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Increasingly, those who practice in law firms are wondering whether there is another way to earn a living in the practice of law. Attorneys in law firms frequently view the in-house position as a panacea for their complaints about law firm practice. They are aware that it comes at a price — a significant reduction in compensation. But hours and compensation are not the only difference between law firm and in-house practice. There are many other differences to consider before deciding to move in-house. In the first place, based on the laws of supply and demand, corporations can be very selective as to whom they hire. Corporations rarely hire attorneys directly out of law school. They usually do not have the time or staff to devote to training junior attorneys; instead, they look to law firms to provide the training for their future in-house staff. Most in-house legal departments require at least two years of law firm experience before they will even consider hiring a junior attorney. The candidate most sought after by corporations is five to seven years out of law school and has practiced in only one or two areas. This attorney should be competent to handle projects on her own, have sufficient experience to make reasoned judgment calls, and be able to instill confidence in the in-house client. On the other hand, staying in a law firm too long, seven to 10 years, can severely limit your marketability to corporations. Despite the flattening of corporate organizational charts, in-house legal departments remain hierarchal. Their pyramid structure means that many more positions are available at the lower levels than at the top. Like law firms, corporations hire based on year of law school graduation, and are reluctant to hire someone who has more experience than the job requires. Once someone is hired, however, the emphasis switches from year of graduation to tenure with the company. Those who graduated more than 10 years ago are qualified for relatively few senior in-house positions. Some major corporations in the area, however, hire only attorneys with at least 10 years of experience. And that much experience is typically required for a general counsel position. THE PERSONAL FACTOR Since in-house counsel must frequently interact with in-house clients, corporate counsel carefully evaluate a candidate’s interpersonal skills during the selection process. In-house legal departments need counsel who can instill trust with the corporate business people. Unlike law firms, in-house departments usually do not isolate any attorneys, even juniors, from the client. That’s why general counsel weigh experience and interpersonal skills much more heavily than law school and academic rank. SALARY AND BENEFITS Concern over compensation is one of the key reasons attorneys in law firms hesitate to move in-house. Their assumption that most companies pay less than law firms is correct. Just as starting salaries at Washington area firms range from as low as $50,000 to beyond $125,000, in-house compensation also greatly varies. For attorneys with strong law firm experience (three to seven years of experience in a particular area in a firm recognized as a leader in that area) compensation ranges between $75,000 and $120,000 per year. These attorneys will have to take a significant pay cut to go in-house. And those who have been practicing for 10 to 20 years, or even longer, earn between $100,000 and $160,000 per year. A few companies in the area attempt to match the cash compensation offered by major law firms, in part because they demand similar work hours. Bonuses, which are not guaranteed, range from 5 percent to 20 percent of annual compensation, and are based on individual or corporate performance, or both. Some corporations offer long-term incentive bonuses, which means that the attorney must stay for five or even 10 years to have even a possibility of receiving the bonus. Corporations are increasingly offering stock to nonexecutive-level attorneys. The possibility of joining the next AOL is irresistible — but often ultimately disappointing. A few senior in-house attorneys may earn upward of $200,000, including salary and bonus, which is what fifth-year associates earn at many major firms. General counsel of major corporations can be the exception to the general rule that in-house attorneys are compensated below their law firm peers. According to the 2001 General Counsel Compensation Survey conducted by The American Lawyer, the 100 highest compensated general counsel received an average of more than $1 million in salary and bonus during 2000. When stock options are included, annual compensation is pushed into the tens of millions of dollars. Why is an in-house position appealing to so many, despite this salary differential? In-house jobs do offer many benefits, both tangible and intangible, that one usually does not find in law firms. The most renowned benefit is working fewer hours. Although corporate life is now far from the cushy 9-to-5 job it once was, working on weekends is still virtually unheard of. Due to downsizing, budget cuts, and the philosophy of “doing more with less,” workdays in-house can be as hectic and almost as long as in a law firm, but weekends will nearly always be free. On the other hand, some in-house attorneys are