Choices, Priorities and Money – making a move in-house…
The decision to make a move in-house can be reached at various stages of one’s legal career. For some, this comes very early as the carrot of partnership holds no appeal at all; yet for most it comes during the senior associate years, when partnership is either not desired or simply not going to happen for a variety of reasons. It should be remembered that ability is only 25% of the equation when going for promotion and especially when going for partnership. A guardian angel/sponsor is at least 25% or possibly 50% with the remainder being a combination of timing and luck. Deftness of touch and being fleet of foot like a politician can be very advantageous and is a key skill in corporate life for climbing the career ladder… Emotional intelligence always plays a key part too.
When making a career move money will always play a part, as we all aspire to a certain standard of living and have mortgages etc. I will be upfront and say that partnership will often bring the most financial rewards if that is your key driver. A successful career as partner can set up the next generation as well with trophy assets such as an Alpine Ski Lodge, or a villa in the most exclusive areas of the Mediterranean being well within reach. One can review the pages of Country Life Magazine with intent rather than just a pipe dream… In around 50% of cases, a move in-house will necessitate a cut in base pay. However, in terms of total compensation this is often not the case once bonuses, car allowances, pensions and other benefits are taken into account. Pay is structured in a very different way within all corporations and I suggest that it is always important to look at total compensation before looking at bonus potential. Bonus potential can be a real driver and where it is a large part of compensation, it is very simple – you have to back yourself and have faith in the company’s model and product or service.
In-house lawyer X whom I met recently had a final salary pension (joined in the nick of time some 8 years ago). His annual compensation statement valued his final salary pension at 40% of his 100K base salary, which is the highest I have ever seen. For comparison purposes, 30% is the regular notional figure with anything from 25-35% also utilised on a regular basis. Total compensation is always your total pay figure.
Large holiday entitlements of 30 days are not uncommon in former state-owned utilities and the public sector and have a value that only an individual can put a price on… 60K + a final salary pension + 30 days holiday is probably worth 100K in the private company sector with standard minimal benefits on top. A teacher friend of mine terminated a conversation when I pointed out the value of his pension; whilst bemoaning his pay relative to other professions. Indeed, some friends of my parents who were both teachers retired at 60 on final salary schemes; whilst some of their friends with their own business and a lack of a gold plated pension are still working in their late 60s/early 70s… Life is about choices.
Whilst there may be a hit in salary initially, it is always imperative to take the long term view when moving in-house. Significant salary increments will come with promotions, bonuses and via stock options at the senior level. Long term incentive plans can bring significant rewards over time depending on the overall success of your employer. Stock options tend to be vested over 3-5 years – hence the need to take the longer term view. Even at the junior end, several large FTSE 100 companies offer share match schemes to encourage investment by employees – often worth a few thousand in extra compensation per annum.
The need to work less hours and have a more balanced life are often cited as key motivators for moving in-house. Working through the night or the regular 11pm finishes will hopefully disappear with an in-house move. However, a move in-house brings different demands from internal clients and possibly significant travel in some roles. Although some perceive a move in-house to be a soft option, this is rarely the case. Each sector will bring its own demands; for example the end of each quarter in the IT sector being particularly intense and certainly not for the faint hearted…
When interviewing for an in-house role, I always advise candidates to trust their own convictions about the culture, people and sector that a client operates in. All human beings are different and all of us are better suited to certain cultures more than others. At the end of the day, a move in-house is a critical career move and will define your future. The pain of getting it wrong can be disastrous for all parties concerned.
If you have doubts about a role before accepting it – my advice would be not to take it. Obviously if you were without a job and need the money – it would probably be a case of gritting one’s teeth and getting on with it.
At the end of the day, life is about choices and defining our priorities. For many, money will always talk…
Brian Littleton is head of In-house London & South at Chadwick Nott and has over 12 years legal recruitment/head-hunting experience in the in-house market. Please feel free to contact him on email@example.com or telephone 0203 096 4549.