Reasons Not To Go In-House as an Attorney

What Is an In-House Counsel?

Lawyers generally choose to do this because they want to get involved in minimal business decisions or limit their involvement in the business details of having to solve problems daily usually associated with a private practice. The corporate counsel is spared of the trouble of being a business owner and could focus on the legal matters. They have set work hours, limited late night hours and more free time. They might be lured by the possibility of having stock options in the company. Many positions offer one or even all of these benefits and offer the attorney the ideal life. However, that is not the case for everyone. Several drawbacks to going in-house can affect your future legal career.

Why Going In-House May Not Be the Best Career Decision

It Is Almost Impossible To Go Back to the World of Law Firms After an In-House Job

After an in-house position, it is usually challenging (if not impossible) to get into a large law firm. In BCG Attorney Search, we review countless resumes every day, and many of them belong to lawyers who want to move from being in-house counsel back to law firms. Unfortunately, we cannot help many of them because law firms are not interested in hiring someone from an in-house legal counsel position. Why? There are several reasons for it.

The law firm environment is a particular one. It functions a certain way and has expectations that are not really in line with being an in-house counsel. Because law firm positions are always about working with various paying clients, deadlines and long hours are inevitable. Although legal counsel departments in companies also know deadlines and long hours, it is not as expected, and in-house lawyers can generally rely on their set schedule and more routine work. The standard for work quality is also extremely high, especially in the most prestigious law firms.

Such a demanding environment can lead some of them to want to slow down. Many attorneys move in-house once they are fed up with the unpredictable schedule, crazy work pace or the standards required for every work task. Law firms know this, so when they see a candidate coming from an in-house position, they expect them not to work as hard as attorneys who have always been in the law firm environment.

There is a set course every lawyer in a law firm is expected to go through. They have to work hard right from the outset. They are required to specialize, become experts in their specialization, gain more responsibility and create great professional relationships with their clients. With this continuous advancement, these lawyers can increase their billing rates and they are also expected to start generating their own business to move up the ladder in their law firm.

Attorneys who have left a large law firm to be legal counsel in a company have departed from this set course. In-house attorneys are usually not specialized and can be considered generalists. Law firms do not want an attorney who knows a little about everything because they are not interested in someone who knows a bit about everything. They need more than just legal advice, they need experts with specializations. Not even the top law schools can guarantee you a position in a major law firm once you have entered the in-house world. Moving in-house shows the law firms that attorneys are not committed enough because they did not go the route every law firm attorney is expected to.

Of course, there are instances they find significant law firm positions after leaving an in-house job. Those are generally attorneys who were able to specialize in legal counsel departments as patent or tax attorneys. Or attorneys who could get into legal departments of substantial corporate companies, such as Disney or Ford Motors. However, it is not easy.

Legal counsel positions in companies are not that stable because you never know when your company merges with another or goes under, while returning to a law firm might turn tricky and awry. That is why you need to think it over before going in-house. It is always best if you have gained at least a few years of experience and some contacts in law firms if you ever see the possibility of returning after your stint as a corporate counsel.

You Will Probably Not Get Super Rich Overnight

Many attorneys believe that if they become general counsel in a tech company or a huge corporation, they will become millionaires in a few years because of a compensation plan and stock options. It is probably the result of what happened at the end of the 1990's and the beginning of the 2000's when a boom of tech start-ups became some of the most successful companies we currently know. Attorneys quit their law firm jobs and started as legal counsel in companies through which they earned millions of dollars in stocks within two or three years that other lawyers began to believe that if they went in-house, this would happen to them as well.

While it can certainly happen occasionally, it is not in the numbers as it was around 2000. Back then, especially corporate attorneys were leaving law firms in swarms and found success wherever they went. Today, it is much more common for lawyers in law firms to increase their income significantly in a short amount of time.

From my experience as a legal recruiter, I have noticed that when law firm attorneys move to be in-house legal counsel, they rarely end up making more money than they were in a law firm. Even though the income of a legal counsel is generally calculated by combining their monthly salary and stock options, most in-house lawyers earn less. Of course, if you can get a position in a massive corporation as their general counsel, you will probably increase your income. However, most in-house attorneys do not work in these huge, successful companies.

The critical thing to remember here is that many attorneys lose their in-house positions for various reasons and are forced to leave the legal profession altogether because they cannot find a legal job after working in-house.

Companies go out of business, merge, or otherwise change their structure much more often than law firms. Of course, law firms go under as well; however, when you start working in a law firm that has been on the market for over a hundred years, you have at least some sense of stability. Law firms are some of the most stable work environments there are on the market. With companies, especially start-ups, even when they are promising, this security is not there. If you are thinking of going in-house, it is essential to do a cost-benefit analysis that includes these factors, like the possibility of your company going bankrupt or merging with another company that wants to change up their general counsel, etc.

I have a personal story from times when we still were working with in-house attorneys at BCG Attorney Search that illustrates how a general counsel position that looks promising can quickly turn into a huge career mistake. I was sitting in on a meeting between a major law firm and their tech start-up client looking for a person to become their general counsel. I was supposed to find them this attorney, so I was there to find more information to handle it.

The company was in the accounting industry and had just received several million dollars in funding for a project. They wanted accountants to bid for an opportunity to do someone's tax return. The critical aspect of this platform was supposed to be that the lowest bid would always win. Everyone in the meeting was happy sitting there because they were supposed to be paid out in stock options just like me, and no one objected to anything. Why would they? They would be getting nice checks for their choices.

