Is there better money than biglaw? Forum

[Anonymous User]

Anon because I have identifying information in my history.

I just started in biglaw. I hate the job, but I want to retire early (ideally 40 years old, 45 more realistically). The money helps with my goals.

I could stay in biglaw. I'm mediocre at it, which means I won't make partner, but I probably won't get pushed out. Even if I do, I could pretty easily lateral into another biglaw position.

The question is, if I'm only concerned with money, is there an easier path for my goals? Obviously, I know there are jobs that pay more than biglaw, but are there any opportunities suitable for biglaw lawyers? I obviously can't become a doctor or something like that, but should I consider something like investment banking? I also considered consulting, but the pay doesn't seem better. Also, I'm probably more likely to get pushed out at a place like McKinsey than staying in biglaw. I know in-house generally has lower pay than biglaw, but has anyone found any opportunities that have actually paid more (or at least comparable)?

I have pretty much no background suitable for anything else, but I'm a tryhard networker/interviewer and am willing to sacrifice my life to get paid (don't mind 80/hour weeks, no familial commitments right now). Any suggestions?

[purplegoldtornado]

If you just started, how do you know your skill level?

[Anonymous User]

am willing to sacrifice my life to get paid

Don't do this...

[Dahl]

Is there something that makes you think you would enjoy banking more than law? Are you in finance now?

If you’re doing FIRE, sticking with biglaw as long as you can seems useful and could probably help you get there faster. I would suggest switching practice areas if you hate the work. But banking won’t be any less stressful than law.

I personally hated working for a firm but I also know government work won’t allow me to retire earlier than 57-60. But I really enjoy my job so that doesn’t sound that bad to me.

[Anonymous User]

OP here:

1. I might not know my exact skill level, but the way I see it: 10% get pushed out (involuntarily) and 10% make partner. I'm pretty sure I'm somewhere in the middle 80%.

2. I might change my mind about sacrificing my life (especially once I start a family), but right now I don't mind. The way I see it, I'm sacrificing my life now so that I have more freedom and can spend time with my future kids and wife down the line (by retiring early).

3. I think I would enjoy the substance of banking more than law, but it would probably end up being about even because of the worse hours. Changing practice groups wouldn't help. I like the people in my practice group and the hours are relatively stable. I just don't really enjoy the "legal" nature of work (real smart decision going to law school huh??). Way too risk-averse and honestly seems pointless to me 99% of the time.

[PT818]

Switch practice areas. Being an M&A lawyer is completely different from being a litigator. Saying "I just don't really enjoy the 'legal' nature of work" makes no sense.

[Dahl]

Yeah there’s no one “legal work” that’s all the same. In my somewhat niche area of finance the legal work overlaps with the bankers work quite a bit, and you have to understand what they do even if you’re not working on models or the deal structure at that level.

Do you want to do quant? Because that’s pretty specific and if you know you love it and find it fulfilling maybe it’s worth a switch. But don’t leave law, or your job, if you aren’t sure you’d really enjoy the work you’re leaving for. Also it would probably be easier to get a job at a bank if you’re working with bankers. But maybe you already are, you didn’t say your current practice area.

[malibustacy]

You have no skills and no passion other than money. You are not even close to being worth the 1st year salary you collect now; who the hell is going to pay you more money?

Should have been born rich - better luck next life.

[bwh8813]

OP here:

1. I might not know my exact skill level, but the way I see it: 10% get pushed out (involuntarily) and 10% make partner. I'm pretty sure I'm somewhere in the middle 80%.

Are you under the impression that 80% of people who start in big law are just hanging around collecting big law salary for 15-20 years (if you're K-JD and looking to ride it out until 40-45)?

[attorney589753]

Agree with the comments that you should consider switching practice areas and maybe also you want to find a firm where people bill 2,000 hours instead of 2,500 hours. All of BigLaw (law?) has a CYA element to it, still, the risk tolerance definitely varies by firm and practice group so maybe you just need to find one that *does* a bit more.

I have to say though, for many (myself included) the first few years are the worst and it gets better. Definitely the aspect of "this is entirely meaningless" goes away a bit when you are spending a lot of time strategizing with clients, negotiating, delegating junior work, brainstorming, or even just drafting something complex (instead of something tedious). This is a total YMMV and there's also more stress/responsibility/demands as you get higher.

