Once you’ve made up your mind that you are not happy at your current firm, this does not necessarily mean you should move. You want to be sure that the source of your unhappiness is not likely to repeat itself at a new firm and that your candidacy will be received favorably in the market generally.
But how do you know?
The following are a few examples of more “questionable” reasons that motivate a move (with the understanding every situation is different and nuanced).
“I’m not having a good year.” The best time to move is when you are at the top of the curve, not the middle or near the bottom. If you are not having a good year, odds are your compensation is still based on previous higher years, and if you were to go into the lateral market, your compensation will be based on your current portable practice . As such, you are setting yourself up for a decrease in compensation (and likely less receptivity), in most situations.
“I do not enjoy what I’m doing.” A variation of this is: “Despite my success, I find it increasingly difficult to be excited about what I am doing. Is it what I am doing or where I am doing it that is the problem?” This can be a yellow flag because you might simply be burned out from the day-to-day practice. It may not be your firm, but the fact that you are tired of billing your time or hustling for business. Or, on the other hand, you may not enjoy the people/environment at your current firm and that is affecting your judgment. Distinguishing between these two is critical but not always easy.
“My firm did not appropriately compensate me this PAST YEAR.” Note, I used the wording “this past year.” If it happened once, there may be a justifiable reason why your compensation did not meet your expectations. If it has happened twice, and you are fairly confident that your reasons for concern are justified, then your contemplating a change will be viewed more favorably. However, what constitutes “appropriate compensation” is not always a straightforward answer. I often talk to partners who are frustrated and think they should be getting paid more, but once we go over what the lateral market would likely pay, they decide that their frustration is not entirely justified. On the other hand, the profit margin between firms can differ significantly and if you can make more money at another firm performing the same level and amount of work, and there’s not a reduction in quality of life, well, who can argue with that?)
Rule of Thumb: There are certainly other questionable reasons to enter the market but they are often more specific to your particular situation and should be assessed on a case-by-case basis. But the more your reason for entering the market relates to you not fully realizing your potential due to factors outside of your control, the better. On the other hand, the more the reason relates to challenges you are facing (that could easily recur at a new firm) the more a yellow — or red — flag will be raised.
