In-House Job Search: Are You Too Junior?
The lateral job market between law firms and corporate in-house legal departments is a tale of two cities. What law firms are finding attractive in a potential candidate can sometimes be quite the opposite from what corporate legal departments are seeking. One of the best examples is experience. While attorneys with three to five years of experience are considered “hot” commodities by law firms, the great majority of corporate legal departments give them the cold shoulder.
The sweet spot for law firms that are hiring is three to five years of experience. There are several reasons for that. First, law firm associates with three to five years of experience have the highest level of attrition. According to statistics released by The National Association for Law Placement, almost 80 percent of attorneys at large law firms no longer work there five years later. The reasons for this high rate of attrition are varied. They include disillusionment with law firm life, not “cutting it,” being in a practice area that is drying up, or simply realizing making partnership is an unlikely goal. Whatever the reason might be, large firms hire significantly more associates than they plan on keeping for the long-term. Therefore, law firms are always on the lookout for talent to replenish these classes.
The other reason law firms have a strong appetite for attorneys with three to five years of experience has to do with their profitability. At this level of experience, associates can tackle more complex work with little supervision at a relatively affordable hourly rate. Whereas law firms claim to lose money on associates during their first three years of practice, they have plenty to gain once these same associates have been trained and can handle the bulk of the work partners are bringing in. They are instrumental to a law firm’s profitability.
When it comes to in-house legal departments, the story is quite different. Corporate legal departments are generally not interested in attorneys with three to five years of experience. Of course, there are always exceptions that prove the rule, but what we are discussing here is the rule, not the exception. Traditionally, corporate legal department are seeking experienced attorneys, with at least ten years of experience to join their ranks. The most sought-after candidates are transactional attorneys with strong business acumen, who can get up to speed quickly, understand operations, and deliver results in a fast, practical, and efficient manner.
Corporate legal departments are not good training grounds for junior and inexperienced attorneys. Corporate legal departments expect their attorneys to have a strong depth and breadth of knowledge, work independently, and with few resources. Generally, they are seeking attorneys who have developed a solid understanding of their industry, which also comes with practice experience. Sometimes, companies advertise for less-experienced lawyers who have been practicing for five to seven years. This is typically driven by a need to hire experienced candidates, but at a reduced cost. Attorneys with five to seven years can usually deliver the type of work handled by in-house legal departments, but they are generally less expensive than their more experienced counterparts. That said, more often than not, attorneys who are more experienced than the position requires fill these same positions.
What does this mean for junior-level attorneys with three to five years of experience? It’s typically best for them to hold off on their in-house search for a while. There are several reasons why they should wait. The most obvious one is demand. There simply isn’t much of a demand for junior attorneys in-house. Junior attorneys need to be patient and wait before trying to make a lateral move in-house. We are not likely to see an increase in demand for junior-level attorneys in-house, even if the economy picks back up. Attorneys thinking about going in-house should focus on developing their practice skills, business sense, and industry-specific knowledge. Attorneys typically start being marketable in their fifth year, and have more available options starting in their tenth year in practice. In the meantime, cultivating skills, until the optimum time has come to begin an in-house job search, is the best way to prepare for that type of lateral move.
In-House Legal Department Predictions for 2012
The good news for in-house lawyers in 2011 was that there were raises for base salaries and a slight uptick in hiring. The bad news is that those improvements were relative. Base salary raises were very slight compared to the rate of inflation,. They also came after several years of salary freezes. Bonuses did offset some of these lackluster base salary numbers, but being tied to company performance, not everyone enjoyed them.
The uptick in employment did not stem from the creation of new positions per se, but rather as an effort to replace departing attorneys and rebalance overworked corporate legal departments that had suffered heavy layoffs during the Great Recession. In other words, the number of available in-house attorney positions remained quite low. On the other hands, there was some positive movement out there, which we expect to continue in 2012.
What Will In-House Legal Hiring Look Like in 2012?
