Back in January, I declined my offer to work at a prominent law firm that pays first-year associates $160,000 per year. Instead, I decided to co-found a legal technology company called Amicus Labs.
There are 3 primary reasons why choosing a startup over law firm was the right choice (and, frankly, a pretty easy choice) for me:
- Practicing law is safe and probably fairly lucrative. But my team and I expect our venture to prove even more lucrative.
- I can more efficiently and enjoyably spend my time outside of BigLaw.
- Someday I will be old. I want to look back and know that I did really big things.
In this post I will briefly expand a bit on each of these points. If nothing else, hopefully this will be of interest to law students or prospective law students who are interested in entrepreneurship.
1. Expected Futures versus Chosen Futures
A. BigLaw and Predictable Riches
Students at elite law schools tend to be very risk averse. After graduation, almost everybody follows the BigLaw path—i.e., they go work for large law firms that pay really well. As Nassim Taleb would say, this path is expectation rich. The expected variance is pretty low. If all goes perfectly, you will become a partner at a prestigious firm and make one or two million dollars per year. Maybe a select few will even become Senators or judges.
The problem with BigLaw associates counting on such a rosy future is that it probably won’t happen. Not everyone can make partner. Attrition is fierce. People often find it draining, and escape as soon as their law school debt is paid off. Those who do want to stay around for the big money are often forced out regardless. But, financially at least, the worst outcome is still pretty good. Maybe you don’t make partner anywhere and maybe your work sucks. But you’ll be well trained, and as a Yale/Harvard/Stanford-educated lawyer, you’ll have an easy enough time making a good living.
B. Non BigLaw Lawyering – Higher Highs, Lower Lows
The range of possible outcomes is a bit higher for the minority of students that goes into public interest lawyering. In economic terms, the worst outcome (forever making $40,000 while trying to “fight the good fight” while trying to stay on top any of various loan forgiveness programs) can be pretty brutal. Then again, top law students who choose low-paid PI work rarely do so out of necessity. Maybe once we factor in the nonmonetary motivations that are clearly at play, the opportunity cost isn’t as high as it first appears.
At the other extreme, it’s easy to forget that the best-paid lawyers are plaintiff’s lawyers, not BigLaw partners. Americans aren’t fond of lawyers generally. But plaintiff’s lawyers are probably the most disliked of all. They are perceived as making lots of money without creating much value (“Why should a lawyer make millions of dollars because some company spilled some oil?”). People argue on and on about this. But what’s inarguable is that the potential upside for plaintiff’s lawyers—we’re talking $10 million to $40 million per year—is enormous. While you probably won’t become the next Joe Jamail, you can potentially earn much more by suing big corporations than you ever could by defending them.
C. (Legal) Entrepreneurship and Extreme Variance
The variance in potential outcomes for entrepreneurs is even greater. You might become the next Mark Zuckerberg or Kevin Systrom. Or—and more probably—your venture might fail completely. Startup outcomes, as we know, aren’t normally distributed. They follow a power law. Entrepreneurs’ success probably follows a power law too (though probably to a lesser extent, since talented people can and do repeat play).
Generally speaking, legal practice is fairly inefficient and anti-technological. My cofounders and I are not the first to notice; there is a veritable graveyard of failed legal technology companies. When an entire industry is stagnant for so long, there are probably good reasons why—even if, normatively speaking, those reasons are terrible. There is no particular reason to think that succeeding in legal tech is easier than succeeding in any other vertical. Sure, you might be the next LegalZoom. But chances are you’ll end up like PreCYdent. Averaged out, legal tech entrepreneurs—like entrepreneurs generally—are relatively expectation poor.
D. Determinism: Fight or Yield?
Statistically speaking, I made a bad choice. BigLaw, remember, is an expectation rich world, while entrepreneurship is expectation poor. Behind a veil of ignorance, giving up a guaranteed $160,000 plus bonus for startup equity is pure folly.
But people do not operate from behind a veil of ignorance. We operate in the real world, with lots of real world data all around us. My analysis of the data I’ve been able to process leads to two conclusions: first, BigLaw is probably not as expectation rich as is commonly thought. (More on that later.) Second, while most startups do not succeed, I have reason to believe that this one—Amicus Labs—will succeed. Taken together, these factors change my expected value calculus. Simply stated, I expect that working at Amicus will be more lucrative—financially and otherwise—than working in BigLaw.
E. Expected Value
The insight here is that while the realities of the power law humble entrepreneurs generally, this isn’t always the case. It is rational to pursue a venture if you reasonably believe that you can and will end up on the right side of the power law distribution.
The keyword there is “reasonably.” This is tricky stuff. People are biased to be overconfident in their ability to succeed. Just as associates probably overestimate their likelihood of making partner, entrepreneurs probably overestimate their likelihood of success. Nobody starts a startup and expects it to fail—even if they know that most startups suffer that fate.
There is no universal right answer here. All entrepreneurs can’t be right. But they can’t all be wrong, either. As Peter Thiel said in his startup class last spring, whenever you try to do something new, you always have to wonder whether you are crazy and wrong or visionary and right. There’s no escaping that tension. If you find that you are crazy and wrong on something—a hard admission for human rationality to achieve—it’s best to shelve that idea and do something else. But if you are visionary and right, then you should probably eschew the safe route and make that vision happen.
Having weighed all this out as carefully as possible, we believe that we are neither crazy nor wrong. We’ve got a secret. And we believe that we can leverage it to build a really valuable company. Chances of failure aren’t zero, of course. They never go to zero. But we are taking the calculated bet that we can succeed. Amicus Labs is probably the most expectation rich thing that I could be doing.
