Making the in-house move
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11 October 2013
More than ever before, private practice lawyers are being actively recruited to move in-house. Despite the potential salary cut, many are tempted by the promise of shorter working hours, a relaxing environment, no time sheets or billings, greater job security and the opportunity to become more commercially involved in the running of the business.
But Alison Burgin, a senior recruitment consultant at Badenoch & Clark, says: "The quality of life [in-house] is no longer as good." She believes this is mainly because companies are outsourcing less and demanding more from their own lawyers.
Martin Chivers, a director of recruitment consultants Career Legal Professional, says: "There is a shortage of lawyers, but there's lots of legal work." This means that lawyers who move to a company will often find "they are doing more hours than they'd expected".
Jay Gillman-Wells, former senior vice-president of telecommunications company ISL Worldwide, and now a Nicholson Graham & Jones partner, says: "You can be your own boss in some ways in private practice - you work whatever hours are necessary to get the job done. If you're in an in-house role you'd be expected to be in the office - you are not your own master. When I was working at ISL, I'd be called from the US at 2am. That type of thing doesn't happen in private practice as much."
Not only do lawyers who have made the move challenge the view that moving in-house means shorter hours, they also seek to dispel the belief that working in a company means a cosy and relaxed working lifestyle.
The banking sector, for example, is notorious for its stressful environment. Julian Stone, in-house recruitment head at consultants Garfield Robbins, says: "Being stuck on a trading floor at Goldman Sachs is harder than working in private practice in a banking department, where they work longer hours."
Richard Hanks, a banking specialist at legal recruitment business Taylor Root, says: "If you're in equity derivatives, you're more like a private practice lawyer because you're so specialised. But the environment will still be different. You'll be on the trading floor. It's very hard-hitting and very different from the environment of private practice. Lawyers will have to give an answer to a legal problem within 30 seconds that they'll have to stick by."
This relationship can create hostility between bankers and lawyers. "There are times when lawyers have an uphill battle to prove that they're adding value rather than just getting in the way on the trading floor. People just want to get things done. Lawyers need to balance that with making sure things are legal. Traders are impatient," says Hanks.
In-house lawyers must also relate to employees from various backgrounds. Nicola Maguire, a corporate assistant at Bird & Bird who was previously senior legal counsel at manufacturer General Electric Lighting, says: "In a company you're dealing with lots of people at different levels from different backgrounds. In private practice you're dealing with people from similar backgrounds, you can forget that other types of people exist. You have to be more approachable in-house. You can't force people to come to get your advice. They just want to go ahead and sign a contract."
Lawyers may also be surprised to find some in-house departments have billings and time sheets. Mark Naftel, former assistant general counsel of telecommunications company Tele Denmark and current Norton Rose partner, says: "I understand that some in-house departments are trying to run themselves like law firms. We had time sheets." He says this was done so that the information could be compared to outsourced work to measure its legal savings. "There was also internal billing," he says. "It can be more hostile than people think." But he says these methods are usually short-term fads exacted by management in companies.
Many in-house lawyers were shocked when they left private practice by the fact that they were required to prove themselves to be an asset to the company. "It's very hard to get respect in-house. You are an overhead," says John Buyers, who left IT service provider Cap Gemini to join KLegal's technology e-business and communications department as a senior solicitor.
In contrast, the value of private practice lawyers to their law firms is obvious - they generate fees. Richard Hastings, previously an IT/IP Hammond Suddards assistant in London, who is now group legal counsel at Interoute Telecommunications (UK), says: "What [firms] look at is how much you've billed and whether you've brought clients in."
Lawyers moving in-house may also be disappointed at their level of commercial influence.
Jo Christie, a recruitment consultant at QD Legal, worked as an in-house lawyer and in private practice when she was in her native New Zealand. She says: "I really enjoy talking to people in private practice about why they want to move in-house. Most people want to get close to the business. But one thing they should know is that, although you're part of the business, you're still a lawyer. It depends on the company. Some let their lawyers go loose and others are rigid and don't want any commercial input from them."
Some in-house lawyers feel that their legal expertise is used by colleagues to back up arguments in internal office disputes. Gillman-Wells says: "In-house positions mean you must deal with the politics of your clients. When you're in-house your sales or your marketing staff are the clients. There's always a level of competition within their environment. They try to use you as a tool for their power struggles."
Greater job security in-house is described as a fallacy. Experts say the stability of the job depends on the industry in question.
Stone at Garfield Robbins says: "When people go in-house they lose their stability. Banks sack people. Clifford Chance doesn't."
Certain industries, such as the energy sector, have a reputation for forcing lawyers out. Geoff Hewitt, former head of legal at Saga Petroleum UK who is now an energy consultant at Morgan Cole, explains that although he was not laid off, "a lot of people have been going back into private practice because many are being made redundant".
Another warning from lawyers who have been in-house to those thinking of moving in that direction, is that it is not always easy to return to private practice.
Hastings says: "In-house, you're expected to know everything about the law - employment, property, commercial and corporate. But in private practice everyone is specialised."
Experts say that technical legal depth may wane over time in a company. Maguire says: "It takes a while to get up to speed again." But these are not the only things to consider when moving in-house.
"The client side would also be an issue," says Chivers. "They have no following." This is because while working in-house the lawyer will have only one client - their employer. If they move to a firm they may not have any.
But although pressures are mounting for in-house lawyers, many people who move in-house are pleasantly surprised by their new pay packets. Burgin says: "Salaries are starting to reach private practice levels." She adds that there are other benefits such as company cars, stock options and performance-related bonuses. "You can be looking at 5-20 per cent of your basic salary again as a bonus," she explains.
But it depends on which sector the lawyer joins. It is hard to imagine a lawyer working for a factory in the regions earning as much as an average commercially-orientated private practice lawyer, for example.
But banks pay their in-house lawyers so much that a spokesman for Taylor Root says: "US firms are the only ones that can compete on salary."
Overall, the message that experts and lawyers are sending out to private practice lawyers is clear. Lawyers wishing to leave firms and go in-house should thoroughly research the company they are thinking of joining. If they fail in this, they may be in for a shock. Gone are the days when an in-house role was semi-retirement.