absolute basis, you'll have more job opportunities (though I doubt it'll be much more on a relative basis). The compensation will largely be similar, but M&A folks are much more likely to climb within an in-house legal department; tax folks generally have a harder time snagging senior corporate legal roles and have a better prospect of trying to land VP of Tax roles, which does not sit in legal and likely directly reports to the CFO and not GC.

[hulunetflix]

Based on what I've seen from some of my co-workers, U.S./international federal tax planning is highly marketable for in-house tax positions, and in-house tax positions are generally plentiful relative to the size of the tax bar and well-compensated. If you don't like tax, however, none of that really matters. I'd try to switch into general corporate work. On an absolute basis, you'll have more job opportunities (though I doubt it'll be much more on a relative basis). The compensation will largely be similar, but M&A folks are much more likely to climb within an in-house legal department; tax folks generally have a harder time snagging senior corporate legal roles and have a better prospect of trying to land VP of Tax roles, which does not sit in legal and likely directly reports to the CFO and not GC.

Mind sharing how do most folks land their in-house tax positions? Maybe I wasn't looking at the right place, but I haven't seen any in-house tax positions posted in the past year or so (besides a couple of ERISA positions). Thanks!

[Sackboy]

Mind sharing how do most folks land their in-house tax positions? Maybe I wasn't looking at the right place, but I haven't seen any in-house tax positions posted in the past year or so (besides a couple of ERISA positions). Thanks!

I can't speak for my co-workers, because I never asked.

When I'm considering the leap in-house (about every other day, I normally have success finding gigs in my niche on GoInhouse (note: I am in no way affiliated with the company and have no actual experience applying through their website). Here is a query for "Tax" positions. There seems to be a decent number of opportunities on the first page. Beyond that, they look more like general corporate gigs. I know just typing in "tax counsel jobs" in Google showed a few more (at least in my major metro). I think you just need to shop around the various job boards. I know I've seen some listings on LinkedIn too.

If you have a good relationship with your partners and are competent, there is also the option of asking them to keep a lookout for client opportunities. A good partner will try to help you find a landing spot. It's in their best interest after all.

[nealric]

I'm in-house tax and happy to answer specific questions.

As you already intimated, the real question shouldn't be "exit options", but whether you really want to do tax or not. You've said you are "frustrated' by the work. What is frustrating to you? Is there something inherent about tax, or do you simply not like junior work?

But to answer your exit option question: I think in-house is probably easier to get as a tax person compared to general corporate. There are far fewer in-house tax positions numerically, but also far fewer qualified applicants. It helps if you have an accounting background/CPA designation on top of your tax legal background (full disclosure: I did not), as in-house tax tends to be closer to the numbers than biglaw tax. Upside potential is probably similar. Perhaps slightly less chance of becoming GC (you'd need to transition out of tax to get there), but you also have the VP/head of Tax role to work up to. Comp should be about the same as corporate (at least on initial hire).

One issue to be cognizant of is that in-house tax law is a bit of a "go big or go home" situation. Only very large companies have in-house tax lawyers, but a lot of middle market companies have in-house corporate. Tax planning/controversy work can be outsourced more easily than the compliance function. Only the very largest have in-house tax law departments willing and able to train someone relatively new.

Best way to get hired is to know someone at the company. Doesn't need to be your best buddy- even a friend of a friend can do. Clients are a good way to get to know someone at the company.

[Anonymous User]

I'm in-house tax and happy to answer specific questions.

As you already intimated, the real question shouldn't be "exit options", but whether you really want to do tax or not. You've said you are "frustrated' by the work. What is frustrating to you? Is there something inherent about tax, or do you simply not like junior work?

But to answer your exit option question: I think in-house is probably easier to get as a tax person compared to general corporate. There are far fewer in-house tax positions numerically, but also far fewer qualified applicants. It helps if you have an accounting background/CPA designation on top of your tax legal background (full disclosure: I did not), as in-house tax tends to be closer to the numbers than biglaw tax. Upside potential is probably similar. Perhaps slightly less chance of becoming GC (you'd need to transition out of tax to get there), but you also have the VP/head of Tax role to work up to. Comp should be about the same as corporate (at least on initial hire).

One issue to be cognizant of is that in-house tax law is a bit of a "go big or go home" situation. Only very large companies have in-house tax lawyers, but a lot of middle market companies have in-house corporate. Tax planning/controversy work can be outsourced more easily than the compliance function. Only the very largest have in-house tax law departments willing and able to train someone relatively new.