I think to get to your actual question, though, provided you are half-decent then floating around biglaw for a while is a fairly safe way to FIRE. There are faster ways (finance/banking? start a company?), but they're almost all riskier compared to how quickly/easily you're getting to $300K in biglaw. Maybe you stumble across a nice in-house opportunity that gives you enough time to do a side gig and helps you get there quicker.

[TigerIsBack]

Going in-house role could work too if you can get a gig at a FAANGM. Since it sounds like you're maximizing on your savings, you can probably afford the cash pay cut you'd take at a FAANGM company, but the total compensation package is often close to, equal, or occasionally higher than biglaw because those companies also pay out major money in stock/RSUs, maybe you get a 401k match, etc.

I'm sure Amazon lawyers all beat their biglaw associate counterparts in total comp this year and it probably wasn't even close based on how well the stock has been doing. I have a friend on a sub-$200k package there that cleared $300k this year because of how well his stock did, and I think most lawyers that are in the midlevel associate range are probably on a $250-$300k package, some with more than 50% of that as stock/RSUs, so it's feasible that some of those folks are pushing $500k this year in total comp.

Plus the hours are better (maybe not by much depending on the company), work probably more interesting, but may be tough to get in until you're like a 3rd year or so, but I'm not positive.

[Anonymous User]

OP here:

I think the confusion might stem from saying I "hate" my job. I don't enjoy the work. But I am fairly compensated, enjoy the people I work with, and don't mind the hours. I'm okay with being in biglaw, just wondering if there is anything *outside* of biglaw worth considering.

@Dahl - Nah, not quant. I don't have any sort of quant skills. I do like numbers more than most lawyers, but definitely not to that level.

@malibustacy - That's literally what I'm asking. I'll try to be reincarnated richer in my next life. I did grow up quite poor in my current life, and that's why money matters to me probably more than it does for most.

@bwh8813 - I'm not saying that 80% of people do that. I was just making the point that I'm good enough not to be pushed out (or at least could lateral to a different law firm) and not good enough to make partner. I recognize that the majority of people quit voluntarily.

@attorney - I might change my mind later, but I like my law firm / practice group so far. Thank you for your perspective though. Might want to stick around if it gets more interesting.

@TigerIsBack - That's helpful. I wouldn't rely on stock appreciation (amazon obviously did really well but I would always rather diversify than bet on a single company's stock), but that's pretty good compensation even assuming normal stock returns. Will definitely have to consider it down the line.

[LawrenceGazebo]

Become a banker.

[PrinterInk]

Become a banker.

Bankers don’t really get paid more than lawyers on average—just at certain career stages. Eg a high earning VP makes a little more than a V5 senior associate, but the average V5 equity partner makes substantially more than an average bulge bracket MD). I am a senior associate at a large firm and make more than my friends in same class year who left to go into investment banking. It’s a slightly less cucked work environment, though.

[Anonymous User]

Dude if you care about money and securing the most of it in this life, stay in big law. It's less risky and if you're as good as you say you are, you'll make non-equity partner or counsel (depending on what your firm calls it) in 6-8 years. Comp will probably top out then around 500k, and if you invest correctly with that kind of income, you'll have no issue becoming financially stable. Make sure you're maxing your IRA and Roth IRA contributions every year. Take advantage of every tax break in the book. Buy fixer uppers as your primary residence and sell every 2 years, get the 250k gain exclusion (500k if you're married). Do that perfectly and your net worth increases by a quarter million every 2 years (obviously this requires market knowledge, lots of construction work, and luck, but you get the point). When you spend your money, think about buying more income with the money in your pocket now. Diversify your income stream. Have a couple rental properties that pay you rent every month and that are also growing in value. Invest into whole-life insurance policies, the investment gains are taxed at a preferential rate. Doing this you will be more than set to retire at 45. It won't make you the richest guy on this forum. Only luck could do that. But hard work and smart fiscal management can bring you a comfortable early retirement.

[Definitely Not North]

Have you considered going solo

[NoLongerALurker]

Have you considered going solo

Oh god not this again

[Sporty1911]

Go in-house and get equity at a start-up that gets bought out for a couple hundred million, easy

[sms18]

For a 1st year associate with basically zero skill-set, there likely is no better option money-wise than sticking with biglaw for several years. Even within biglaw, your after-tax income differs quite a bit depending on your office. Maybe either transfer to an office in Texas or Seattle (eg no state tax) or lateral to a firm in any of those states that also pays NYC market. That seems to be the best bet in terms of short/mid-term horizon.