The hiring trend that we identified in 2011 by corporate legal departments is likely to continue in 2012. The good news is that corporate legal departments are planning to hire in 2012 – about 40%. The bad news is that the majority of the hires will not be full-time attorneys.
Corporate legal departments are dealing with a heavier workload in part by using more paralegals and contract lawyers. About 67 per cent of corporate legal departments are comprised of lawyers with the rest made up of paralegals and other support staff. Legal departments are still operating with flat or decreasing budgets, and therefore, they are seeking the highest level of competency at the lowest cost. Compliance and contract review has been increasingly delegated to paralegals and contract managers. In other words, corporate legal departments are hiring more "staff" rather than "lawyers" in an effort to improve efficiency rather than “bulk up.”
What Are Corporate Legal Departments Looking for?
Corporate legal departments that are hiring full-time lawyers are doing so primarily to replace departing lawyers or add a specialty to handle work in a growing area. While corporate legal departments may be conducting some hiring, they are definitely looking for “more bang for their buck.” What exactly are they looking for?
Corporate legal departments are looking for experienced (5-10years) all-around corporate lawyers with a broad legal background, strong business acumen, and proven management skills. And that’s just the tip of the iceberg. Factors that are also taken into consideration includes national law firm background, few transitions, specific industry experience, and proven in-house track record of success.
The ideal candidate is a businessman who happens to be a lawyer, not the other way around. This is in response by corporate legal departments to want to demonstrate to the C-suite that they have what it takes to handle legal matters in a manner that contributes to the bottom line. Today's in-house attorney has to be packed with achievements that show how he/she can contribute to the company's bottom line; being an excellent lawyer is simply not enough.
What Are In-Demand Practice Areas?
General Business/Corporate Law (M&A a Plus) – Attorneys that can handle a company’s various transactions, regulatory and compliance matters, while understanding the business, and managing internal and external counsels, are the most in-demand. Attorneys with all of the above, and a strong M&A background are also prized.
IP/Licensing – The wave of protection for innovation that was driven by the Great Recession continues. As a result, licensing is a very hot in-house practic. An increase in patent prosecution has also heightened the need for attorneys with experience in trademarks and patents.
Contracts & Compliance – Corporate legal departments have an ongoing need for support to handle contracts and licensing. They are increasingly hiring contract administrators to manage procurement issues, and paralegals for compliance issues. There are some attorney-level hires, but these tend to be contract attorneys or contract administrators with a law degree.
International – As companies look to focus on expanding their core businesses and increase their market share, they are likely to look outside of the U.S. as part of their competitive strategy. This will drive the international law practice. U.S. companies will continue to look opportunities in the three most popular emerging markets—Brazil, India and China. Some other markets that may generate some new and renewed interest may include Mexico, Vietnam, Korea and the Middle East, with Turkey, Saudi Arabia, and the United Arab Emirates as attracting most of the attention. This boost in international transactions will come primarily from companies in the consumer and infrastructure sector seeking to expand into new markets.
What Will Compensation Look Like in 2012?
Total compensation for in-house counsel will most likely continue to rise, albeit modestly in 2012.
Base salaries will see moderate increases (around 3%). Raises will be primarily reserved for in-house attorneys that bring something unique and/or can save money by managing projects, people, and budgets. In other words, senior lawyers (10+ years) with management responsibilities at publicly trade companies, and specialty area lawyers (healthcare, patent, IP, etc.), will enjoy higher compensation levels.
Average In-House Attorney Compensation:
4-9 years = $100K-$180K
10+ years= $130K-$220K
Bonuses are where the difference will be made up.
Gone are the days of earning a bonus at your boss’ discretion. Today’s in-house counsel bonus is driven by: individual performance and company performance. In-house lawyers are held accountable for their contributions to the bottom-line, and are asked to share the risk of their company’s performance. If the economy continues to improve in 2012, and companies perform well enough to be able to share the rewards, then bonuses will continue to rise.
