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Careers Question: Does Size Matter? … Taking The Job That Pays You Most

We’ve all asked ourselves the question, “Does [paycheck] size matter” when we think about how much to consider salary, or even the number of people, when choosing our future employers. In most cases, the question probably seems like a no-brainer. More is better. After all, the bigger our paycheck, the better standard of living we have. And for those of us who are more philanthropic, the more we can give back to our communities. This idea is reinforced consistently at business and law schools, where today classrooms are infected with people that consistently choose higher paying jobs over lower paying ones and where campuses are plagued by well-paying employers who lure students away from public interest jobs and from firms who can’t compete.

This topic has long caused trouble for people during the recruiting process. On one hand a candidate has to consider their earning potential – their base salary, bonus potential, and ability to receive increases the following year. On the other hand, though, they also need to consider things like career trajectory, exit opportunities, and not only immediate compensation but also longer term earning potential. And in a recent question from one of my readers – a 1L at a smaller law school looking into law firms for OCI – I was asked what I thought about taking differences in pay into account when choosing law firms. This reader was specifically thinking about the gray area that exists between firms of similar prestige but that had both a different culture and in pay. See below for the question, and below that for my response.

Thanks for reading, everyone!

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QUESTION FROM MY READER
Dear Jeremy,

First off, you have an incredible blog! I really enjoy reading and think you give lots of quality advice. Thanks for sharing all your information and time.

I am writing to see what your opinion is in regards to choosing a law firm.  While I don’t want to base any decision solely on annual pay. It has come to my attention that the firm I am most interested in and which I think I am a good fit for pays a less than market in my region, by nearly $20k in annual salary and also a bit lower in bonus. As I look to go into OCI this fall, it has started to settle in a bit more and begun to create a bit of tension. I really like this firm and think it might be the better fit for me career wise. But I also don’t want to settle by working at a place that may not pay me up to my potential.

Generally speaking, I pretty much understand the tradeoff of choosing either way, but was curious to hear what you think about the situation.

Thanks in advance,

(Name)

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MY RESPONSE TO THE READER
Dear (Name),

Thanks for your question and many thanks for reading my blog and writing in with your thoughts. I think you hit the nail on the head with the trade-off, but I’ll try to structure a few thoughts, and perhaps give you the path I might go down if I had a similar choice.

You’re correct that some firms do currently start first year associates lower than other firms. For example in the Chicago market, there’s a batch of firms that start associates at 160k and another group that starts associates at 145k, which is about 10% lower.  But in my view, numbers do not always tell the full story and may not be reflective of how things will look a couple of years from now. That’s because a number of firms reduced salaries in 2008 when the economy faltered. And while some of them have responded to the improving economy by scaling salaries back up to 160k, others haven’t done that yet, suggesting that not all the firms are paying their true future wages as of today. That’s not only a result of uncertainty about the future prospects and stability of law firms but for others it’s also a result of timing, since most firms only change salaries at the end of their fiscal year. For many firms the end of the fiscal year is during the summer.

But even if they didn’t adjust salaries up to 160k, I’d be careful not to let that fact would play too big a factor in my decision. In my experience, most students [unlike business students] don’t do enough research about the real nitty-gritty details of the different law firms, most of which can’t be captured by doing a few searches on Google or by reading a few articles on vault or Chambers. Because if they did do the due diligence, they’d probably realize that after a few firms are very different in terms of salary adjustments, culture, ability to make partner, flexibility, practice areas you may be interested in, and a host of other things. After all, conventional wisdom suggests that you’ll perform better where you’re happy and a better fit, right?

For example, I’ll start with salary adjustments. The first year base salary for most new associates tends to be fairly insignificant when you look at the longer term picture of senior associate or partner level compensation opportunities. And just like executives in Fortunate 500 corporations make more than 50% of their comp in equity, senior lawyers in firms make a good portion of their money based on business development and on other firm metrics. This is especially important at specific firms, like my firm Vedder Price, where the senior attorneys are rewarded higher than market for their business development efforts. At some firms that’s true only at the partner level and at other firms it’s true at the associate level – that’s where the research comes in. And even at the junior associate level there could be a real difference in salary potential, depending on if the firm you’re looking at gives a bonus in the upcoming year. A lot of the big firms haven’t given bonuses in the past two years, where some of the firms that pay 145k have, which had the effect of equalizing that initial difference.

But even if salary potential were not an issue, my view is that newly minted attorneys should not only consider the compensation opportunity but also their longer term career opportunities. I’ve personally always lived by the motto “Learn in your 20s and earn in your 30s.” That means choosing a firm that will best position you to not only make money but also to learn as much as possible and set you on to the path to attain your desired career and have the largest impact. For each person this firm and path will be different. For some it may be at a big firm, but for others it may be the smaller firm that pays less.

And finally, as you already noted, it’s important to think about all the nuances of a firm that may be important to you. After all, it’s often those nuances that drive lawyer after lawyer out of corporate law while others continue practicing for decades. This means look at things like size (of firm not paycheck), culture,  practice areas, and perhaps most importantly people you’ve met and liked. And not only do this at your target firms but do it at other firms too, so you can really size them up and actually understand the real differences. This last part is hard, but it’s also particularly important because it’s likely you’ll be working with these people once you get to the office.