As to banking, the substantive aspect of being a banking associate is generally not expected to be any more interesting than corporate biglaw. Pay isn't meaningfully better either, as someone else already pointed out (unless you're a trader, which has more upside than traditional M&A/cap markets banker). The impression that people have on bankers earning more than lawyers mainly stems from the fact that bankers can start earning pretty high salary out of college and don't need to go through 3 years of law school. So going into banking after law school defeats the purpose, unless you really want to become a banker for reasons other than just comp.

[Anonymous User]

I know in-house generally has lower pay than biglaw, but has anyone found any opportunities that have actually paid more (or at least comparable)?

I'll provide a data point here. I went in house from biglaw around my 5th year. I was able to negotiate a fairly sizable equity package. The first few years, I made, on average, about 30% less than biglaw.

My company has been doing very well the last few years. My overall comp has been increasing fairly rapidly and will likely be within the range of what I understand junior partners in fairly prestigious biglaw firms make (I realize there are some outliers, and I'm going off word of mouth for ranges, but I won't be that far from those figures) for the next few years.

I relate to say, yes, it is possible to make something approaching comparable money. But at least in my own situation, I think I was very fortunate; my company's trajectory could have been more modest, meaning the disparity would have only increased with time. And it might be that in time that the gap again starts to widen, if my company reverses course. At least for most of the opportunities with the biggest upsides in house (i.e., where you have large options or RSU grants), I think it's hard, if not impossible, to predict with any certainty what your income will be after about year 2.

[Anonymous User]

OP here:

2. I might change my mind about sacrificing my life (especially once I start a family), but right now I don't mind. The way I see it, I'm sacrificing my life now so that I have more freedom and can spend time with my future kids and wife down the line (by retiring early).

Finding a wife and having kids to begin with is harder when your whole life is taken up and you are a boring zombie person because of biglaw.

[VirginiaFan]

BIGGER law.

[nahumya]

Stick around. Biglaw gets more enjoyable the more senior you become, especially if you find partners within your firm who are fun. Alternatively, keep an eye out for GC opportunities with startups and PE funds. Those can ultimately get you better equity cash than your biglaw salary.

[LBJ's Hair]

I just want to make a quick point about valuing public market equity compensation for these in-house roles, because I think some people are viewing share-based compensation the wrong way.

If I were trying to compare my BigLaw compensation to my in-house compensation, I would treat the share-based compensation as worth whatever it's worth the day I get it. The fact that my RSUs might appreciate in value is nice, but it's not much different than if I invest an equivalent cash bonus from my firm in that same stock (or another stock) and it appreciates in value. (Another way of thinking about this is that the RSU's appreciation needs to be discounted by the "market" return of a comparable investment in public market equities.)

I'll give an example to make a point.

Say I'm an Amazon in-house lawyer, and I make $100K + 20 shares of Amazon stock per year. I get that December 31, 2019, and that day my Amazon shares are worth $5,000 each. My all-in compensation is ($100K + (20 x $5,000)) $200K.

Amazon has a great year, so shares double to $10,000 each by year-end. Was my salary "actually" ($100K + (20 x $10,000)) $300K?

I would say no.

Think about it this way. What if Amazon gave me $100K salary + $100K bonus, and I used that bonus to *buy* shares in Amazon instead? I would have the same amount of money at year end - $300K. Would I say that Amazon paid me $300K? No, I was paid $200K and made an independent investment decision that worked out for me. I could have also bought Tesla, or an index fund, or whatever.

If you're looking at this and thinking, "Wait, I'd rather just be paid in cash and decide for myself how to allocate my money" -- well, yes. Yes you would. So would Amazon. That's why they're paying you in stock, not cash.

Two disclaimers here: I'm not factoring in any potential tax differences between RSUs and cash comp. And I'd probably look at true startup equity differently - if you're getting half or a quarter a percentage point in some YCombinator company, that's got a potential seven, eight, or nine-figure return profile. Those sorts of fat-right-tail returns are unique.

But if you're working at FAANG, look at the RSUs as cash comp that's put into a little account for you that you're forced to invest in FAANG.

[hmm360]

Invest into whole-life insurance policies, the investment gains are taxed at a preferential rate.

Total aside but can you elaborate on this? I was under the impression they were high-fee ripoffs