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10 Things To Know About Employee Benefits And Executive Compensation Law

This practice area offers opportunities to interact directly with clients as a relatively junior associate.

By Gia Norris  
on

pension plan LFEd. note: Welcome to the latest installment of Better Know A Practice Area, a series introducing readers to different practice areas. Each post is written by an editor at Practical Law who previously practiced in that area and currently writes about it. Prior columns have covered capital markets and corporate governance, securities litigation and enforcement, patent litigation, executive compensation, commercial transactions, labor and employment, real estate, startup law, bankruptcy, antitrust, and being an in-house generalist.

Today’s topic: employee benefits and executive compensation law.

  1. What do you do in a typical day?

A typical day for a midlevel employee benefits and executive compensation attorney varies dramatically depending on the firm itself and the focus of the practice group. For example, employee benefits and executive compensation teams at many large law firms focus almost exclusively on supporting the corporate department on mergers and acquisitions and other transactions. However, other law firms may offer different opportunities, depending on their client base.

An associate in a large law firm may represent large single-employer, multi-employer and collectively bargained pension plan clients, including pension, profit-sharing, annuity, 401(k), employee stock ownership and other types of employee benefit plans. Representing these plans involves daily calls and e-mails with clients troubleshooting legal issues, as well as assisting clients with:

  • Advising on plan asset rules under the Employee Retirement Income Security Act of 1974 (ERISA) relating to the investment of retirement plan assets in private equity funds and hedge funds, negotiating side letters, and reviewing limited partnership and other operating agreements.
  • Correcting plan qualification defects through the Department of Labor (DOL) Employee Plans Compliance Resolution Service.
  • Drafting and reviewing participant communications to comply with ERISA and the Internal Revenue Code (Code).
  • Drafting plan documents and summary plan descriptions to comply with ERISA and the Code.
  • Negotiating service provider, investment management and consulting agreements.
  • Advising on participant claims relating to plan investment losses or restrictions on coverage.

In addition to representing employee benefit plan clients, associates may assist partners representing companies and executives in the negotiation and implementation of employment agreements, including provisions dealing with post-employment restrictions.

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  1. Who do you work with?

Because there are many different types of professionals who advise employee benefit plans in some capacity, associates may work directly with plan administrators, human resource professionals, plan actuaries and accountants and, in the context of multi-employer collectively bargained plans, plan trustees and labor union co-counsel.

Typically associates work primarily with partners on larger client matters. However, one unique aspect of this practice area is the opportunity to interact directly with clients as a relatively junior associate. Midlevel associates routinely handle calls as the first line of communication from plan administrators, human resource professionals, actuaries and other entities involved in retirement plan administration, in consultation with the responsible partner. They may also attend trustee meetings for multi-employer, collectively bargained plan clients.

With regard to executive compensation, associates typically work with a partner to negotiate the relevant employment agreements, participating in calls with opposing counsel to finalize the agreement. They may also attend meetings for compensation committees in connection with required executive compensation rules and disclosures. These committees are typically composed of senior executives in public companies.

  1. What does a common career path look like?

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Many employee benefits and executive compensation attorneys must decide at some point how to focus their career within this practice area. For example, some associates exclusively practice executive compensation and focus on transactional matters, others focus on Title I of ERISA, and still others focus on employee benefit plan compliance matters. It is possible at some large firms to create a career path that includes all of these specialties, but it is more common to become an expert in one or two of these categories.

An employee benefits and executive compensation associate can climb the traditional ladder at a law firm, becoming a midlevel and then senior associate with more significant responsibilities and aspiring to become senior counsel or partner. Alternatively, associates may also choose to develop their experience at a large law firm, and use that experience to leverage a career in-house as an employee benefits counsel to a company or pension fund. Others choose less traditional paths and become either attorney editors who write about this area of law or consultants at an employee benefits consulting firm, such as Mercer.

  1. If variety is the spice of life, how spicy is this practice area?

Although this practice area is relatively small, there is an enormous variety in the type of work associates do, depending on the firm’s clients and the individual’s expertise and seniority. An associate may be working on a transaction (or several transactions) while simultaneously handling calls relating to employee benefit plan compliance issues, drafting participant communications or negotiating service provider agreements for retirement plans. Associates who also practice executive compensation may also be negotiating several employment agreements or drafting equity plans.

  1. How much wear and tear?

Employee benefits and executive compensation has the reputation of being a slower-paced, more manageable practice area than litigation or corporate, for example. That does not always hold true, however, particularly for transaction-based practices. If you are talented, qualified and easy to get along with, the pace of work will be demanding regardless of what practice area you choose.

  1. Of the people in this practice group who hate it, what exactly do they hate about it?

Employee benefits and executive compensation is not necessarily considered one of the sexiest, most exciting practice areas. In transactional work, it is rare for an employee benefits issue to drive the transaction (although, in some cases, large underfunded retirement plans or high-profile executive compensation negotiations may become significant issues). In a non-transactional practice, some associates may feel as though the work is tedious because it is a technical area of law with complex regulations that can be difficult to navigate.

  1. Of the people in this group who love it, what exactly do they love about it?

The people working in this practice area are known for being friendly, and the world of practitioners is small and tight-knit. Associates get to know a wide variety of attorneys from different firms, and there are opportunities to get involved with professional organizations and participate in speaking engagements from an early stage in your career. Attorneys in this area also love being able to develop a long-term relationship with their clients from a relatively junior point in their career.

From a substantive perspective, this practice area may be appealing to those who love to analyze complicated tax regulations and how they fit together, or who prefer negotiating contracts and counseling clients rather than heading to the courtroom to litigate.

  1. Are there common avenues out of this practice area?

Yes; it is common for employee benefits and executive compensation associates to go to corporate counsel positions for law firm clients, for example. Typically, however, these positions are specifically for employee benefits or executive compensation counsel. Some attorneys also choose to move to the government sector and work for a related agency, such as the DOL or Internal Revenue Service.

  1. What are some market trends that impact this practice area?

Economic trends affecting the stock market impact work in this area because associates are dealing with either the rules governing the prudent investment of plan assets or an executive’s compensation package. As a transactional attorney, the typical ebb and flow of mergers and acquisitions will affect the number of transactions that associates are working on at any given time.

Political trends also impact this area as it is heavily regulated by administrative agencies. The current environment is a great example in that the Trump administration is working to reverse course on several laws and regulations that were enacted during the Obama administration, such as the Affordable Care Act, the fiduciary investment advice regulation, and the Dodd-Frank Act.

  1. If you had to recommend one candidate from a room crowded with recent bar exam graduates, what specific qualities would he or she have that would ensure success in this practice area?

In one sentence: someone who likes the challenge of coming up with creative solutions to complicated client issues, is familiar with the workings of the Internal Revenue Code and tax regulations, and does not have an ego about being in the spotlight.

Gia Norris is a senior legal editor for Practical Law’s Employee Benefits and Executive Compensation Service and the social media coordinator for Practical Law. She focuses on fiduciary issues under Title I of ERISA. Prior to joining Practical Law, she was a senior associate at Roberts & Holland. She was also an associate at White & Case and Proskauer Rose.

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