A: It depends on the situation.
Sometimes an offer from a law firm will come with the condition that you go back a class year. While this is not appropriate in every case, there are instances in which a class year reduction is appropriate and acceptable. In these cases, you should not feel insulted and, if the whole package is attractive and will advance your professional and personal goals, you should seriously consider it.
One legitimate reason for a firm to ask you to take a class year cut is if you are switching practice areas. For example, let’s say you are a third-year associate who is trying to change practice areas from finance to corporate. You have been doing secured loan agreements for the past three years, but now you want to focus on capital markets transactions. You can convince a firm to let you make this practice area switch (which is difficult to do), but the caveat is that you need to come in as a second-year associate.
The firm wants you to do this for your benefit and the benefit of the firm. The firm is not trying to “nickel and dime” you. Instead, the firm likely wants to make sure you will succeed and that it will be able to make a profit off your work. While you may have many transferable deal skills, and you may have been exposed to capital markets work, you will not have the same skillset and experience as a third-year associate who has only done public offerings and other capital markets transactions. The firm will have to spend time training you and getting you up to speed in capital markets work, and if they bill you out like other third-years, the firm might need to write off some of that time. Putting you back a year helps give the firm confidence that it will not lose money on its gamble to bring you in, even though you are switching practice areas.
Additionally, the class year reduction can benefit you as well, because you want to embark on this new opportunity with the confidence that you can meet and exceed the firm’s expectations. No matter how smart or capable you are, and even if you are a speedy study, you will not be able to do the work of a third year in capital markets right out of the gate. You do not want to get yourself in a situation where you are not able to meet the required work product expectations of a third-year associate, which can lead to disappointment as well as other consequences related to compensation, job security, and self-esteem.
Moreover, given the differences in salaries paid by various firms—including differences within markets—a class year reduction may not necessarily result in a significant decrease in salary. I have worked with candidates who ended up making more money, or about the same amount of money) in this kind of switch, even though they went back in class year.
In addition to switching practice areas, another situation in which a class year reduction might be legitimate is if that person is a senior attorney applying for a mid-level job. The top attorney might have good reasons for applying for such a position—perhaps it is with a better firm, or maybe the senior attorney really needs a job—but at the same time, the senior attorney needs to fit him or herself within the needs of that new firm. If the firm is only looking for a three- to five-year associate, and only willing to pay someone at that level, then the seventh year associate might need to come in as a fifth year in this case. It just depends on the situation.
In the end, making a lateral job move is full of different considerations and factors that you must evaluate together. Should you make a move? When is the right time? Should you accept the offer presented to you? Everything matters and should go into the calculus—whether the work and firm are what you are looking for, what the possibilities are for advancement, what the salary is and whether that salary is enough to meet your needs (even if it involves a reduction from what you are currently making), and other factors. Whether a class year cut is appropriate is just one more factor to consider, bearing in mind the reasons for it and how it might even work to your overall long-term advantage as well as that of the firm.
