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.