What Else Could You See in Your Stocking for 2012?
Companies are reticent about reaching into their pockets to offer more cash up front in the form of salaries. They want to see a return on their investment. That said, for hard-to-find candidates and performers – there are making efforts, if not with cash, by offering other incentives that include:
• Telecommuting
• Flexible Hours
• More Vacation Time
The Bottom Line
Hiring will still be very tight for 2012, but we will continue to see some improvements. Performance-based compensation is also here to stay. This is still driven by the economy, and while we have been through the worst since 2007, we have not quite gotten back on track yet. Our economy is still very unpredictable and fragile. Companies are hoping for the best, but still preparing for the worst. Most organizations are remaining conservative regarding their fixed costs, including their salary expense. Therefore, this will continue to make for a sluggish hiring market. We may see some small increases in base salary if the economy continues to slowly gather momentum. At the end of the day, much of the growth will be in bonuses. Hiring will focus on staff that can handle more commoditized work, and experienced management-level corporate attorney and specialists.
In Search of That In-House Spot? Some Words of Advice.
If you are in private practice, either as an associate or a partner at a law firm, you’ve probably wondered at one time or another what it might be like to go in-house. You may have envisioned a world without billable requirements, business development, free weekends, and possibly less stress. Perhaps you are intrigued by the prospect of working with a single client, knowing where the work will come next, and have an interest in being viewed more a business partner, and less as a fire extinguisher. The grass being “greener” on the other side is not necessarily a reality. In fact, the reality often looks quite different. But when it comes to going in-house, law firm attorney seem convinced that this is a better way to practice law, and whether that’s true for most, the in-house call remains irresistible.
Since the recession, the legal market has never quite bounced back. Talk of signs of improvements in hiring and compensation are true, but it is also relative. We experienced one of the most massive and deepest bloodletting the legal market has ever experienced. Therefore, while the legal market may no longer be hemorrhaging, it’s not exactly thriving either.
We never completely reabsorbed the thousands of attorneys who were laid off because of the recession; not to mention scores of others who were unsatisfied with their current jobs but held off by their skin of their teeth to ward off the specter of long-term unemployment; as well as those near retirement who saw their life savings dwindle and decided to stay on in the hopes of replenishing their nest egg. Of course, that does not account for the perfectly happy law firm attorneys with dreams of going in-house, or in-house attorneys looking for a raise, advance, or simply a change. That’s quite a crowd!
To say that today's market for in-house jobs is extremely competitive is an understatement at best. The number of applicants for each in-house position can often run into the hundreds, if not more, and employers have the luxury of being able to wait for the perfect candidate – and sometimes the “impossible to find dream candidate.” Finding an in-house job in this legal market can be quite a challenge.
Our firm handles hundreds of in-house searches each year, ranging from general counsel positions with Fortune 100 companies to junior lawyer positions with small, privately held companies. We speak with thousands of lawyers each month, and scores of corporate legal employers. We have a pretty good sense of the trends and general state of the in-house legal market. If the desire to move in-house has not dampened, the success rate on the other hands has dipped.
If you are still convinced that going in-house is the right move for you, let me offer some advice and a few things to consider as you begin your search.
The Road In-House Is a Long And Tedious One
When you are starting to put a resume out there, the first question you might have is, how long is it going to take me to find an in-house job? The obvious answer will be, it depends. Factor that affect how long a job search will have has to do with the applicant’s specific experience, background, financial flexibility, geography and willingness to relocate, and the type of positions he/she is seeking. If you are looking for a GC-level position with a publicly traded Fortune 500 company – the wait might as long as winning the lottery. That said, a good rule of thumb is anywhere between six months to a year, and in many cases a lot more.
Why the long wait? It’s a simple economic formula or supply and demand. Very little demand and a whole lot of supply equal a long road to success. Also, unlike law firms, which are very "flat" organizations, corporate legal departments are typically pyramidal. Therefore, the higher the level, the fewer jobs there are available. Of course, not all candidates are created equals, so the more exceptional the background and experience, and the more flexible the candidate, the shorter the road. Then again, a road that can take anywhere between six months to a year, it not what I would necessarily call short.
