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Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 9:13 am
by Anonymous User
Thanks so much in advance for any advice or insight!
Current Position:
4th Year Corp/Real Estate
AmLaw 50 - Satellite Office
Salary: $185k
Bonus: $25k upon meeting hours threshold, which I will not meet this year.
New Position:
AGC Real Estate
Pre-revenue and pre-IPO Auto/Tech Company
Salary: $155k
Bonus: None as of now
Equity: One time issuance of $60k in equity based on FMV vesting over 4 years
Edit to Add: I graduated from a law school ranked between 75 and 90.
I live in a relatively LCOL area and the commute for both opportunities would be pretty similar post-Covid. Prior to my current job, I worked at a small law firm that paid significantly less than either offer. I accepted the offer for my current job in March and started at the beginning of April, so the job has been completely in the pandemic age. My hours have fluctuated significantly so far and there is no way that I will hit the hours requirement this year. Everyone has told me not to worry about hours right now, but that's obviously easier said than done.
The new job seems like an exciting opportunity with a company that is growing massively with several institutional backers. I was told that I should expect to work 45-50 hours per week at the new job, so it will not merely be a pure 9-5 job. It's just hard to stomach such a drastic pay cut so soon after reaching BigLaw with a BigLaw salary. Anyone have advice for me or food for thought? Let me know if you have any other questions. Thanks!
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 10:58 am
by 1styearlateral
If your new prospective employer is one of those new hot auto companies that starts with an L or an R, the equity alone might more than make up for the pay cut over time.
Don't forget to value the in-house experience you will get that you can't at a law firm. A jump to in-house (or from one company to another) shouldn't be mostly made based on compensation alone, unlike the decision to move from one firm to another.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 11:35 am
by Anonymous User
1styearlateral wrote: ↑Fri Oct 23, 2020 10:58 am
If your new prospective employer is one of those new hot auto companies that starts with an L or an R, the equity alone might more than make up for the pay cut over time.
Don't forget to value the in-house experience you will get that you can't at a law firm. A jump to in-house (or from one company to another) shouldn't be mostly made based on compensation alone, unlike the decision to move from one firm to another.
OP here. Thanks for the thoughts. The equity could make up the difference or it could become worthless, definitely could be a risk. It's just such a difficult pay cut to stomach, especially so soon after getting a substantial raise. The potential feeling of regret seems to be working in full force both directions!
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 12:06 pm
by sparty99
Anonymous User wrote: ↑Fri Oct 23, 2020 11:35 am
1styearlateral wrote: ↑Fri Oct 23, 2020 10:58 am
If your new prospective employer is one of those new hot auto companies that starts with an L or an R, the equity alone might more than make up for the pay cut over time.
Don't forget to value the in-house experience you will get that you can't at a law firm. A jump to in-house (or from one company to another) shouldn't be mostly made based on compensation alone, unlike the decision to move from one firm to another.
OP here. Thanks for the thoughts. The equity could make up the difference or it could become worthless, definitely could be a risk. It's just such a difficult pay cut to stomach, especially so soon after getting a substantial raise. The potential feeling of regret seems to be working in full force both directions!
Why are you even looking 6 months after starting?
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 12:11 pm
by Definitely Not North
sparty99 wrote: ↑Fri Oct 23, 2020 12:06 pm
Why are you even looking 6 months after starting?
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 12:16 pm
by Anonymous User
sparty99 wrote: ↑Fri Oct 23, 2020 12:06 pm
Anonymous User wrote: ↑Fri Oct 23, 2020 11:35 am
1styearlateral wrote: ↑Fri Oct 23, 2020 10:58 am
If your new prospective employer is one of those new hot auto companies that starts with an L or an R, the equity alone might more than make up for the pay cut over time.
Don't forget to value the in-house experience you will get that you can't at a law firm. A jump to in-house (or from one company to another) shouldn't be mostly made based on compensation alone, unlike the decision to move from one firm to another.
OP here. Thanks for the thoughts. The equity could make up the difference or it could become worthless, definitely could be a risk. It's just such a difficult pay cut to stomach, especially so soon after getting a substantial raise. The potential feeling of regret seems to be working in full force both directions!
Why are you even looking 6 months after starting?
They recruited me. Because it seemed like a good opportunity, I figured it couldn't hurt to go through the process.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 12:43 pm
by 2013
I would take it. 4th year making 185k at an AmLaw 50 firm sounds atrocious unless you’re in like Kansas or something. You probably have a 2000 threshold for a $25k bonus.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 12:45 pm
by Anonymous User
This is an easy one - don't take it. I made the jump in-house around the same time as you from biglaw because of the opportunity (and wasn't much of a pay cut). I have moved back to a firm, and the main reason was compensation disparity (and my base was mid 200s). If you are already concerned about regretting it based on the comp, you WILL regret it based on the comp. If you are making the jump you need to know that you won't make as much and the raises will be smaller than at a firm. Also, equity is great over the long term, but it won't feel as satisfying in the short term. That comp is pretty low, especially with no bonus, I have never heard of no bonus.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 1:05 pm
by Anonymous User
I'd take a hard look at the in-house job. It's a slight pay cut, but it's still a ton of money assuming you live in a mid-size city like Milwaukee, Baltimore, etc. Even in Chicago or Atlanta that's plenty of coin. Once I'm making that kind of money, I'm far more concerned with quality of life, if my job is fulfilling, where I see that job taking my career, etc.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 6:39 pm
by Iowahawk
2013 wrote: ↑Fri Oct 23, 2020 12:43 pm
I would take it. 4th year making 185k at an AmLaw 50 firm sounds atrocious unless you’re in like Kansas or something. You probably have a 2000 threshold for a $25k bonus.