Best way to get hired is to know someone at the company. Doesn't need to be your best buddy- even a friend of a friend can do. Clients are a good way to get to know someone at the company.

Hi, thanks for your sharing! I am a 2L with accounting background & a little accounting working experience before I came to law school, and thinking about choosing tax as my profession in the upcoming summer. Many people told me that there is a great need for the tax attorneys, but I wonder if the tax attorney roles would be highly related to compliance function, rather than the legal/advisory function? If I stay in the firm, is it harder to make to partner because the tax attorneys are more like experts rather than rainmakers? Although I have accounting background, I hate in-house compliance work. Thanks!

[Anonymous User]

Based on what I've seen from some of my co-workers, U.S./international federal tax planning is highly marketable for in-house tax positions, and in-house tax positions are generally plentiful relative to the size of the tax bar and well-compensated. If you don't like tax, however, none of that really matters. I'd try to switch into general corporate work. On an absolute basis, you'll have more job opportunities (though I doubt it'll be much more on a relative basis). The compensation will largely be similar, but M&A folks are much more likely to climb within an in-house legal department; tax folks generally have a harder time snagging senior corporate legal roles and have a better prospect of trying to land VP of Tax roles, which does not sit in legal and likely directly reports to the CFO and not GC.

Hi! Wondering if a VP of Tax role would be more a compliance role?

[Sackboy]

Hi! Wondering if a VP of Tax role would be more a compliance role?

It'll be company specific, but there is generally some split between compliance and planning.

[nealric]

I'm in-house tax and happy to answer specific questions.

As you already intimated, the real question shouldn't be "exit options", but whether you really want to do tax or not. You've said you are "frustrated' by the work. What is frustrating to you? Is there something inherent about tax, or do you simply not like junior work?

But to answer your exit option question: I think in-house is probably easier to get as a tax person compared to general corporate. There are far fewer in-house tax positions numerically, but also far fewer qualified applicants. It helps if you have an accounting background/CPA designation on top of your tax legal background (full disclosure: I did not), as in-house tax tends to be closer to the numbers than biglaw tax. Upside potential is probably similar. Perhaps slightly less chance of becoming GC (you'd need to transition out of tax to get there), but you also have the VP/head of Tax role to work up to. Comp should be about the same as corporate (at least on initial hire).

One issue to be cognizant of is that in-house tax law is a bit of a "go big or go home" situation. Only very large companies have in-house tax lawyers, but a lot of middle market companies have in-house corporate. Tax planning/controversy work can be outsourced more easily than the compliance function. Only the very largest have in-house tax law departments willing and able to train someone relatively new.

Best way to get hired is to know someone at the company. Doesn't need to be your best buddy- even a friend of a friend can do. Clients are a good way to get to know someone at the company.

Hi, thanks for your sharing! I am a 2L with accounting background & a little accounting working experience before I came to law school, and thinking about choosing tax as my profession in the upcoming summer. Many people told me that there is a great need for the tax attorneys, but I wonder if the tax attorney roles would be highly related to compliance function, rather than the legal/advisory function? If I stay in the firm, is it harder to make to partner because the tax attorneys are more like experts rather than rainmakers? Although I have accounting background, I hate in-house compliance work. Thanks!

Tax attorneys rarely do much compliance work if they are being hired as such. The compliance function is fundamentally an accounting role and is generally handled by CPAs. However, someone who is both a CPA and an attorney may end up in a compliance role, and there is benefit to having both credentials.

As for making partner in a law firm. I don't think it's harder than general corporate/lit. You are correct that tax attorneys are usually not rainmakers (though a few are), but tax departments typically operate with a lot less leverage. A firm with 75 corporate attorneys in a given office will have fewer than a dozen tax attorneys, and there will typically be no more than one tax associate hired per class year. Even though many tax departments are service groups, they do tend to be a rather essential one to the corporate group. You can jettison your T&E group, but you can't jettison your tax group as a biglaw firm with a corporate practice.

Tax also commands very high billing rates (some of the highest billing partners in a firm are often the tax partners), so they can be very profitable even if they are essentially service partners.

