Katia Bloom may be the new face of in-house counsel.

The sole U.S.-based lawyer at virus protection company Avira Operations GmbH & Co. began her legal career in house at biotech company Anesiva, where she was hired before passing the bar in 2008. While she did receive some legal training from the outside counsel and business training from the CFO, ultimately she learned on the fly.

Though there have always been exceptions, the typical in-house career path started with seven years at a law firm. Lacking a capacity and general desire to train new lawyers, most companies preferred to let new graduates hone their skills elsewhere.

But there are signs that’s changing rapidly, as companies large and small look to fill in-house slots with cheaper, more junior lawyers. With cost cutting at firms affecting both hiring and training, smaller companies are seeing more quality applicants and are now selectively hiring people with zero to five years of experience, recruiters and in-house managers say.

Evan Anderson, a recruiter with BCG Attorney Search, says that since late 2011 smaller companies are considering people with less than three years of experience. "I had never seen this before. It has always been at least five to six years before a company would bring a lawyer in house."

Increasingly more companies want to keep their litigation costs down and develop associates in house, Anderson added.

And there aren’t a lot of jobs at large law firms. "Big firm litigation was decimated in the downturn and hasn’t fully recovered," Anderson says.

YOUNG HIRES

Large Silicon Valley companies with commensurate legal departments and recruiting operations, including Hewlett-Packard Co., have a head start on hiring and training new grads. The computermaker started a recruitment and training program back in 2010 for attorneys coming out of school.

Now, for their own reasons, smaller legal departments are hiring lawyers within the first five years of practice. Local tech companies like Avira, SideCar, SanDisk Corp., Splunk Inc. and Infoblox Inc., have either hired lawyers within their first five years after school, or say they are considering younger candidates for current positions.

Milpitas-based flash storage company SanDisk, with 35 attorneys in its legal department, brought on a law school graduate at the end of 2012, general counsel Eric Whitaker says. That person had worked with the company before, as a student.

Data storage company Splunk in San Francisco has also dropped its prior experience criteria from at least 15 years to between four and six, as it rapidly expands its legal department, says its GC, Leonard Stein. His department recently hired a licensing specialist and is close to making an offer on a second lawyer, bringing the total at the company to 12. Stein says he expects three more hires by the end of the year.

As the company grows, there is more room for different levels of experience and more ability to train young lawyers. "We hire some people with spot-on experience for the position and others that we are willing to train and have grown with the company," Stein says.

At SideCar, the San Francisco-based ridesharing company, which is facing regulatory battles around the country, is looking to hire a second attorney with as little as two years of experience, says GC David Phillips.

PROPER SUPERVISION

For in-house managers, the trade-offs are obvious: Younger lawyers cost less but probably require more management.

"It’s a question of supervision and training. If you are hiring five to 10 lawyers a year, it may make sense," Whitaker says.

Louise Francis, an associate director and graduate class adviser at UC-Hastings College of the Law, says she’s seen an increasing number of graduates talking to companies about in-house roles.

Some companies want to bring in new graduates in a hybrid business and legal role "in order to still justify a paycheck," she says

But if it works out, they will move up through the legal department, she says. "I didn’t see this at all before 2009."

Scott Shipman, an eBay Inc. associate GC and leader of global privacy, has never worked anywhere except the online auction company. He joined in 1998 while still at Santa Clara University School of Law as part of the company’s legal internship program. He says the company occasionally brings new graduates into the legal program through the internship program. The question is, "Can we provide a meaningful learning opportunity and get meaningful work from them?"

As companies in the Valley grow and expand the legal teams, there will be more room for junior lawyers, Shipman says.

Cisco Systems Inc., which has a team of about 250 lawyers worldwide, had historically shied away from the idea, but recently has begun re-evaluating, says GC Mark Chandler. It has not had the resources to train lawyers in the same way that law firms can, he says, which would in turn make it more difficult for people starting off at a company to then transition to a firm.

However, "The legal market has changed dramatically. Law firms are not hiring as much and lawyers at firms are not being trained as well," Chandler says.

Whitaker says companies are competing for talent at an earlier stage, with lawyers looking to exit firms after just a few years. "There is a shift in the balance of power between firms and companies. Some in-house departments are becoming more akin to firms and want attorneys at all levels."

For SideCar’s Phillips, it comes down to promoting a younger generation of more tech-savvy lawyers, possibly at the expense of legal experience. "Companies on a technological edge will look for the qualities of digital natives," he says, and these are most easily found in younger lawyers.

THE DOWNSIDE

Daniel Cooperman, former GC at Oracle Corp. and Apple Inc. and now of counsel at Bingham McCutchen, says that it’s not uncommon for small startups to seek out young lawyers that they can hire cheaply, something that was commonplace for new, unproven companies during the dot-com boom.

"It is a terrible idea from a career development perspective for the lawyers," Cooperman says. "First working for a firm is a much better route. There is a greater mix of assignments, cultures and perspectives."

But with law firm jobs hard to find, some graduates may not have a choice.

Santa Clara-based network management company Infoblox currently has just two attorneys, including GC Robert Horton. Still, the stretched resources of Horton and his colleague, which would prevent much training, would not stop the company from hiring a newly minted lawyer in a "more paralegal role, who would then work their way up," he says.

Horton says it’s challenging because law school graduates don’t really know how to practice law. "At that point you’re hiring more for personality," he says.

Infoblox came close last summer to hiring someone still in school in a paralegal role, with the intent of bringing the student on full time if it worked out. In that particular instance Horton went with a more experienced paralegal, but is still open to working with new graduates.

Like others who entered the legal market after 2008, Bloom is a pragmatist. Part of a five-lawyer team at German antivirus software company Avira, she says if her department needs new lawyers, she would expect to look at new or recent graduates. The rest of Avira’s lawyers are in Germany.

Bloom, based in Burlingame, left Anesiva shortly after it declared bankruptcy at the end of 2009. She had her own two-lawyer firm for two years before going to Avira.

"Not going to a firm is a huge trade-off," Bloom says. "You don’t get the same volume of work. But the market crashed and the rules went out the window, so if someone is really promising, why not bring them in house?"

This article originally appeared in The Recorder.