Why are there so few in-house legal positions? While the state of economy provides part of the answer, the other has to do with the manner in which corporate legal departments are structured. Unlike in the law firms that are always looking for opportunities to hire lawyers that will improve their bottom line or service their clients, corporations are not often looking to add great legal talent. Whereas law firm lawyers are valued for bringing in business and generating income, in-house lawyers at corporations are viewed as part of the overhead. Rather than generate profit, they tend to cost money. Therefore, corporations have to do a cost-value analysis whenever they are considering adding a legal professional. That analysis has certainly been a lot more stringent as corporate legal departments have to do more with less, which also means fewer people.
Fortunately, the push of companies to save money has also forced them to rely less on expensive outside counsel, and more on their in-house legal departments. This has translated in some hiring efforts by companies; however, hiring has been very selective, and attorneys have been stretched to do more. Therefore, while you may feel that your legal expertise is exceptional, if the corporation already has someone else handling those responsibilities in a capable manner, there is little upside to having two people handle the same tasks. You have to be the right person, at the right place, and at the right time.
Recruiting Firms are Not Job Placement Firms
When there are so few positions advertised, it’s easy to understand why candidates decide to work with legal recruiters. However, before you send that resume or make that phone call, you should understand the advantages and limitations of working with legal recruiters. For example, the in-house searches that our firm agrees to undertake are done on an exclusive basis, which is the case for most other legal search firms. This means that our firm is the only search firm being engaged to fill the position and that the company will not accept resume from any other search firm. This means two things: Our client list is unique to us, and we only present candidates to our clients to fill a specific job opening.
In the in-house context, a search firm is not a placement firm. We are hired only to fill those in-house jobs for which we have been retained. Companies generally don't want search firms to send on resume unless the company has already identified a new need and asked the search firm to assist it with the search. So although you may be an exceptional candidate, a search firm is typically constrained by the companies that have engaged it to conduct searches for them.
Finally, because our clients retain us, the positions we are working on do not represent all of the in-house opportunities that are available out. Therefore, reaching out to just one search firm isn't enough for those people looking to go in house. Applicants instead need to find out who handles the in-house searches in their market and reach out to all of them. If the applicant is seeking a law position, my advice is the opposite. That candidate should only pick one recruiter to represent him or her.
What’s the greatest tool for finding a new in-house job? Your connections. In other words, you have to network and let people know you're looking. While there might be some risk of your boss or colleagues ultimately finding out, we think that the benefits to networking far outweigh those risks. Networking is the most effective way to get leads and land an in-house job.
If I had a dollar for every applicant that sent a resume for a position they were not qualified for, I might be able to give Bill Gates a run for his money. The problem I believe is twofold: applicants send their resumes to jobs that sounds interesting and that they would like to have, whether or not they are truly qualified for them, and/or they are so desperate to find a job that that they will throw their resumes at everything under the sun, hoping that something will “stick.”
Whatever the reasoning, do not waste your time applying for positions for which you are not a perfect fit – rather than maybe qualified to do. Why? Because the lack of response will soon frustrate you, despite all of your well-meaning efforts. If the position calls for someone who has fluency in Chinese and software licensing experience, the fact that you took a Chinese course in college and drafted one licensing agreement does not make you a perfect fit. You need to be as exacting about your skills and qualifications as a legal employer will be. What do I mean by “perfect fit?” The test is quite simple: After having read the job description, can you honestly say you meet each and every single one of the requirements listed? If the answer isn't yes, move on.
The road to an in-house position is not an easy one. But to help your chances of success, you need to first be ready for a long process, be honest about your qualifications, and make the effort to grow you internal network. Anything less, and you might never get that shot at an in-house position.
Could the In-House Legal Market Be Improving?
