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“Well, it seemed like a good idea at the time.” That’s what many in-house lawyers (and former, now-unemployed in-house lawyers) tell me, as they ponder their next move. The last millennium seems as if it were way more than four years ago, when our biggest worry was whether the ATMs and traffic signals would be working after midnight on Dec. 31, 1999. Third-year associates were leaving firms to become general counsel of public companies that were formed only a few months earlier. Easy money was everywhere. Going in-house seemed like a no-brainer: Why stay in private practice when the young guns were leaving to become millionaires — at least on paper? The answer came soon enough, as the market crashed and the tech and telecom companies began evaporating, fading with a whimper that stood in stark contrast to the bang they made when the words “New Economy” were uttered with awe rather than sarcasm. As for the men and women who left the comparatively safe and secure world of big firms and “Old Economy” jobs, a few were lucky enough to hit the dot-com lottery, but the vast majority have been left scratching their heads and trying to figure out how to get back in the game. Is it possible? For the first time in three years, things are definitely looking brighter. With the economy improving, there has been a small, though noticeable, uptick in hiring. What can people expect in the months ahead as they begin (or continue) their searches for their next firm or in-house jobs? Many who left partnership, counsel or associate positions to go in-house have found that the door usually only swings one way, at least in an environment where deal flow remains at relatively low levels. At the partner level, the chance of returning to one’s prior firm (let alone a new firm) as a partner or even as counsel is slim, absent a significant level of portable business. While some might think there is an element of firms exacting revenge on partners who were “disloyal” for jumping ship, in reality the decision has more to do with simple economics. Let’s assume that a typical large firm’s overhead is $250,000 to $300,000 per partner, and that a partner will be paid at least that amount: A firm is looking at $500,000 to $600,000 in costs before the first hour is billed. At a billing rate of $450 per hour, the returning partner will need to bill — and collect on — 1,100 to 1,300 hours of work just for the firm to break even. While that number doesn’t seem high, any partner can tell you that when the deal flow dries up, a rainmaking partner’s propensity to farm work out to service partners dries up even more quickly. Consequently, firms are unwilling to take chances on candidates who lack portable business. So if the partners can’t come back, what chance do former associates have? Ironically enough, in the short run, it might be easier for younger attorneys to return to firms once M&A activity increases. Why? Assume the Dow continues to rise and companies begin to move forward with the M&A projects that they’ve put on hold the last few years. Each one of those projects will require a partner’s attention, and one or more associates to do the grunt work (e.g., due diligence). While the larger projects may only need one partner, they can easily eat up two, three or even more associates. Once a couple of projects come in, there simply won’t be enough corporate associates to go around, since the firms have spent the past few years shedding corporate associates and diverting all of their new associates to litigation and regulatory practices. Moreover, the decision to bring on a new second- or third-year associate does not involve the same long-term economic considerations that drive new partner decisions. SKILL SET What about the in-house market? While there have been a few large firms that have gone supernova following the bust, the hit on in-house jobs has been 20 times worse. As companies vaporized, thousands of in-house jobs went with them, many of them likely never to return. Add to that the number of lawyers who still work at firms but who would like to move in-house (virtually all of them, judging by the number of calls I get every day), and you’re left with tremendous supply but little demand. With that in mind, what should lawyers — in-house or otherwise — looking for work do? For starters, I tell everyone who has a job to do everything possible to keep it. Danger lies in becoming so focused on the next big thing that you fail to keep your eye on the ball at your current job. In this climate, even a relatively modest dropoff in performance can have disastrous results. Better to wait out the situation in a job you hate than find yourself with no job at all. More importantly, in nearly every circumstance, you are more appealing to a prospective employer if you are already employed. Second, conduct a frank self-assessment of your marketability. While everyone might think his or her qualifications are unique, the fact is that for the vast majority of jobs there will be a number of extremely well qualified candidates, many with profiles nearly identical to yours. The trick is to candidly determine what makes you a better choice than anyone else out there. If you can’t come up with convincing reasons, chances are the company won’t be able to either. For example, consider how closely your skill set matches the position. When a company says it’s looking for someone with at least 12 years of experience in M&A and familiarity with telecom issues, they really don’t want to talk to someone who has done nothing but insurance litigation for the past 30 years, even if he or she went to Harvard Law School and has been a partner in Cravath, Swain & Moore since 1982. This might seem surprising to many (and discouraging to litigators), but a company’s willingness to “think outside the box” or simply hire the “best athlete” is pretty minimal, and is even more so in the current climate in which employers have the luxury of waiting for the perfect candidate to come along. But in-house lawyers can take heart in the fact that their corporate colleagues tend to value prior in-house experience far more than big firms do. I think many big-firm lawyers would be surprised to learn that if the general counsel of one of their clients were looking for a new deputy and had to choose between a big-firm partner with no prior in-house experience and a person who left big-firm life before making partner, but rose through the in-house ranks to become general counsel of a comparable company, the GC would probably pick the latter person 95 percent of the time. The reason? In-house lawyers are required to deal with a far greater range of issues on a day-to-day basis than those at big firms and face different pressures. Someone who has spent years in-house likely has already learned to adapt to these demands and navigate the political minefield of corporate culture. Finally, although pedigree alone won’t land you a job, it does still matter. Even if you’ve been practicing for 20 years, employers still care about where you went to school and how you did — though this may be more true for in-house positions than for firms, where $5 million in portable business can quickly erase any stigma associated with going to a lesser-known college or law school. For many lawyers depressed by the prospect of billing time for the rest of their lives, a legal career in the government may provide just the right balance of work and lifestyle. Many of my friends who have chosen careers at the Department of Justice, the Federal Trade Commission or the Securities and Exchange Commission are some of the happiest lawyers I know. Sure, they may not earn as much money as those who chose the big-firm route, but their hours are generally more predictable, the benefits are excellent and their jobs generally are protected from downturns in the economy. Given the squeeze that’s occurred in the private sector, government job searches these days are likely to be every bit as competitive as moving in-house, regardless of whether one is coming from a firm or in-house. Once again, the key will be how closely your own skills match the position. While there is finally a light at the end of the tunnel, the job market is still tight. Since the vast majority of jobs are filled without using a recruiter, I encourage people to keep building (and working) their own personal networks and to focus their searches on those jobs where they can honestly say that they have all the skills and expertise the job description calls for. Jeffrey Lowe is the founder and senior managing director of Major, Hagen & Africa’s Washington, D.C., office. Before opening the office, he spent nearly 15 years in private practice, the last 13 with Hogan & Hartson, where he was a partner and one-time chairman of the firm’s nationwide summer associate committee. He also is an adjunct professor of law at the College of William & Mary Marshall-Wythe School of Law.

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