[nealric]

Based on what I've seen from some of my co-workers, U.S./international federal tax planning is highly marketable for in-house tax positions, and in-house tax positions are generally plentiful relative to the size of the tax bar and well-compensated. If you don't like tax, however, none of that really matters. I'd try to switch into general corporate work. On an absolute basis, you'll have more job opportunities (though I doubt it'll be much more on a relative basis). The compensation will largely be similar, but M&A folks are much more likely to climb within an in-house legal department; tax folks generally have a harder time snagging senior corporate legal roles and have a better prospect of trying to land VP of Tax roles, which does not sit in legal and likely directly reports to the CFO and not GC.

Hi! Wondering if a VP of Tax role would be more a compliance role?

Titles can vary, but a VP of Tax is usually the head of tax for the entire company. As such, they are ultimately responsible for everything that touches tax including planning, compliance, and controversy. At larger companies, it's as much a people management and communication job as much as a tax job per-se. The most essential skill for a VP of tax is to be able to translate tax in to language the business unit can understand and communicate to investors. However, at a smaller company (especially a non-public one), it may be a lot more compliance heavy.

The biggest obstacle for attorneys trying to snag VP tax roles is usually lack of accounting knowledge (or at least accounting knowledge that is demonstrable to the decision makers hiring for the role). The VP of tax needs to be an expert in tax accounting (by that I mean ASC740 and other rules that impact how tax is shown on financial statements, rather than the class labeled "tax accounting" in LLM programs that concerns timing of income recognition). Even dual CPA/JD folks often don't have as much experience with that process as CPAs who've come up through the company ranks. To be sure, there are plenty of tax attorneys serving as VP of tax, but it's going to be more difficult if you don't have any accounting background prior to going in-house.

Some larger companies will also have a GC-Tax title, who is usually the primary tax planner. Finally, some companies do have tax attorneys who sit with the law department and report up through the GC. Some companies even have tax folks who sit with business development.

[Anonymous User]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

[nealric]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

Personally, I wouldn't have much interest in working at the IRS under its current condition. Morale there has been pretty low over the last few years due to underfunding and the fact that it's often a punching bag for politicians. I don't think work-life balance will be materially different than in-house. On one hand, the IRS is really understaffed so you could easily pull long hours. On the other hand, there's likely less expectation for you to be a hero than there might be in an understaffed corporate tax department. Biggest benefit to a government role like that is job security. The IRS is unlikely to experience mass layoffs like is relatively common at large companies, and you don't have up or out pressure like with biglaw.

A final note (which may or may not matter to you), is most of the higher profile stuff at the IRS where you really get to make policy and set yourself up to lateral to Big4 or Biglaw as partner is going to be done in D.C. If you want to work in a satellite office, you will likely have to accept lower profile work.

As for difficulty in making the move, I really don't know. One one hand, it's a less desirable position compared to in-house, on the other hand government agencies often hire in waves based on the budgeting process. If you aren't in a current "wave" it may be nearly impossible regardless of your credentials. During a wave, it may be relatively easy. The current administration may be a bit more generous than the past, and may allocate more money for hiring, which could make it a good time to be hired in the near future.

[Anonymous User]

One route no one is talking about here is working at a boutique tax firm. I worked at one and I think it is drastically different from biglaw tax. There’s a lot more substantive work (which makes your hours more mentally taxing), but it’s a lot more exciting to do. I’ve done both biglaw and boutique (at one of the big name boutiques) and heavily prefer the type of work at the boutiques.

If OP or anyone is actually interested in tax, I would at least try one of these firms out.

[Anonymous User]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

Personally, I wouldn't have much interest in working at the IRS under its current condition. Morale there has been pretty low over the last few years due to underfunding and the fact that it's often a punching bag for politicians. I don't think work-life balance will be materially different than in-house. On one hand, the IRS is really understaffed so you could easily pull long hours. On the other hand, there's likely less expectation for you to be a hero than there might be in an understaffed corporate tax department. Biggest benefit to a government role like that is job security. The IRS is unlikely to experience mass layoffs like is relatively common at large companies, and you don't have up or out pressure like with biglaw.

A final note (which may or may not matter to you), is most of the higher profile stuff at the IRS where you really get to make policy and set yourself up to lateral to Big4 or Biglaw as partner is going to be done in D.C. If you want to work in a satellite office, you will likely have to accept lower profile work.

As for difficulty in making the move, I really don't know. One one hand, it's a less desirable position compared to in-house, on the other hand government agencies often hire in waves based on the budgeting process. If you aren't in a current "wave" it may be nearly impossible regardless of your credentials. During a wave, it may be relatively easy. The current administration may be a bit more generous than the past, and may allocate more money for hiring, which could make it a good time to be hired in the near future.