The legal job market has never picked back up since the recession, and talks of market improvements have been rather more wishful thinking than reality. In short, the legal job market has been grim. Yet, there might be a glimmer of light on the horizon coming from in-house legal department: hiring may be on the rise.
A recent survey from HBR Consulting, a consultant to law firms and law departments, shows that in-house hiring may be on the rise. This is a trend that we have been noticing at ESQ Recruiting as well.
What’s prompting a rise in hiring at corporate legal departments? A concerted effort by companies to reduce their legal expenditures and reliance on outside law firms. Legal work has not lessened, if anything, it has increased as a result of recent regulatory changes. As a result, companies are seeking to bring more of the work in-house, which could mean more in-house jobs.
Companies also seem to be on the rebound. According to the annual Association of Corporate Counsel survey, only 54 percent said that their department has been affected this year by the economic downturn—a significant drop from the 74 percent reported in 2009. In addition, the survey also indicate that CLOs were planning to add staff in the coming year, 37% more than reported in 2009, 2008, or 2007.
It also looks like corporate legal departments are willing to spend a little, to save a lot more. The Altman Weil and LexisNexis Martindale-Hubbell survey found an overall increase in law department spending of 7.9 percent to an average spending of $914,000 per lawyer for fiscal year 2005. Outside legal costs rose by 5.5 percent to an average of about $602,000 per lawyer. The survey also found a 19 percent increase in internal hiring with lawyers per billion of revenue rising from 2.93 lawyers per billion in revenue to 3.49 lawyers per billion in revenue."
The results of the 2011 HBR Law Department Survey compiled information from 219 companies in 20 industries. Seventy percent of the participating companies had revenues at or above the Fortune 500 level. Key findings from the survey include the following:
- More than 50 percent of companies reported an increase in worldwide legal staff between 2009 and 2010.
- More than 80 percent of companies said their legal needs are increasing.
- More than 40 percent of companies plan to increase the number of internal lawyers by an average of 10 percent in the next year.
- About 60 percent of survey participants cut outside legal spend by an average of 3 percent between 2009 and 2010.
What does this mean? Corporate legal departments are opening their doors, which is a good sign, but that does not mean that the market is necessarily looking very rosy. Those positions are still few, very competitive, and companies are setting the bar very high for new hires. The good news is that the trend is looking to continue, which may lead to more opportunities for lawyers seeking in-house positions.
When Is It Time to Hire A GC?
While the general trend by most companies is not to hire, when outside counsel bills are stacking up, and executives get too bogged down with the process of drafting sales contract, the time might be right to hire the company's first in-house general counsel.
When a company starts to emerge from its startup status, and the overhead increases with each partner and associate that is engaged to handle more of the company’s work, the right economic decision is usually to bring in a GC.
Most companies that are ready to bring legal in-house share the same concerns: mounting outside legal costs, increasing legal work, and the need for someone who really knows the business well to position the company for the future.
A GC can not only help a company gear up for the next stage of growth and success, but also help a company prepare or prevent a potential crisis. On needs only look at the recent corporate scandals, such as stock option backdating, to understand just how important it is for companies to be properly protected. One of the many reasons companies are considering hiring a GC is to have someone who can immediately see the big picture for the company, and be able to keep them out of trouble.
What should a company look for when trying to hire its first GC? Typically, a “jack-of-all-trades” with a solid ten years of prior legal experience, and industry specific experience. A good GC should be able to the build an appropriate governance structure and do good corporate governance on a shoestring budget. Prevention of problems can go a long way towards saving a company money, something that corporate America seems to be in agreement with.
In general, the size of companies' in-house legal staff has been on the rise, according to reports from the ACC, growing by nearly 40 percent in the last decade. While companies have been shedding some lawyers during the recession, GC hiring has been steadily on the rise. In light of increasing regulatory demands and corporate scandals, and a soft employment market, this may be a good time for companies to assess their needs, and consider building a legal department.