However, sitting in the meeting for hours, I did not have anything else to do but to think about the company and how it would function in the real world. How do they know that the cheapest accountant (who would win the bidding) would not make a mistake in the tax return? When I raised this question, everyone from the company started saying things about the free market and kicking out accountants who had previously done excellent tax returns. People not choosing their accountant did not make sense to me, so I was quickly out.

An associate from the law firm ended up taking the general counsel position, thinking he would make a bank after a few years when the company would take off. However, only a few months after taking place, the company reduced his salary to half of what it was, and a couple of months after that, he was let go. After being in-house, he could not find another job in a law firm and was forced to take a part-time in-house position in a small firm.

It is not a unique situation. Many attorneys find themselves in similar circumstances. It is possible to gain wealth as a general counsel for a company; however, it is also possible to lose almost everything by such a move. It is necessary to weigh your options and the potential consequences of making the best decision for your situation.

Getting Another In-House Position After Already Having One Is Very Difficult

Just like law firms do not want to hire in-house attorneys because they are not sure if they have the right skills, companies do not generally want to hire in-house lawyers that are not already familiar with their company. The best candidates for in-house positions are always attorneys from law firms that regularly work with that particular company, are already familiar with the business' needs, structure, and people, and are already trusted by the people in the company. The company is already paying massive amounts of money for that particular attorney, so why not hire them directly and save a little at the same time?

As with everything, there are some exceptions. If you are an experienced legal counsel in a particular industry and a company in that industry needs in-house counsel, they have every reason to hire you. A data privacy attorney who worked for Facebook will probably be employed by a similar company, such as Google, if they need a data privacy attorney. However, in-house attorneys usually have a pretty hard time finding other in-house legal counsel positions after having one.

It is naive to think that you will stay with one company your whole professional life. Many companies go under, merge, change the structure, downsize, or move, and you can quickly lose your job in any of these situations. Therefore, it is wise to expect that you will have to look for a new job at some point. And it can be challenging once you have already worked as an in-house counsel.

Attorneys working in law firms that their clients do not invite to become their legal counsel often spend months applying to in-house positions. This situation is even worse for lawyers who have already worked as counsel inside a company. There are not that many in-house positions on the job market. Most companies cannot afford to have their legal departments, and those who have them have only limited places. That means that you will probably have a queue of attorneys waiting for every job, and coming from an in-house position puts you at the end of the line.

The Quality of Attorneys' Skills Goes Quickly Down in In-House Positions

The expectations for a legal counsel in a company and a law firm are very different. Legal counsel usually has to delegate any more extensive and more sophisticated work to an outside law firm. In contrast, attorneys in law firms always do everything on their own and turn in spotless work. Not working on challenging legal tasks inside a company results in significantly deteriorated skills. Without proper and consistent training, even the best attorneys would lose their hard-earned abilities.

That does not mean that in-house lawyers do not work hard because they do, and some companies even let their legal departments work on their more significant legal matters within the company. However, it is not standard practice, and many companies want major law firms to work on their litigation or IPO issues.

You May Still Have To Work Extremely Hard, Just Like in a Law Firm

Many attorneys choose to go in-house because they believe that the work pace there is a little slower than in a law firm and that they have to work as hard. It is often true; however, it is not always like that.

Even though becoming an in-house attorney often gets you out of the world of billing hours and chasing what hours you can get, companies do require billable hours. A more predictable schedule is often associated with moving in-house, which can be a big plus for many attorneys. However, attorneys working as general counsel or in higher legal counsel positions spend as many hours working as attorneys in law firms.

Many law firms, especially those major and prestigious ones, are known for putting a lot of pressure on their associates and partners to work extremely hard. They often spend weekends and evenings at work, so it is no surprise that many of them want to change up their environment for a place where they have a set schedule. But huge companies want only to keep people willing to work as hard as needed, just like law firms. If an attorney wants to work under a big name, they have to be prepared to work a lot regardless of whether it is a law firm or a position in a company's legal department.

Attorneys there bill their hours, consider people and departments in the company to be their clients, and have to work a lot to handle all of the work tasks. In firms where attorneys do not have to bill their hours, attorneys do not have proof of working overtime to get bigger bonuses.

It is also a known fact that the work environments are changing with time. Many in-house legal departments have started to be more demanding and want their attorneys to do more work inside the company instead of hiring outside law firms. It is mainly to save money, but it results in in-house lawyers having a similarly demanding job to what they had in law firms. On the other hand, law firms have started to shift to be more flexible workplaces. Many law firms now allow remote work, home office, or reduced working hours that provide their attorneys with a more flexible schedule.

Conclusions

If you consider going in-house as an attorney, I recommend you stop and think about it a little longer. Attorneys who go in-house find everything they are looking for - a schedule, less stress in the workplace, a hefty salary with stock options - but there are also horror stories from attorneys who failed miserably.

I do not want to discourage you from a tremendous in-house position as those in giant corporations can result in wealth and success. But the in-house environment is not always as great as some attorneys like to paint it. It has its drawbacks and implications for a future career that You cannot avoid once you go down this route.

Law firms are also not as bad as many people in the legal profession like to paint them. While the large, prestigious firms are demanding and stressful, there are always smaller, more local firms and firms that embrace the flexibility that you can consider before making the decision that might end up leaving you out of the profession for good.

See also:

• The 'Dark Side' of Going In-house
• Transitioning From An In House Environment To A Law Firm
• Why Going In-house Is Often the Worst Decision a Good Attorney Can Ever Make
• Pros And Cons: In-House Vs. Law Firm Practice
• What Do In-House Attorney Positions Pay?