Thanks for your feedback. I was thinking main draw of IRS would be having a strict 9-5 with no nights/weekends plus a ton of paid time off (30+ days/year), but any IRS employees can correct me if this is not actually the case. Guess similar arrangements could also be found in-house/tax boutique as well. Also, as someone who doesn't have much of an accounting/CPA background, being able to focus strictly on the tax law (e.g., drafting Rev. Ruls, tax litigation) seems like a benefit as well.

[nealric]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

Personally, I wouldn't have much interest in working at the IRS under its current condition. Morale there has been pretty low over the last few years due to underfunding and the fact that it's often a punching bag for politicians. I don't think work-life balance will be materially different than in-house. On one hand, the IRS is really understaffed so you could easily pull long hours. On the other hand, there's likely less expectation for you to be a hero than there might be in an understaffed corporate tax department. Biggest benefit to a government role like that is job security. The IRS is unlikely to experience mass layoffs like is relatively common at large companies, and you don't have up or out pressure like with biglaw.

A final note (which may or may not matter to you), is most of the higher profile stuff at the IRS where you really get to make policy and set yourself up to lateral to Big4 or Biglaw as partner is going to be done in D.C. If you want to work in a satellite office, you will likely have to accept lower profile work.

As for difficulty in making the move, I really don't know. One one hand, it's a less desirable position compared to in-house, on the other hand government agencies often hire in waves based on the budgeting process. If you aren't in a current "wave" it may be nearly impossible regardless of your credentials. During a wave, it may be relatively easy. The current administration may be a bit more generous than the past, and may allocate more money for hiring, which could make it a good time to be hired in the near future.

Thanks for your feedback. I was thinking main draw of IRS would be having a strict 9-5 with no nights/weekends plus a ton of paid time off (30+ days/year), but any IRS employees can correct me if this is not actually the case. Guess similar arrangements could also be found in-house/tax boutique as well. Also, as someone who doesn't have much of an accounting/CPA background, being able to focus strictly on the tax law (e.g., drafting Rev. Ruls, tax litigation) seems like a benefit as well.

My in-house gig is pretty much 9-5 with very few nights and weekend (maybe 1 weekend a year tops). Only exception to that is I travel in-house a few times a year (well, pre-COVID), which can result in odd travel hours for international flights. I do things that aren't strictly tax law (things like coordinating cash management with treasury or reviewing engagement letters), but I don't do any significant compliance work or other things better handled by accountants.

[Anonymous User]

Related to these questions, does getting an NYU executive LLM materially improve the chances of landing these gigs? Or would I likely just be overworking myself working at a V100 and getting an LLM at the same time?

[Anonymous User]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

Personally, I wouldn't have much interest in working at the IRS under its current condition. Morale there has been pretty low over the last few years due to underfunding and the fact that it's often a punching bag for politicians. I don't think work-life balance will be materially different than in-house. On one hand, the IRS is really understaffed so you could easily pull long hours. On the other hand, there's likely less expectation for you to be a hero than there might be in an understaffed corporate tax department. Biggest benefit to a government role like that is job security. The IRS is unlikely to experience mass layoffs like is relatively common at large companies, and you don't have up or out pressure like with biglaw.

A final note (which may or may not matter to you), is most of the higher profile stuff at the IRS where you really get to make policy and set yourself up to lateral to Big4 or Biglaw as partner is going to be done in D.C. If you want to work in a satellite office, you will likely have to accept lower profile work.

As for difficulty in making the move, I really don't know. One one hand, it's a less desirable position compared to in-house, on the other hand government agencies often hire in waves based on the budgeting process. If you aren't in a current "wave" it may be nearly impossible regardless of your credentials. During a wave, it may be relatively easy. The current administration may be a bit more generous than the past, and may allocate more money for hiring, which could make it a good time to be hired in the near future.

Thanks for your feedback. I was thinking main draw of IRS would be having a strict 9-5 with no nights/weekends plus a ton of paid time off (30+ days/year), but any IRS employees can correct me if this is not actually the case. Guess similar arrangements could also be found in-house/tax boutique as well. Also, as someone who doesn't have much of an accounting/CPA background, being able to focus strictly on the tax law (e.g., drafting Rev. Ruls, tax litigation) seems like a benefit as well.