Coping with a Change in Employment Status: How To Bounce Back.
We regularly read and hear that "jobs for life" are disappearing, to be replaced by a pattern of consecutive jobs and unpredictable career dislocations. When the time comes to face such a change on a personal level, these statistics take on a whole new meaning.
The emotions one experiences during a change of employment status are entirely normal. Although no two people react exactly the same way, most of us experience a range of emotions that includes shock, denial, anger, worry, depression, resistance, relief, acceptance, and the need to take action.Fortunately, a change in employment status does not have to lead to a gloomy spiral of events. Your initial feelings of anger, frustration and despair can and will be overcome and eventually replaced by feelings of acceptance and control.By thinking positively, taking appropriate action and looking toward the future, this transition can become an opportunity to secure a more satisfying position. Throughout this process your recruiter can help you take constructive and creative steps towards developing a positive job campaign, and moving to the next step of your career.
Facing the World During Your Job Search. Family, friends, neighbors and colleagues may already be asking you "What happened with your job?" This is a question you will frequently hear as you begin your job search. It is important to handle this question capably, regardless of who asks it. Therefore, one of the first things you should do is develop a response that is truthful and acceptable to you and prospective employers. When creating your response, you should consider applying the following: (1) keeping it short and factual, (2) be as positive as possible, and (3) put your best foot forward, but remain truthful.
Keeping it Short. Generally, the more you try to explain, the more difficult your explanation becomes. You should prepare a short, to the point statement, and be prepared to answer follow-up questions, but only if they are asked.
Be As Positive As Possible. Negative statements about your former boss or employing organization will only hurt you. The last think you want to do is burn bridges, or give a prospective employer the impression that you are a disgruntled employee. By keeping your statement as positive as possible, you will only help to advance your candidacy.
Put Your Best Foot Forward, But Remain Truthful. There are a number of factors that result in someone leaving. Explain them to your recruiter, he or she will help you determine reasons that are most positive and easiest to explain, while remaining truthful.
What it Takes to Succeed. First, it is important for you to believe that you will succeed in your job search. In order to do this, you should take some time and determine your strengths, and clarify your objectives. The following steps will help you put together an effective plan for your job search, and help you create a strategic plan:
(1) Take Stock. You should identify past successes, current strengths, overall work style, and personal preferences.
(2) Refine Your Career Objectives. You should be clear, focused, and realistic about your career objectives, based on your past work experience and academic credentials.
(3) Make a Dynamic Presentation. Working with a recruiting professional may help you to draft an effective resume and cover letter, and review interview skills so that you may be at your highest level of effectiveness when approaching a potential employer. Whether or not you decide to work with a recruiting professional be sure to put together marketing materials (resume, cover letter, biography etc.) that effectively showcase your strengths and talents as they relate to the particular position you are applying to.
Be Persistent. The job process can be a long and challenging one, but your commitment to the search and implementation of your job search plan will give you the best chances to ensure a successful outcome.
Job loss can be a very emotionally traumatic experience. In fact, it ranks among the highest of all stress-causing situations. However, rather than looking at a job loss as a horrible thing, you should focus on its positive aspects. Remember, this might be an opportunity for you to find a more rewarding position. Be open to opportunities. You never know what doors this turn of events may open for you.
GC Compensation in 2011
Cash is King
While 2011 has been far cry from an economic recovery; chief legal officers have done pretty well for themselves, even making some modest gains according to the annual compensation survey conducted by Corporate Counsel. What is remaining steady is cold hard cash, in the form of base, and nonequity incentive compensation, which is tied to corporate performance goals. Gone are the bonuses GC’s got for just being there and performing well. What is out? Stock options continue to fall out of favor.
Women On Top
Who has gotten the biggest paycheck this year? The top prize goes to a woman for the first time since Corporate Counsel started this survey, in 1994. Denise Keane, the top legal officer since 2007 at tobacco giant Altria Group, Inc., took home $6.5 million in total cash compensation. She is a not alone, in-house woman counsels are for the most part continuing to make steady progress in terms of compensation.
