The Golden Handcuffs
I asked some attorneys I know to weigh in on how they navigated the transition and the very large pay cut. Here is what they said:
Attorney who went from big law to clerkship to DOJ job in Chicago: “I paid off my loans before clerking. It is probably my privilege showing but I am amazed when I hear classmates six years out of law school mention that they’re still paying off their loans. I was fortunate not to have college loans: obviously it’s a different ballgame if you have both. But I don’t know. One of my classmates went to big law and mentioned earlier this year that when he started working he immediately bought a nice car and is still paying it off?? Sheesh. I did not find leaving the large salary difficult, for two reasons. First, I was not a big spender even when at the firm. I tried to live frugally at the firm in the hope of being debt free relatively quickly. Second, it must be said that my clerkship was in my hometown (downstate Illinois), and I elected to live rent-free at my parents’ house. So that was a huge chunk of money that I was automatically “saving” every month. So it basically felt like no difference. I will say that, at the firm, and particularly in my final year at the firm when I was done paying off my loans, I would often spend money without thinking. Like it would be common for me to leave work at 7 and go somewhere to watch the Bulls game: have a meal, have a couple beers, tip well. That sort of thing adds up night after night. Now that I am back in Chicago I am much more conscious about my budget and keep track of every dollar I spend. If I were still at my firm I’m imagine I would not be doing that.” Attorney who went from big law to state government job in a big city: I left my big law job eight years after graduation from law school, at which point my student loans had been repaid in full. To accomplish this, starting with my very first month as a big law associate, I made extra payments on my student loans until they were paid off. In my view, a big law salary is like an NFL salary: because of the nature of the job, it would necessarily be temporary. [Note from Katelynn, NFL players live with their parents to save money too.] I could not predict when illness or change in family circumstances might make big law hours unsustainable. I could not predict when a change in the economy might cause layoffs in my practice area. So, when each big law paycheck came in, I “paid” myself an amount equal to my pre-law school paralegal salary and directed the rest of my paycheck to student loans and savings. I should probably also mention that instead of going to the highest ranked law school I was admitted to, I choose a slightly lower ranked school that gave me a larger scholarship (as a proportion of total tuition bill) in order to reduce my ultimate student loan burden. Despite that my loans were paid off, it was hard to give up my big law salary. My government job pays more than most, but I still took a pay cut well in excess of $100k. I probably would have worked in big law for a couple additional years before leaving, but in my last year at the firm I experienced a series of events that persuaded me that it was time to leave:Beyond my own personal contacts, there are many detailed blog posts and stories about people who paid off their law school debt. See this popular story of an attorney who paid off $180,000 in loans in 8 years. Note that during those eight years, she lived with her parents the entire time and had no rental payment. See also this blog post from someone who paid off $87,000 in student loans in 2 1/2 years. This blog post is worthy for its detailed discussion of how interest comes into play over years of paying off loans.
- I was hit by a SUV when I was crossing the street from the office to a local sandwich shop to get dinner while working late to meet a client deadline. The firm expected me to return to the office and finish the client deliverable and wait until later to go to the hospital to get checked out. I complied.
- A partner told me the timing of a D&C and blood transfusion required as a result of a miscarriage was “inconvenient” for the firm. (I had actually been working in the office while feeling terribly ill in order to meet a client deadline; after meeting that deadline and on my way home from the office that night, I fainted (due to blood loss) at a gas station and was taken by ambulance to the hospital where I ultimately had the D&C).
- After the above events and countless all nighters and cancelled vacations, the firm told me during an annual review that I wasn’t sufficiently committed to the firm.
I was able to pay off my loans at the big firm. I appreciate that. I also appreciate learning that I never want to work at a big firm or chase prestige.
I think 1Ls want to go to big firms because of the high salary and perceived prestige. But for me, the high starting salary was as much a burden as a benefit. Because of the salary, I felt pressure to do perfect work. Yet I was a new lawyer and was bound to make mistakes. The perceived prestige did not do anything for me, but I do think a lot of lawyers take pride in serving large corporations. I also think it’s a lot easier to get a big firm job than many other options. There are on-campus interviews and the firms assume you want to work there. I think the hiring standards are much more idiosyncratic at small firms, and you’re unlikely to get an interview without a connectAttorney who went from big law to in-house role: “I switched from biglaw to a quasi-regulatory non-profit. I’m not sure I understand your premise. The transition was easy and wonderful! Keep in mind that when lots of people leave biglaw they also leave big cities with high costs of living, mitigating the drop in pay. I think it’s a straw man to say that the transition is from biglaw to low-paying public interest, which makes the transition hard. It’s not difficult to transition from high-paying biglaw in a high-cost-of-living city to slightly-less-high paying other legal jobs in better-cost-of-living cities. The real loss isn’t the associate salary–it’s the upside of making insane money as a partner. Nothing offers that unless you’re in-house at a very big company, but the odds of becoming general counsel are probably lower than making partner at a big firm. I also think that the lawyers budgeting aggressively to pay off loans are trying to pay off their loans very early, like in 3-5 years from graduation. Attorney who went from big law in DC to the federal government on the west coast: “Well just don’t get golden handcuffs. I also question this premise. Most people are happier with the extra time they get through the transition. Often people have either acquired children, finished paying off loans, or both, at this transition point, and continuing is untenable and unnecessary. Biglaw is extremely hard. People may like the money, but the work is so overwhelming that the vast majority of people are motivated to leave within the first five years. They go . . . wherever! It’s the people who think they’re going to stay forever that get into a higher social class (and own an expensive home, and have a stay-at-home spouse, and have kids in private schools) that’s harder to leave. Your advice to students *should* be to budget aggressively. That gives you the most flexibility. Second, you can pay down loans and also buy nice clothes. I am one of those who budgeted aggressively–but I also took a month-long trip to Turkey and ate many insanely expensive DC dinners as well. Those are not golden handcuffs. In comparison, mortgages are golden handcuffs. Daycare for twins is golden handcuffs. Third, very few people can afford to work in legal aid jobs in big cities, regardless if they started out in big law, unless they have family money. I can’t work for alternative weekly newspapers anymore either. But that doesn’t mean I didn’t have a realistic escape route from biglaw.”