My in-house gig is pretty much 9-5 with very few nights and weekend (maybe 1 weekend a year tops). Only exception to that is I travel in-house a few times a year (well, pre-COVID), which can result in odd travel hours for international flights. I do things that aren't strictly tax law (things like coordinating cash management with treasury or reviewing engagement letters), but I don't do any significant compliance work or other things better handled by accountants.

Had some more questions on in-house tax and thought I would revive this thread instead of starting a new one. Thanks all who have contributed so far!

I’m a junior biglaw tax associate in a major market (non-NY) coming up on my midlevel years and am starting to think about what I need to do to pivot to an in-house role in the next few years. Should I be trying to get more work in an particular substantive area? I assume getting as much exposure as possible to corporate tax is much more important than mastering all of the technical rules in subchapter K (if aiming for in-house at a large public company). I would think it would also be quite useful to have a good handle on international tax and the consolidated return rules. I do almost exclusively deal work, so in terms of how that actually maps onto work that is available to me, it looks like M&A-related work is probably the best way to get more exposure to this. I realize that the mix of work at any particular biglaw firm is going to be different, but broadly speaking, is there any other type of biglaw tax work that would be seen as providing a good background for in-house? Should I be trying to get more experience in controversy work (my firm doesn’t do too much of it, and to the extent I’ve gotten any exposure, it’s usually researching some narrow issue rather than being looped into the controversy process as a whole, which I assume is what would be more useful)?

I’m also a bit concerned about lack of any sort of accounting experience/knowledge on my part. Should I be trying to close this knowledge gap somehow, or is that a lost cause to some extent and perhaps I should be leaning into the skills that set apart a tax attorney from a non-legal tax professional (which, it’s very clear to me what those are when you’re talking about an M&A deal, less so when thinking about in-house tax, particularly in areas like planning and compliance)?

Thanks again!

[nealric]

Different anon here, thinking about making a similar move. Any thoughts on exits from biglaw tax to tax lawyer at the IRS? I.e., how desirable an IRS job would be or how difficult it would be to make this move? Pay seems to be lower than in-house, but much better work-life balance.

Personally, I wouldn't have much interest in working at the IRS under its current condition. Morale there has been pretty low over the last few years due to underfunding and the fact that it's often a punching bag for politicians. I don't think work-life balance will be materially different than in-house. On one hand, the IRS is really understaffed so you could easily pull long hours. On the other hand, there's likely less expectation for you to be a hero than there might be in an understaffed corporate tax department. Biggest benefit to a government role like that is job security. The IRS is unlikely to experience mass layoffs like is relatively common at large companies, and you don't have up or out pressure like with biglaw.

A final note (which may or may not matter to you), is most of the higher profile stuff at the IRS where you really get to make policy and set yourself up to lateral to Big4 or Biglaw as partner is going to be done in D.C. If you want to work in a satellite office, you will likely have to accept lower profile work.

As for difficulty in making the move, I really don't know. One one hand, it's a less desirable position compared to in-house, on the other hand government agencies often hire in waves based on the budgeting process. If you aren't in a current "wave" it may be nearly impossible regardless of your credentials. During a wave, it may be relatively easy. The current administration may be a bit more generous than the past, and may allocate more money for hiring, which could make it a good time to be hired in the near future.

Thanks for your feedback. I was thinking main draw of IRS would be having a strict 9-5 with no nights/weekends plus a ton of paid time off (30+ days/year), but any IRS employees can correct me if this is not actually the case. Guess similar arrangements could also be found in-house/tax boutique as well. Also, as someone who doesn't have much of an accounting/CPA background, being able to focus strictly on the tax law (e.g., drafting Rev. Ruls, tax litigation) seems like a benefit as well.

My in-house gig is pretty much 9-5 with very few nights and weekend (maybe 1 weekend a year tops). Only exception to that is I travel in-house a few times a year (well, pre-COVID), which can result in odd travel hours for international flights. I do things that aren't strictly tax law (things like coordinating cash management with treasury or reviewing engagement letters), but I don't do any significant compliance work or other things better handled by accountants.

Had some more questions on in-house tax and thought I would revive this thread instead of starting a new one. Thanks all who have contributed so far!