2. A Life in BigLaw
It seems probable to me that BigLaw is truly expectation rich only in the thinnest, pecuniary sense (and maybe not even then.) It is probably harder to make partner than people initially expect. And it is not clear that making partner will make one happy. If anything, it may often actually cut the other way. Broadly speaking, BigLaw may actually be pretty expectation poor.
I will be lucky if I live to be 100 years old. I turn 26 next week. So unless we see some serious medical breakthroughs this century (it’s fair to be optimistic about that, but let’s not speculate right now) my life is probably more than one-quarter over.
That’s a scary realization. It makes me want to spend the next quarter-century as productively as possible. For me at least, that probably rules out BigLaw.
I still think that being a great trial lawyer could be really fun. I think I could be pretty good at it. The problem is that, to be the kind of litigator that I’d want to be, I would essentially have to spend the better part of a decade not being a trial lawyer at all. That doesn’t sound good at all.
Maybe that sounds trite. I don’t mean to sound entitled, or like I’m averse to hard work or professional development. Consider a different example. Say your goal is to become an NBA basketball player. You might vow to put up 500 shots per day under game-like conditions. That seems like a reasonably good part of a training regimen. It certainly doesn’t seem inefficient or unfair that you’d have to do that. You put in the work, get better, and, when the time comes, you see if you’re good enough to make the league.
Lawyering isn’t so straightforward. Early on, you’re not putting up 3’s in game-like conditions. At best, you went from an elite law school to a good practice in a high-end firm, where you’ll get decent substantive training for several years before you get much serious autonomy. At worst, you didn’t, and you’ll be doing doc review on dozens of banker’s boxes full of files all through Thanksgiving weekend.
Maybe this isn’t a curable problem. Maybe it really does have to take a decade or two to become an excellent BigLaw lawyer. I doubt that the status quo is that efficient. Many people who have been through it readily doubt that too. I suspect those who do not are biased to find it all completely worthwhile.
Regardless, it takes a lot of time. Given available alternatives, that’s a deal-breaker for me. I want to be really good at what I do before 2020. I want to be working, succeeding, and learning from mistakes in real-time. I prefer the meritocratic pace of training for the NBA over a labyrinth of lock-step compensation and training-by-osmosis. Instead of trudging for decades through an inefficient industry, I’d rather work feverishly to make that industry modern and efficient from without.
My wife and I want to have kids (and probably sooner rather than later). Whether startup or BigLaw, there is no near-term scenario in which I will be able to (and, indeed, in which I want to) stop working and spend all of my time with children. Nevertheless, I think the startup route is more conducive to the kind of family life that Cat and I envision.
It’s dangerous to generalize too much here. It is tempting to just assume that startups and tech companies are flexible while BigLaw firms are terrible for families. But that’s not necessarily the case. Insofar as outsiders can opine, it seems like Steve Jobs was a terrible dad. By contrast, plenty of BigLaw partners leave work at 3 or 4pm to coach their kids’ sports teams. Some law firms diligently avoid events after 7pm. Startups, by contrast, often run all-night hackathons that pose obvious difficulties for new parents. Clearly, anecdotes both ways abound. Wachtell or Cravath in New York City are going to be much more brutal than most any startup. But many law firms are taking work-life balance increasingly seriously and are actually pretty accommodating.
Still, the fact that law firms stress their “work-life balance” so much is a red flag to me. True balance is probably likelier in environments that don’t obsess about it. BigLaw pays so well because clients pay exorbitant fees. They pay those high fees for a reason. When you bill in 6 minute increments and you represent a large international bank that is “always on,” there is a sense in which your time is never really your own. That might not bother some people; they can handle it and still be awesome parents. But I suspect it would bother me.
Startups, of course, can be brutal too. People work hard. They work a lot. Having kids and working at a startup can’t be easy, or even ideal. But startups seem to see less need to hard dichotomize between “work” and “life.” There may be more flexibility to craft effective, personal solutions when problems arise. And in startups, you tend to really like what you are doing. That makes a huge difference. I don’t anticipate working less or less hard at Amicus than I would have at a law firm. But I do anticipate less overall tension between family and the construct that is “work.” And that means more opportunity to be the parent I want to be.
3. Looking Back on Big Things
This last point is pretty simple. We all get one shot in life. It seems to me that I should use my shot to do the coolest, most exciting work that I can find. I want to look back when I am old and be satisfied with what I did. I need to know that I took big swings at hard problems. It was not at all clear to me that I would likely get that kind of satisfaction after a career in BigLaw.
This isn’t a criticism of the legal profession generally. Most of the time, lawyers do important and valuable work. Practicing law is an honorable profession. Indeed, I think it’s probably one of the more interesting professions there is.
I simply recognize that, personally, I am probably not a great fit for BigLaw. This conclusion is based on facts, but it’s ultimately subjective. It does not mean that BigLaw is wrong for everybody. Some people love it. That’s great. But many people do it and don’t love it. Many affirmatively regret it. Everybody knows this going in. Lots of people ignore it and focus on the salary. I’ve tried to do just the opposite. And my conclusion is simply that I’d rather do something else—something related, but also something quite different.
There is no shortage of capable lawyers out there. Clients are in good hands. But, technologically speaking, lawyers aren’t. I think someone should change that. Current offerings are so limited in what they do that very few people even have a sense of what is even possible. We at Amicus Labs think we’re up to the challenge. And I couldn’t be more excited to take it on.