So in the end, I might suggest that you not rely too heavily on the first year salary number. Instead consider it in context, context of the people, environment, longer term salary potential, and most importantly, your longer term career trajectory. And once you do your due diligence on the industry and firms, I suspect that you’ll have a better sense of what makes the most sense for you. On the other hand, though, I do not know your personal situation. And it’s always possible that a little extra cash may mean more to you than someone else, for more personal reasons. In those cases, it might make sense if the pay played a larger factor. But otherwise, I’d say keep the big picture in mind and make the best choice for the long term. For me that meant coming to Vedder Price this summer, where although the firm doesn’t pay the highest associate rate to among the firms in Chicago, the firm is very highly aligned with my past experience and future interests, not only in regards to law but also in terms of cultural fit and my policy interests.

Best of luck in the recruiting process! And please keep reading.

Tags: Chicago, law firms, Law School, Recruiting, Summer Internship

Careers Question: How Important Is My Upcoming Phone Screen?

Anyone who runs recruiting probably thinks about the following question all the time. How can we distinguish the firm’s future stars from those who simply have good resumes?  Well that’s a good question. What many applicants don’t know is that employers often get hundreds, sometimes thousands of resumes. That’s especially true now, where the economy is slumping and where a record number of qualified applicants (and overall applicants) are out of work.  So today, recruiters not only have the task of sorting through resumes and screening candidates, but they also have the nuanced task of of interviewing more people and looking more closely at all parts of the interview process.  And in a recent question on GottaMentor I responded to a question about just that.

“Is my phone screen more casual than a typical interview” I was asked on the website. Conventional wisdom suggests that phone screens are more of an initial hurdle before the real deal in-person meetings. The meetings where you schmooze with with HR, try to prove fit with the team, and convince the line manager that you’re the future leader the firm’s been looking for. Years ago, before the internet skyrocketed the number of applications for open positions and before the economic downturn put more people out of work, this idea probably had a bit more validity. But those days are long gone.

Today, open positions not only get hundreds and even thousands of applicants, they also get a very large number of really qualified ones. And as such, all the parts of an interview are becoming more important. And so my belief is that the phone screen is no longer a “screen”. It’s a distinct and important part of the interview process, which means that you should prepare with the same level of seriousness that you would for an in-person interview.  You should practice the same questions, evince the same confidence and politeness, demonstrate that you’re both a leader and a team player, and be sure you have the same level of preparedness and relaxation. Here are a few reasons why:

1. Phone Interviews May Give You More Time. For one, you never know an interviewer’s schedule. And unless the recruiter is scheduled back to back all day, then there may not be a hard cut off in terms of time like there might be in person, where you are in an unfamiliar environment and where the interviewer will have likely scheduled your interview around their other important meetings. But on the phone, you can often take more of a lead, ask a few extra questions, and as a result, really collect and pass along good information. As such, the more prepared you are, the better conversation you might be able to have.

2. Interviews Are Often Holistic. Second, I think many candidates tend to over-compartmentalize the interview process. While on one hand an interview might be intended to be more of a screen to the next round, and may have little bearing on how things progress afterward, on the other hand it could instead lay the groundwork going forward. And if the firm has discussions on the what the screener thought about you the conversation, it could have serious impact on how people perceive you during the next round.I think this is especially true if you do really well, because then the recruiter will share all your information with those you’ll meet next. It’s also especially true at companies like Goldman Sachs and Google, where the firms keep intricate records of the people they interview, even if that interview is done by phone.

3. Good Leaders Are Always On. Third, my general belief is that you’re always representing yourself and your organizations during every interaction. That’s especially true during interviews where the person across from you, or on the other line, has the task of assessing you as a candidate. It’s also especially true today, where information travels at the speed of light speed and so the chances that what you say will be common knowledge at the firm are higher, not to mention where the chances of running to someone again at a career-related event or during another interview down the line are high. And so you should try to think longer term about the interviews you go through, especially if you intend to stay in the same industry.

Having conducted a large number of interviews  and gone on a pretty large number of interviews myself, I speak from experience with all three.  For many it may sound unreasonable to put so many hours into prepping for a phone talk, especially older candidates who are not used to putting in so much time just to use the phone. But from experience I would suggest that it’s not. After all, interviews, whether they seem difficult or not, demand a great deal of skill and agility. And that’s especially true if the interviewer is less experienced because in those cases you’ll want to be sure you convey all of the right information. As such, I recommend that you give the same time and effort that you would an in-person meeting so you can present yourself in the best light possible. Because in the end, you never know how things will play out.

Good luck!

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** PS As I’ve mentioned in a few previous posts (post on Gottamentor and post on resumes), you might considering taking a look at GottaMentor.com when you get the chance. For now, though, here’s a sneak peak at another one of my responses from the site.

Tags: Careers, Recruiting