Myths of In-House Practice

Myths of In-House Practice

Is the grass really greener on the other side, or is that just a myth? A significant number of law firm attorneys tell us that they would like to make the move to in-house practice. They cite such incentives as reduced hours, no pressure to develop business, more stability, and the possibility to move from law to the business side in the future. The question is: how accurate are these perceptions of life inside a corporation's law department?

Fewer hours - Just as with law firms, in-house law departments are very concerned with increasing productivity and efficiency while bringing down costs. Spending for outside counsel is usually the largest expenditure of any corporate law department. One way to reduce that cost is to bring as much of the legal work inside as possible. Yet, while many corporations wish to expand their legal staffs, executives are concerned about "head count", and longer hours are the result. Even though some in-house lawyers still work fewer hours than their law firm counterparts, the trend is towards increasingly long hours. And, bear in mind that the trade-off for somewhat reduced hours usually is significantly less pay.

No pressure to develop business - It is true that in-house attorneys are not expected to bring in clients; the sole client is the corporation. However, the legal function of a corporation is not a profit center and, quite often, is viewed with resentment as an impediment to accomplishing business goals. Additionally, the law department may be spread out through various divisions or geographical locations, possibly making it more difficult to effectively service that client. Another major downside is that an in-house attorney's fate is tied to the whims and fortunes of just one client.

More stability - This is the biggest myth of in-house practice. In this active economic environment of mergers and acquisitions, law departments are at the mercy of upper management's business strategies. After a merger, entire law departments can be eliminated or, at the very least, "duplicative" attorneys let go. Even if the legal department is not disbanded, new management may want to bring in its own team of senior executives, including top legal personnel. Often, companies or divisions are sold or relocated, requiring unwanted transfers. Or, in a business downturn, a division or company may "downsize", and the law department can be among the first to go since it is not a profit producing part of the business. Or, the business or division can simply be shut down, leaving everyone without a job. Rather than finding more job security with a corporation, attorneys may find they have more control over their destinies with law firms where not all their work comes from one client over which they have no real control.

Can move to the business side - This is the dream of many attorneys who wish to segue out of the practice of law. As recruiters, we often hear this desire from attorneys who want to go in-house with an entertainment company in hopes of someday being "in the business". We call this dream "having stars in your eyes". It happens often enough to keep those dreams alive, but it is not very likely. Generally, corporations are very hierarchical, built more on a pyramid model than are law firms. At least in law firms, theoretically there is no limit on the number of partners who can be elected. While in a corporate law department, there is only one General Counsel, one Division Counsel for each division, and so on. Therefore, more junior attorneys can be roadblocked, and may wait quite awhile for there to be any opportunity for advancement within the law department. Moreover, in a large organization, it may be even longer for anyone outside the law department to notice a junior attorney's contributions and offer an opportunity to advance on the business side.

Being closer to the corporate action is exciting--While the trend is for corporations to cut costs by bringing more of the work in-house, in many cases the most sophisticated matters still are being referred to outside counsel. Therefore, much of the work remaining to be performed by in-house attorneys can be routine and mundane. Some jobs are primarily supervisory, such as monitoring the work done by non-lawyer claims managers, contract administrators, or other in-house or outside attorneys. For lawyers accustomed to hands-on sophisticated legal practice, this could be boring and unfulfilling.

Making the move from a law firm to in-house is a big career decision. Before embarking upon such a move, candidates must consider all the ramifications--and the realities.

Valerie Fontaine
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