"There are a lot of partners with sky-high rates at larger firms, and there is a definite trend toward building out in-house departments which can operate much more efficiently and cheaply," said Peter Redgrove, who runs Redgrove Legal Search in Los Angeles.
"Most law firm lawyers don't really know what their costs are," said Susan Hackett, the former general counsel of the Association of Corporate Counsel, who heads up the Chevy Chase, Md.-based Legal Executive Leadership. They typically just think in terms of billable hours, which don't constrain costs to the extent that most companies are looking for.
A fluid market
The rapidly evolving nature of technology companies is helping to fuel a fluid market for in-house talent, and there were a number of prominent moves in 2012.
In April, data storage company Box Inc. hired Peter McGoff, the general counsel at data services company Informatica Corp., about 18 months after the latter was acquired by Oracle Corp.
Paul Shinn, an associate general counsel at HP, went to network security company Gigamon this past May.
Michael Yang, an associate general counsel at Google, became the head lawyer at scrapbooking website Pinterest last June.
Recruiter Scott Dubin said an in-house attorney has a different operating framework than a firm lawyer, and companies generally prefer to hire both staff and lead counsel from other corporate legal departments.
Dubin said his in-house placements increased from only nine in 2010 to 19 in 2011 and 20 in 2012. Nearly 30 openings are currently listed on The Dubin Group website.
Whitaker, who was named general counsel at SanDisk in early January, said he left his previous head legal post, at electric car maker Tesla Motors Inc., without knowing his next move and very quickly received four job offers.
Upon leaving this past November, Whitaker said that, in addition to his current employer, he was approached by two different private companies, each about 18 months away from an initial public offering, along with a midsize public company.