I’m a junior biglaw tax associate in a major market (non-NY) coming up on my midlevel years and am starting to think about what I need to do to pivot to an in-house role in the next few years. Should I be trying to get more work in an particular substantive area? I assume getting as much exposure as possible to corporate tax is much more important than mastering all of the technical rules in subchapter K (if aiming for in-house at a large public company). I would think it would also be quite useful to have a good handle on international tax and the consolidated return rules. I do almost exclusively deal work, so in terms of how that actually maps onto work that is available to me, it looks like M&A-related work is probably the best way to get more exposure to this. I realize that the mix of work at any particular biglaw firm is going to be different, but broadly speaking, is there any other type of biglaw tax work that would be seen as providing a good background for in-house? Should I be trying to get more experience in controversy work (my firm doesn’t do too much of it, and to the extent I’ve gotten any exposure, it’s usually researching some narrow issue rather than being looped into the controversy process as a whole, which I assume is what would be more useful)?

I’m also a bit concerned about lack of any sort of accounting experience/knowledge on my part. Should I be trying to close this knowledge gap somehow, or is that a lost cause to some extent and perhaps I should be leaning into the skills that set apart a tax attorney from a non-legal tax professional (which, it’s very clear to me what those are when you’re talking about an M&A deal, less so when thinking about in-house tax, particularly in areas like planning and compliance)?

Thanks again!

I think the substantive knowledge that's important can be really dependent on the company. Some large companies need Subchapter K experts because they do a lot of JVs, tax equity deals, or run an MLP. Other large companies need International experts because they have a complicated international structure. It really depends on the company's business.

Overall, I think it's helpful to have a relatively broad expertise, and you aren't expected to be an expert in any particular sub field (with a few exceptions). If there's something you haven't done much of, it's probably not fatal unless the company does a lot of it.

It's nice to know at least a little on the controversy side if for no other reason to make you a better planner. In house, you end up having to actually implement step plans rather than just think of them, and a lot of the details of implementation can matter as much as the overall plan come audit time. Having been through rounds of IDRs can help when you are thinking about those details. Larger companies will often have full-time audit managers, but may look to law for support for positions and to do technical analyses of positions. Controversies that make it to tax court may be worked primarily by attorneys, but outside counsel is also involved at that stage.

As for accounting knowledge- in my experience most CPAs tend to assume attorneys are idiots on the accounting side (unless they are CPAs too). And to be fair, most attorneys who are not CPAs and have only worked in law firms don't have a very good sense of the accounting treatment of the transactions they work on. But you do end up picking up a lot of accounting knowledge working in-house. You learn that sometimes transactions that work great from a cash tax standpoint can cause problematic tax accounting results and as you get to know the company, you can often identify those issues before you go too far down planning rabbit holes.

In any event, how being an attorney is looked at may depend on the company. If you are at a huge company with a dozen or more tax attorneys, it's very different from being at a smaller company where you might be the only attorney in a tax group that is mostly accountants. There can be an inherent human bias of hiring people that have similar backgrounds to them, so CPAs who spent 10 years in Big 4 may be looking for other CPAs with 10 years Big 4 experience.

[CanadianWolf]

@nealric: Wouldn't tax controversy matters be handled by outside counsel ?

Thank you in advance.

[nealric]

@nealric: Wouldn't tax controversy matters be handled by outside counsel ?

Thank you in advance.

We usually handle audit-level items in-house unless they are very big and likely to head to appeals and/or tax court. This is especially true at the initial inquiry stage (i.e. answering IDRs) where the likelihood of significant issues arising is low. Keep in mind that many large companies are under continuous audit, so that sort of thing is pretty "business as usual."

Administrative appeals will depend on the matter, but we've often handled them in-house with outside counsel support (especially at the state level). We may write and argue the appeal but have outside counsel advise and review everything.

Anything in tax court (or other formal judicial proceeding) would absolutely be handled by outside counsel, but just because you get outside counsel involved doesn't mean you just wash your hands of it and check out. You are still actively involved in the matter.

[CanadianWolf]

Thank you @nealric for your response.

[Anonymous User]

Had some more questions on in-house tax and thought I would revive this thread instead of starting a new one. Thanks all who have contributed so far!

