In-House Insights

Ask a legal recruiter to name the one thing he or she hears most often from candidates and there’s a good chance the answer will be “I want to go in-house.” For many candidates, an in-house position seems like the holy grail of legal jobs, the solution to all the shortcomings of life at a law firm.

There is no doubt that in-house positions can offer very real and significant advantages. In-house lawyers have greater opportunities to get client contact, learn in detail the business of a company, and see matters through from beginning to end. In-house jobs can also offer better lifestyle (sometimes anyway—more on this below). Before becoming a legal recruiter, I myself was an in-house lawyer at a major corporation for nine years, and found the experience very valuable. Our company, Michael Lord & Company, regularly places candidates in excellent in-house positions in which they are very happy.

All that being said, it’s important to understand that the grass isn’t always greener on the in-house side of the fence. There are a number of potential pitfalls to moving in-house that should be kept in mind.

1. Opportunity is Practice-Area Dependent: It’s worth noting at the outset that an in-house move may not really be feasible in the first place for some candidates. An attorney’s ability to move in-house depends to a significant extent on his or her area of expertise. For example, while in-house opportunities are relatively common for corporate and intellectual property lawyers, such openings are far scarcer for litigators. Even litigation associates with outstanding academic and law firm credentials can find it difficult to locate and land a good in-house job.
2. Limited Training: Whatever the advantages of in-house may be, training tends not to be one of them. Most often, companies hiring attorneys are looking for candidates who can hit the ground running, with limited supervision. For this reason, those who make the in-house jump too early in their careers run the risk of finding themselves in over their heads, with insufficient assistance to successfully climb out from under.
3. Business Side May Not Be Attainable: Some candidates view an in-house legal position as a stepping stone to eventually shifting to a business-side role. While such a transition is not impossible, it’s important to understand that different companies have very different histories/attitudes regarding such shifts. One needs to be very careful if a business-side position is really the ultimate objective. Do not assume that being an in-house lawyer will necessarily get you to a non-legal management role someday: choose the wrong company/position and you might well find that as a practical matter the only way you are closer to the business side is that you occasionally share an elevator with them.
4. Reduced Salary: Typically attorneys moving in-house can expect to take a cut in base salary of 20-25% or more. Compensation does vary from industry to industry (for example, financial services firms typically pay far better than consumer products or pharma companies), and in-house positions do often come with attractive benefit and bonus packages. However, those contemplating an in-house move should for the most part be prepared to deal with a significantly reduced regular paycheck during the course of the year.
5. Client Relations Issues: A significant part of the responsibility of an in-house lawyer is keeping their employer out of trouble. At times, this means telling the client that s/he simply cannot do something s/he wants to do. Because sometimes saying “no” comes with the territory, a successful in-house attorney may occasionally need to be a skillful politician. You may think you know how to deliver unwelcome advice to a client from your experience as a law firm associate, but doing so can be a bit harder when the “client” in question is at your own company and can have a far more direct and immediate impact on your personal success or failure.
6. Organizational Role Issues: At law firms, attorneys are viewed as essential profit generators, without whom the organization would cease to function. The in-house lawyer, in contrast, is sometimes viewed a bit less charitably. The same company that is willing to pay high hourly rates to outside counsel may still view its own relatively inexpensive in-house lawyers as cost centers. No matter how self-assured they may be, some attorneys find after moving in-house that such perceptions matter to them, and that their professional skin is not quite as thick as they imagined.
7. Size Issues: Large and small companies each present their own potential challenges for in-house attorneys. At large companies, lawyers must often navigate through layers of bureaucracy well beyond anything they have ever experienced at a law firm. Hard to believe though it may seem, the typical law firm runs more efficiently than the typical Fortune 500 company, at least as far as the attorneys in the organization are concerned. And while smaller firms often have more efficient/flatter structures, that advantage can come with a significant cost of its own: smaller companies typically have a greater risk of struggling financially and/or being acquired, either of which can leave an in-house attorney looking for a new job.
8. Lack of Control/Security: Even apart from the particular risks entailed by smaller companies, it’s important to understand that job security for in-house lawyers is much different today than in the past. Once upon a time it was not uncommon for attorneys who moved in-house to spend the rest of their careers at one company. Today, this is considerably more of a rarity. As my colleague Andrew Gurman wrote in a recent article entitled The Illusion of Job Security and Practical Implications, “because of mergers, relocations and downsizing, in-house attorneys no longer have the job security that they had a generation ago. In fact, an in-house attorney may have far less security than a law firm attorney given that her/his fate is tied exclusively to one client.” Before going in-house, it’s important to ask yourself what would happen if that in-house job ended. If there is one lesson I have learned in my 13+ years as a legal recruiter it is that real security and control over one’s career as a lawyer comes only from having a significant book of portable business. While developing such a book of business may not be easy even for those at firms, it is nigh on impossible for those who move in-house.
9. Lifestyle Disappointment: When I ask associates why they are interested in an in-house move, far more often than not the answer is that they are looking for better/more predictable hours. While there still are in-house positions which may approximate the traditional “nine-to-five, five days a week” model, this has become less common than it once was. Particularly in tough economic times, companies will look to squeeze more out of their in-house legal departments. An eye on the bottom line has led many companies to reduce in-house staff (either through active lay-offs or passive attrition). Those left behind can often find themselves called upon to pick up the slack by assuming responsibilities once held by former colleagues. In addition, many companies have become far more aggressive in seeking to reduce overall outside counsel fees, and there is perhaps no easier way to accomplish this than by keeping more work in the hands of their salaried in-house lawyers who get paid the same no matter how many hours they work. Again, this is not to say that there are no longer any in-house jobs which provide good lifestyle—such jobs do exist. But if you assume (as so many seem to) that even the worst in-house job is likely to offer better hours than a typical law firm position, you are potentially setting yourself up for a nasty surprise.