OP is in a low-COL satellite, 185 is quite possibly the top of the market
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 6:45 pm
by Anonymous User
Iowahawk wrote: ↑Fri Oct 23, 2020 6:39 pm
2013 wrote: ↑Fri Oct 23, 2020 12:43 pm
I would take it. 4th year making 185k at an AmLaw 50 firm sounds atrocious unless you’re in like Kansas or something. You probably have a 2000 threshold for a $25k bonus.
OP is in a low-COL satellite, 185 is quite possibly the top of the market
Yup, 185k is basically the top and there aren't many other firms that pay it.
Re: Would you take this in-house position for a pay cut?
Posted: Fri Oct 23, 2020 10:54 pm
by TigerIsBack
Anonymous User wrote: ↑Fri Oct 23, 2020 9:13 am
It's just hard to stomach such a drastic pay cut so soon after reaching BigLaw with a BigLaw salary. Anyone have advice for me or food for thought? Let me know if you have any other questions. Thanks!
Maybe I'm missing something, but $185k salary plus $25k bonus for a 4th year doesn't seem like you're in biglaw/biglaw comp. Not to say that biglaw is the end all be all, because the job definitely can suck a lot, but taking a $30k pay cut to go in house doesn't seem that big. 4th years in biglaw regularly take a haircut from $320k packages ($255k salary + $65k+ bonus) to go in house for like $170k salary and $20-50k bonus.
So, this seems like a pretty decent landing spot, especially if you're in a lowish COL area where $155k goes a long way. Relative to biglaw standards, 50 hours per week is very manageable, and more importantly if it's a consistent 50 hours (instead of 20 some weeks and 80 others) that's great.
Caveat to all of this is that if you're not getting burned out since you're not meeting your hours at your current firm, and it's not because of covid or whatever but just because you're in a more low key office in a more reasonable city or something like that, then I'd definitely stay at the firm and take the extra money if you feel like you have decent job security and the hours aren't horrible.
Re: Would you take this in-house position for a pay cut?
Posted: Sun Oct 25, 2020 10:17 pm
by Anonymous User
OP here. Would really appreciate any other advice! The moment of truth is coming, please help.
Re: Would you take this in-house position for a pay cut?
Posted: Sun Oct 25, 2020 10:41 pm
by Definitely Not North
Pre-IPO? Could you try to negotiate for more equity?
Re: Would you take this in-house position for a pay cut?
Posted: Sun Oct 25, 2020 10:50 pm
by Anonymous User
Definitely Not North wrote: ↑Sun Oct 25, 2020 10:41 pm
Pre-IPO? Could you try to negotiate for more equity?
I tried. They know what I’m making and they said that they gave me their best and only offer.
Re: Would you take this in-house position for a pay cut?
Posted: Mon Oct 26, 2020 10:05 am
by 1styearlateral
For what it’s worth, bonuses are not always guaranteed in a startup environment. I didn’t receive a year-end bonus last year, even though I was certainly entitled to one given the great success my department had. The Boards of most startups are heavily scrutinizing balance sheets and runway length these days given the pandemic, so discretionary expenses are limited.
Again, I would suggest considering that the job in house may be more satisfying given that you will have the opportunity to help build something successful from the ground up, be a leader, and learn more about business and other areas of law that you otherwise wouldn’t at your firm’s practice group. That to me is the most value-add prop of taking the in house job, whereas at the firm you are working for 100 of someone else’s clients and your work is less impactful.
Re: Would you take this in-house position for a pay cut?
Posted: Mon Oct 26, 2020 12:11 pm
by Wubbles
People balking at $185k+25k for a 4th year being biglaw salary clearly do not look at LCOL markets outside of Texas and Charlotte. That is actually substantially more than a 4th year would make in my former market and still slightly more than my current market
Re: Would you take this in-house position for a pay cut?
Posted: Mon Oct 26, 2020 12:31 pm
by Anonymous User
Wubbles wrote: ↑Mon Oct 26, 2020 12:11 pm
People balking at $185k+25k for a 4th year being biglaw salary clearly do not look at LCOL markets outside of Texas and Charlotte. That is actually substantially more than a 4th year would make in my former market and still slightly more than my current market
This is definitely true for me. And likely $30kish above the next tier of law firms in my market.
I think I am leaning toward turning down the offer to save up more money and to further hone my legal skills. The more I think about it, the more my gut is telling me that it may be the right opportunity at the wrong time.
Re: Would you take this in-house position for a pay cut?
Posted: Mon Oct 26, 2020 10:57 pm
by run26.2
If you're thinking about saying no, at least try to renegotiate. I'd ask them to double the equity offer (or maybe even higher). That equity has to make up for your salary differential for several years. Their offer seems low to me, but it's hard to know exactly, and the value of the equity can fluctuate greatly.
Re: Would you take this in-house position for a pay cut?
Posted: Mon Oct 26, 2020 11:26 pm
by Anonymous User
Take into account that the 60K is about market for a midlevel attorney going in-house at a tech company. That's equity in today's value, probably with a 409A value of a few dollars a share. In theory, it should grow, maybe even double or triple in value during your time there as the company does additional rounds. Sure, it could also be worth nothing...them's the breaks with startups.
I got about 60K in 2018, vesting over four years. I stayed for 14 mos. My company is now going public at a 3.5BN valuation and my share is worth about 500K in pre-IPO cash-out value as part of a SPAC exchange. Don't discount that you could make way, way more in-house. It's possible.
The real question is where you think you'll grow more, where you want to be in a few years. Do you want to gun for partner? Do you want to work weekends or not? Do you want to go in house and be a lifer as an in-house atty? This is what you should be asking yourself.
If you wanna get Rich with a capital R, you gotta take Risks.