I’m a junior biglaw tax associate in a major market (non-NY) coming up on my midlevel years and am starting to think about what I need to do to pivot to an in-house role in the next few years. Should I be trying to get more work in an particular substantive area? I assume getting as much exposure as possible to corporate tax is much more important than mastering all of the technical rules in subchapter K (if aiming for in-house at a large public company). I would think it would also be quite useful to have a good handle on international tax and the consolidated return rules. I do almost exclusively deal work, so in terms of how that actually maps onto work that is available to me, it looks like M&A-related work is probably the best way to get more exposure to this. I realize that the mix of work at any particular biglaw firm is going to be different, but broadly speaking, is there any other type of biglaw tax work that would be seen as providing a good background for in-house? Should I be trying to get more experience in controversy work (my firm doesn’t do too much of it, and to the extent I’ve gotten any exposure, it’s usually researching some narrow issue rather than being looped into the controversy process as a whole, which I assume is what would be more useful)?

I’m also a bit concerned about lack of any sort of accounting experience/knowledge on my part. Should I be trying to close this knowledge gap somehow, or is that a lost cause to some extent and perhaps I should be leaning into the skills that set apart a tax attorney from a non-legal tax professional (which, it’s very clear to me what those are when you’re talking about an M&A deal, less so when thinking about in-house tax, particularly in areas like planning and compliance)?

Thanks again!

I think the substantive knowledge that's important can be really dependent on the company. Some large companies need Subchapter K experts because they do a lot of JVs, tax equity deals, or run an MLP. Other large companies need International experts because they have a complicated international structure. It really depends on the company's business.

Overall, I think it's helpful to have a relatively broad expertise, and you aren't expected to be an expert in any particular sub field (with a few exceptions). If there's something you haven't done much of, it's probably not fatal unless the company does a lot of it.

It's nice to know at least a little on the controversy side if for no other reason to make you a better planner. In house, you end up having to actually implement step plans rather than just think of them, and a lot of the details of implementation can matter as much as the overall plan come audit time. Having been through rounds of IDRs can help when you are thinking about those details. Larger companies will often have full-time audit managers, but may look to law for support for positions and to do technical analyses of positions. Controversies that make it to tax court may be worked primarily by attorneys, but outside counsel is also involved at that stage.

As for accounting knowledge- in my experience most CPAs tend to assume attorneys are idiots on the accounting side (unless they are CPAs too). And to be fair, most attorneys who are not CPAs and have only worked in law firms don't have a very good sense of the accounting treatment of the transactions they work on. But you do end up picking up a lot of accounting knowledge working in-house. You learn that sometimes transactions that work great from a cash tax standpoint can cause problematic tax accounting results and as you get to know the company, you can often identify those issues before you go too far down planning rabbit holes.

In any event, how being an attorney is looked at may depend on the company. If you are at a huge company with a dozen or more tax attorneys, it's very different from being at a smaller company where you might be the only attorney in a tax group that is mostly accountants. There can be an inherent human bias of hiring people that have similar backgrounds to them, so CPAs who spent 10 years in Big 4 may be looking for other CPAs with 10 years Big 4 experience.

Thanks—really appreciate the response.

So if there’s nothing I should be doing from a substantive knowledge perspective other than making sure I get broad exposure, is there anything else I can be doing to position myself better for an in-house role, or should I just plan on chugging along for a couple more years and expect to be in a pretty good position just by virtue of coming from a name brand law firm and having enough seniority? And I assume the conventional wisdom of 5th year or so being the sweet spot for in-house exits is equally applicable to tax?

Nice to hear about audit managers at larger companies that handle the low-level controversy work. Sounds like something that would be good to avoid if possible in a tax counsel position (though I’m guessing you can’t be too picky given the relatively small size of the market). What would compliance work look like for tax counsel? Is that also more in the vein of support for positions taken on returns?

[nealric]

Had some more questions on in-house tax and thought I would revive this thread instead of starting a new one. Thanks all who have contributed so far!

I’m a junior biglaw tax associate in a major market (non-NY) coming up on my midlevel years and am starting to think about what I need to do to pivot to an in-house role in the next few years. Should I be trying to get more work in an particular substantive area? I assume getting as much exposure as possible to corporate tax is much more important than mastering all of the technical rules in subchapter K (if aiming for in-house at a large public company). I would think it would also be quite useful to have a good handle on international tax and the consolidated return rules. I do almost exclusively deal work, so in terms of how that actually maps onto work that is available to me, it looks like M&A-related work is probably the best way to get more exposure to this. I realize that the mix of work at any particular biglaw firm is going to be different, but broadly speaking, is there any other type of biglaw tax work that would be seen as providing a good background for in-house? Should I be trying to get more experience in controversy work (my firm doesn’t do too much of it, and to the extent I’ve gotten any exposure, it’s usually researching some narrow issue rather than being looped into the controversy process as a whole, which I assume is what would be more useful)?

