5 reasons why you should settle for less when moving in-house
In 2016, elite US law firm Cravath, Swaine & Moore caused a ripple effect across the industry when it bumped junior associate salaries up 12.5 per cent to $180,000 (£134,500).
Earlier this month, it was Milbank, Tweed, Hadley & McCloy that set the new benchmark for junior associates at $190,000. Nevertheless, Cravath went a step further. Not only did the firm meet Milbank’s junior pay rise, but it also bumped up salaries $5,000 and $10,000 for mid-level and senior associates, respectively.
The Cravath Effect
The practice of big US law firms competing in heated salary wars for top talent is known as the ‘Cravath Effect’, and it’s having a huge impact on pay expectations, especially among younger candidates looking to move in-house.
As a millennial myself, I understand. You want everything: the big salary, the work-life balance, a supportive company culture and the opportunity to travel the world and contribute to exciting and personally fulfilling projects. However, are these reasonable expectations at the beginning of your career?
Cravath is leading the market on associate salaries again, matching Milbank et al for junior associates, but going $5,000 & $10,000 beyond for midlevel and senior associates, respectively. And like Simpson Thacher, @Cravath is also adding a mid-year bonus https://t.co/UX11IyuuiE
— The American Lawyer (@AmericanLawyer) June 11, 2018
Something has to give, and this usually means a salary cut if you want to transition in-house. But here are five reasons why you shouldn’t see settling for less pay as a step back.
1. Better work-life balance
Working for a major US or Magic Circle law firm comes with certain commitments. You may be expected to work weekends or until the early hours of the morning (probably both), with cancelled holidays a common occurrence for under-the-cosh lawyers. This can be an incredible burden, particularly for those with families with some professionals risk burnout.
In-house roles at big banks and other organisations offer far more flexibility. Professionals can often drop off and collect kids from school, work from home regularly and benefit from a nine-to-five routine. Businesses recognise that the best in-house lawyers are hard to find, so they want to keep their employees happy to prevent them moving elsewhere.
Our research shows 23 per cent of in-house lawyers cited work life balance as the factor they’d most like to change about their jobs last year, up from 14 per cent in 2016.
2. More negotiating power
Organisations may not be able to match private practice remuneration, but you should be able to negotiate other perks if you’re especially sought-after for an in-house position. For example, I recently placed a candidate with an investment bank that was willing to accommodate a four-day working week for childcare reasons as she had a highly sought-after skill set.
These offers are practically unheard of in most major law firms, yet even the biggest brands are willing to be flexible if they find the right candidate.
3. A different culture
Not everyone is suited to the private practice culture. Heavy workloads, the need to regularly win business and the expectation to maximise your billable hours can quickly overwhelm even the most ambitious candidates.
Some law firms still have partners perform a walk of the floor in the evenings to ensure professionals are at their desks working. The unspoken rule is that even if you haven’t got anything to do, you should still be there. For many lawyers – especially the more junior associates – this type of workplace culture simply isn’t sustainable over the long term, which is why a less rigid in-house environment can be so appealing.
4. You can diversify your skills
The commercial aspect of being an in-house lawyer is a major draw for many candidates. You can work on projects from start to finish and build a broad skillset across different parts of the business, whereas private practice lawyers can end up siloed into a single expertise for the duration of their career.
Furthermore, you may have access to more relocation opportunities, with many banks offering internal or international secondments. Having a big name on your CV can also open up doors for you in the future, whether that’s a move back to private practice or further up the in-house career ladder.
5. You might not have a choice
Taking a salary cut will very likely be your only option if you want the benefits associated with in-house legal roles. Most organisations offer remuneration roughly within the same pay brackets, and few can compete with private practice salaries.
Some US investment banks provide more lucrative pay, but chances are you’ll be expected to work similar hours to the major law firms anyway. The commercial benefits will still be there, but you could be missing out on many of the other advantages of moving in-house, so you’ll need to carefully consider your priorities.
The bottom line
Taking the decision to make your first move in-house is not easy, especially if you’ve become comfortable with an elite law firm salary. However, I would advise that you weigh up all the other perks of an in-house career, such as a better work-life balance, a more relaxed corporate culture and the ability to diversity your skillset before you simply reject an offer on the basis of salary alone.
Working with a specialist recruitment firm can help you find the ideal opportunity to best fit your career aspirations and progression, so please contact me on 0207 936 2601 or via email at email@example.com to discuss your goals.
Alternatively, I’d love to hear your comments and opinions below. What are your expectations when moving in-house? How negotiable are you on salary? If you’re an employer, what are you willing to offer for the best candidates?
Image credits: BrianAJackson and jacoblund via iStock