Company Performance Dictates
GC compensation is based on 2 sets of requirements: individual performance and company performance. The success of in-house counsels is directly tied to that of the company they serve. Therefore, they really have to contribute to the bottom line if they want to improve their own take home pay. Choice of company and industry has never been more crucial for on-house counsels looking to make a transition. The top performers in this year’s list tend to be clustered in the tobacco, oil, and entertainment industries.
The Top 10 Money Makers
1. Denise Keane – Altria Group, Inc. (Total cash: $6.4M)
2. Donald De Brier – Occidental Petroleum Corporation (Total cash: $5.9M)
3. Russel Deyo – Johnson & Johnson (Total cash: $4.9M)
4. Thomas McCoy – Advances Microdevices, Inc. (Total cash: $4.6M)
5. Louis Briskman – CBS Corporation (Total cash: $4.2M)
6. Paul Capuccio – Time Warner (Total cash: $4.2M)
7. Alan Braveman – Walt Disney Company (Total cash: $4.1M)
8. David Bernick – Philip Morris International, Inc. (Total cash: $3.6M)
9. Michael Fricklas – Viacom Inc. (Total cash: $3.0M)
10. Alan Schnitzer – The Traveler’s Companies, Inc. (Total cash: $2.8M)
To see a complete list of the Top 100 Best Paid GC’s, click here.
China’s Best In-House Legal Deparment: Eastern China Airlines
Established in 2009 with a legal staff of 22, Eastern China Airlines’ in-house legal department was awarded “Chinese Company In-house Team of the Year” at the 2010 ALB China Law Awards. This is quite an accomplishment for such a new legal department, especially considering the turbulent global aviation market. Eastern China Airlines Corporation Limited is the country’s top-three carrier listed on the Shanghai, Hong Kong and New York Stock Exchanges.
What’s made the difference?
General Manager, Lijun Guo, who joined the company in 1994, has had a lot to do with it. “The legal department is now regarded as critical as [the] finance and audit departments in our company. It’s a cost-effective and expert resource for all the company’s legal affairs. Its influence is on the rise in every stage and aspect of the company’s operations,” he says. His efforts in recruiting and taking more responsibilities to increase the legal department's profile within the company can be credited for much of its success.
What have been some of the highlights?
Raising RMB$14bn through A-share and H-share equity placements, the absorption of Shanghai Airlines via share swap – a high-profile and complex transaction involving RMB$16bn asset acquisition, over 50 aircraft transactions with a total value of US$10bn, the negotiation and preparation of the company’s merger with SkyTeam, compiling a comprehensive anti-trust and competition, and creating compliance manual for all of its employees, providing key information on antitrust and competition laws in major jurisdictions, including US, Europe, Japan, China and Australia. Not bad in less than two years with a relatively small legal staff.
How did that success evolve over time?
The airline’s expansion and adverse market conditions triggered a substantial increase in legal needs. As a result, the company increased its legal staff, and soon realized it capacity to handle major transactions, and ability to cut down cost by reducing its reliance on outside counsel.
Sounds familiar?
While Chinese companies have traditionally relied on outside counsel to handle their legal needs, more and more are turning to in-house counsels to do the job, and growing their legal departments to handle increasing legal demands. This is a trend that is very likely to continue.
Hot Summer and Cool Legal Job Market
While we may be experiencing a sizzling hot summer this year, the same can’t be said about the job market. What’s it like out there? Clearly, we are not out of the woods, and may even be scaling back. With the headline unemployment rate ticking back up to 9.1 percent in May, the sense of alarm over the state of the economy is once again growing. And it's not helped by a slew of recent reports on everything from the continued high rate of foreclosures to the precarious position of the Greek debt crisis. Things are still incredibly tough in the job market with layoffs outnumber hiring announcements by a sizeable margin.
