The offer

After graduating from Harvard Law School five years ago, you took an associate position with Cable & Brown, a large Boston firm. You had a brutal first year but finally found a niche in the Intellectual Property group, and you have been relatively happy with your work and your colleagues ever since. But there's no getting around the fact that you work grueling hours, and this is really taking a toll on your family life. Since your first child was born two years ago, you've struggled with the lack of flexibility and with being so far away from extended family who could help out and provide the emotional support you sorely miss. Now that your second child is on the way, you and your spouse agree that it's time for a change. Interestingly enough, while in Palo Alto last week meeting with a client, you mentioned that you were hoping to move back to California. The client jumped at the suggestion. "We'd love to have you," said Al, the general counsel, "We've been looking for someone to join us in Legal." You know the company, Altitude, quite well, and think they've got a terrific management team and business plan. You've been doing their outside licensing work for a couple of years, so you would be well-placed to move in-house and hit the ground running. You and the general counsel talked a bit about the job and you both got pretty excited. "Look, you've got the offer," said Al. "Let's talk over email next week and see if we can finalize a deal." You were thrilled, and it was probably your preoccupation with the prospect that led you to mention it the next day during meetings with a second client in Palo Alto, Boniface Ventures. During a coffee break that afternoon you told Bo, the senior attorney, that you may be moving in-house with an IT company in the area. "Hey, if you're looking to go in-house," said Bo, "you should join us." You were surprised, but intrigued. Boniface is run by one of the best-known and most respected IT innovators in the industry. They're the market leader in their niche, and they are expanding. doing partnership deals all over the globe. You've also been doing quite a bit of their outside work and so have drafted many of their partnership contracts already. "I know you've got this other offer, but we should at least see if we can lure you in here," said Bo, "I'm extending an offer right now, and let's talk next week by email to see if we can make it work."You ew home to Boston on cloud nine. The offers couldn't come at a better time, or in a better place. Your spouse is from Palo Alto and you're from nearby Watsonville. Your parents and your in-laws are overjoyed that they'll have grandkids nearby, and your siblings are already talking about weekend barbeques and trips to the beach. Your spouse has practically started packing. But rst you need to gure out which of these offers to take. You've done some research and talked with former I-lLS classmates in the know, and it seems that the companies are similarly situated in their respective markets and equally strong. You think you'd get good experience, and probably good mentoring, om either Al or Bo, and the people at both places seem easy to work with. The analysts are predicting steady growth for both rms, so they seem like more or less equal risks. Frankly, it will probably come down to the package you're offered. You've asked around about how these deals are usually structured, and what you might expect to be paid. Generally speaking, people seem to take as much as a 3050% cut in pay when they go inhouse at an IT company, but this is offset by stock options and more manageable hours. You currently make $250,000 at Cable at: Brown. Your bonus last year was $4540 00, and you expect that this year it could be as high as $50,000that is, if you stayed and if you continued to work as hard as you have been (you billed 3200 hours last year, and missed part of your son's birthday party}. These gures fall about in the middle of the range for fthyear associates in Boston. A friend of yours who recently went in-house at Akamai told you that you should get stock options somewhere in the neighborhood of 10,000 to 50,000, depending on the type of company. More established, post-[PD companies, will give fewer options, since the risk is lower. Both Altitude and Boniface are post[Pt], which means you're unlikely to get wildly rich, but you're also more likely to work predictable hours and still have a job in a year. You and your spouse have worked hard to pay down student loans from your law school and your spouse's business school degrees. You got lucky buying your house in Cambridge when you started at Cable 3.: Brown after law school: it's more than doubled in value since then So you're well situated to take a cut in income (other than the fact that you'll have two kids in child care neat yearl}. You're also curious to see how you're treated in the process. You've had pretty good relationships with both Al and Bo in the past, although you can't say you know either of them well. In negotiating partnership contracts over the last few years, you've noticed that the way companies treat their potential partners during the negotiation often presages how the partnership relationship unfolds over the neat couple of years. This is a big move for you, and you want to make sure you're moving to a place that treats its folks fairly. l[Cine sticky question is what to do about the fact that Altitude doesn't know you're also talking with Boniface. You need to give some careful thought to how to best handle this- Having two offers gives you leverage, but you don't want to do anything that might hurt your reputation. The IFI legal world is a small one, and the town of Palo Alto even smaller. Prepare for and conduct your negotiations via e-mail with Al and with Bo. The Offer Supplemental Information for Sydney Background information on Stock Options Coincidentally. both Altitude and Boniface are currently trading at $4.-"share. Both companies have traded as high as $T.-"share_. but have taken a hit in the crurent market. Analysts view both Altitude and Boniface as strong players= and are predicting steady long-term growth for each of them. Viv-Then employees are given stock options, they receive the right to buy stock at particular times and at a particular \"strike price.\" The strike price must be equal to the value of the stock on the day the options are issued. Often stock options vest over a period of timethree to five years is common. For example, you might receive 10.000 shares at a buy-in price of $4.-"share-. vesting over four years. This would mean that once a year for four years you would have a window of time dining which you could buy 2,500 shares at $4.-"'share. You would have to come 11p with $10000 witlml each window in order to \"exercise" your options. If you do not exercise your options before their expiration date, you lose them. Stock options are considered desirable because employees expect stock values to rise over time. Three years out the stock might be trading at $8.:"share= yet the employee can still buy it at {l34.--"share= instantly doubling his or her money at favorable capital gains tax rates. Of course= the stock price could drop to $3.-"share, rendering the options worthless since the shares could he purchased on the market for $1 cheaper per share than with the option. Hello Sydney, I hope all is well. I thought I would reach out to see if you were still interested in the Senior Counsel position at Altitude. I know you had interest in moving back home to California and I wasn't sure if you had had a chance to speak to your spouse about taking on the position. I have spoken to the CEO and HR manager about offering you the position. Please let me know your thoughts and requirements if you would still like to take on the position. Have a wonderful rest of your day. I look forward to hearing from you. Sincerely, AI