dissatisfied because they feel underpaid, undervalued, or over-worked to the point that they fear they may commit malpractice. Like law firms, some corporations are offering flexibility in schedules and salaries to accommodate individual needs and reduce stress. Accommodations include reduced hours, working out of a different office, or telecommuting. QUALITY OF WORK Many who work in-house enjoy a wider variety of work than law firm practice offers. Many in-house counsel say that some practice areas, such as corporate transactions, allow them the luxury of keeping the interesting, challenging work and turning over to outside counsel the laborious, routine projects. (Attorneys in law firms take a different view of the type of work in-house counsel refer to them, but in any event it is typically in-house counsel who make that decision.) Additionally, in-house counsel become more involved in the entire matter, including the business concerns, while outside counsel see only an isolated segment of the problem. Outside counsel often lament that they do not see the big picture; in-house counsel, however, assist in implementing solutions and seeing the matter through fruition. This broad agenda requires in-house counsel to let go of, or start implementing, solutions or contracts before the elements of the project are completely finished. In-house counsel freely and uniformly admit that they must create or accept a “C” piece of work because they do not have the time to tweak it to a “B” or perfect it to an “A.” In-house counsel are not evaluated or rewarded based on the amount of time they spend on a project, but on what they produce. Obviously, substandard work is not acceptable — and typographical errors and other mistakes can reflect inadequate substance — but in-house counsel do not have the time to create a publishable piece of writing for each of their projects. Therefore, those who choose to go in-house must be willing to accept good work that is sufficient to get the job done, and not hold on to it until it is perfect. This change in priorities is so great and so important that corporations often favor a candidate who has already spent a year or two in-house over one who would be coming directly from a law firm. An attorney spends many years in a firm learning to be meticulous and thorough. Loosening this standard to the appropriate level is where mature judgment and discretion are critical. STATUS CHANGE One of the major complaints voiced by in-house counsel after they transition from a law firm is about their status. Not only do they usually take a significant reduction in income, for which they were prepared, but also they sacrifice the status they held in a law firm, even if they now hold the coveted GC spot. Whereas law firms exist for their attorneys, who are their most valuable assets, in-house lawyers are a liability — a cost center. Unlike law firm staff, the rest of the company does not exist to promote the efforts of its in-house attorneys, who may even be referred to as staff. There is no longer the important distinction between attorney and nonattorney. Business people in a company will question in-house counsel’s authority, opinions, and even the quality of their work! It is a truly humbling experience for many former law firm attorneys. Moreover, many corporations do not provide their attorneys with offices. Except for the top tier, most attorneys work in cubicles where their personal and professional telephone conversations can be overheard. Most corporations require their attorneys to work specified hours, just like other employees, and offer attorneys the same amount of vacation time, which is less generous than what many firms offer. This egalitarian, open environment can be disruptive to in-house counsel, even if they have offices. The clients they service are often in the same building — and can bound into their attorneys’ office anytime with a new urgent problem. The attorney must recognize that he is there to serve this client, along with many others. The job calls for diplomacy, tact, patience, and firmness with every client. SECURITY Job security may be a misnomer in the practice of law, whether working in a law firm or a corporation. An in-house position can be lost through downsizing, reorganization, change in management, change in board of directors, merger, acquisition, or myriad other ways. At the same time, associates, of counsel, and even partners in law firms are undergoing shake-ups with the downturn in the economy and the surge in law firm mergers and acquisitions. The market is flooded with attorneys, many of whom are competent and highly qualified. Attorneys who have a significant amount of experience are competing with in-house attorneys for the more limited top positions. The in-house attorneys with the most job security are those who are considered irreplaceable because of their skills and knowledge and work for companies that cannot be a takeover target. In-house life is very different from working in a law firm. Evaluate the pros and cons from your own perspective to decide which career path is best for you. Mary Adelman Legg is president and general counsel of Firm Advice Inc., a legal search consulting firm in Washington, D.C. She may be reached at [email protected] or (202) 861-7707.

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