I’m also a bit concerned about lack of any sort of accounting experience/knowledge on my part. Should I be trying to close this knowledge gap somehow, or is that a lost cause to some extent and perhaps I should be leaning into the skills that set apart a tax attorney from a non-legal tax professional (which, it’s very clear to me what those are when you’re talking about an M&A deal, less so when thinking about in-house tax, particularly in areas like planning and compliance)?

Thanks again!

I think the substantive knowledge that's important can be really dependent on the company. Some large companies need Subchapter K experts because they do a lot of JVs, tax equity deals, or run an MLP. Other large companies need International experts because they have a complicated international structure. It really depends on the company's business.

Overall, I think it's helpful to have a relatively broad expertise, and you aren't expected to be an expert in any particular sub field (with a few exceptions). If there's something you haven't done much of, it's probably not fatal unless the company does a lot of it.

It's nice to know at least a little on the controversy side if for no other reason to make you a better planner. In house, you end up having to actually implement step plans rather than just think of them, and a lot of the details of implementation can matter as much as the overall plan come audit time. Having been through rounds of IDRs can help when you are thinking about those details. Larger companies will often have full-time audit managers, but may look to law for support for positions and to do technical analyses of positions. Controversies that make it to tax court may be worked primarily by attorneys, but outside counsel is also involved at that stage.

As for accounting knowledge- in my experience most CPAs tend to assume attorneys are idiots on the accounting side (unless they are CPAs too). And to be fair, most attorneys who are not CPAs and have only worked in law firms don't have a very good sense of the accounting treatment of the transactions they work on. But you do end up picking up a lot of accounting knowledge working in-house. You learn that sometimes transactions that work great from a cash tax standpoint can cause problematic tax accounting results and as you get to know the company, you can often identify those issues before you go too far down planning rabbit holes.

In any event, how being an attorney is looked at may depend on the company. If you are at a huge company with a dozen or more tax attorneys, it's very different from being at a smaller company where you might be the only attorney in a tax group that is mostly accountants. There can be an inherent human bias of hiring people that have similar backgrounds to them, so CPAs who spent 10 years in Big 4 may be looking for other CPAs with 10 years Big 4 experience.

Thanks—really appreciate the response.

So if there’s nothing I should be doing from a substantive knowledge perspective other than making sure I get broad exposure, is there anything else I can be doing to position myself better for an in-house role, or should I just plan on chugging along for a couple more years and expect to be in a pretty good position just by virtue of coming from a name brand law firm and having enough seniority? And I assume the conventional wisdom of 5th year or so being the sweet spot for in-house exits is equally applicable to tax?

Nice to hear about audit managers at larger companies that handle the low-level controversy work. Sounds like something that would be good to avoid if possible in a tax counsel position (though I’m guessing you can’t be too picky given the relatively small size of the market). What would compliance work look like for tax counsel? Is that also more in the vein of support for positions taken on returns?

If you can build relationships with anybody in-house for tax, that's always helpful. 5th year is probably a reasonable timeframe to make the jump, but really anyone from 4th year to counsel is a plausible candidate. Obviously, partners could be candidates, but only a few have pure tax legal roles that would be attractive to a partner from a comp standpoint. Most biglaw partners wouldn't be competitive for head of tax type roles as those tend to require more accounting background than someone who has been ensconced in biglaw for a long time has.

I wouldn't worry too much about lower-level work. Most companies are going to have cheaper people than attorneys do that sort of work. There are non-CPA accounting staff for the pure administrative stuff like filling out W-9s/W8s and the like.

As far as compliance work, it will depend a bit on the role, but mostly you'd just support the reporting of any transactions you were involved with. You might also prepare elections and disclosures (not fun, but requires an understanding of the transaction). You might also work on transfer pricing reports and issues related to CBC reporting. In general, compliance isn't likely to be a significant part of your workload unless you are in a more hybrid accounting/tax legal role.

[Anonymous User]

Piggybacking on this conversation, will an NYU Tax Executive LLM move the needle at all on in-house hiring? Firm is willing to pay for it, and I think I'd somewhat enjoy doing it/it would be helpful, but I don't want to kill myself doing Biglaw Tax and the LLM at the same time if it's not going to do much for me if the going in-house is a potential endgame.