Where does legal stack up in this declining employment market?
The legal sector lost 2,600 jobs in June 2011 according to the U.S. Bureau of Labor Statistics report; making it the fourth consecutive month this year the industry has seen declining job prospects. Who is affected? Pretty much everyone in the legal sector: lawyers, paralegals, notaries, and the support staff needed to run law firms, such as secretaries and accountants according to the Wall Street Journal Blog. The fall in legal jobs this past month – the biggest decline so far this year – came on the heels of a hint of recovery in May, during which 200 jobs were added, according to the BLS report.
How is this decline impacting unemployed lawyers?
The Great Recession eliminated thousand of lawyer jobs, which never quite returned. This has left a huge hole in the marketplace, with thousands of well-qualified attorney still looking for employment – many hitting the 2-year mark. And there is no visible change on the horizon.
The long line of the unemployed is not comprised of lawyers that are unqualified or not well credentialed. This candidate pool, for the most part, is made up of experienced attorneys with more than 10 year of experience, who have had a solid record of employment, until the Great Recession. The majority never bounced back simply because the jobs never returned.
The change was profound in the legal industry, as both law firms and corporate legal departments have adjusted to doing “more with less.” How does this work? Those that survived layoffs are working more, and firms and corporate legal departments are spending less by not hiring. If firms and corporate legal departments are hiring, it’s most often for part-time and contract positions – and the competition for these jobs remains fierce.
What about the in-house legal market?
Companies, for the most part, are not hiring. Companies that are hiring lawyers are generally looking for general counsel-level candidates to take the legal work in-house and reduce outside counsel spending. They are looking for a "one man shop" to take on as much as possible in-house and curb legal spending. They are also hiring part-time and contract lawyers to fill in the gaps, and increasing their outsourcing whenever possible. In other words, they are hiring as a cost-saving measure.
The Stigma of Being “Laid Off”
Q: Why is there such a stigma attached to lawyers being "laid off”?
Professionals in a number of industries are laid off and re-employed all the time, without missing a beat. Yet, when it comes to lawyers, it seems as if employers think of you as “defective” when you’re unemployed, even if the layoff was not performance-related. In the in-house world, companies often get acquired, go out of business, or reduce costs by laying off legal. It’s not unusual to find yourself out of a job, so why the stigma? I think I've shown more talent and moxie than many of my peers that are currently employed. Yet, employers seem more reticent to consider someone without a current job, than someone with one. Please explain. Frustrated Laid Off Lawyer
A. Dear Frustrated Laid Off Lawyer:
There is a big difference between leaving a company because the company was bought or went out of business, than having to leave a company because you were fired. For the most part, when a company is purchased or going south, you have some time to see things coming, and employers assume that if you have this much “talent and moxie,” you'll have another job already lined up before your head comes to the chopping block.
“A star is a star is a star.” That’s the common line of thinking by many legal employers. They see it as the bottom line no matter how rough the economy may be, no matter how bad the company's financial straits may have become, there is always work for the stars. Please do not misinterpret what I just said. I do not happen to think that someone who has been laid off cannot be an outstanding lawyer. There are legal employers out there that can make the distinction and who understand why someone may have been laid off. Clearly, there are situations where even a superstar must be let go. That said, many legal employers think that if a lawyer has been laid off, he or she was not indispensable. Of course, this is even worst if the company retained any of its lawyers, and only laid off a few.
Because usually the superstar is not the one that is being asked to leave, being laid off ends up having a negative connotation attached to it. Of course, being fired is, without a doubt, is the worst thing that can happen in this context but unfortunately, being laid off is only a bit better. Generally what helps to soften the stigma is when the layoff was made public, the acquisition or bankruptcy was well publicized, and none of the lawyers survived. However, things are not always that transparent, and employers in a market where there are more candidates that jobs, are not always willing to look into the reasons behind a layoff. It is for all of these reasons that there is a stigma attached to someone who has been terminated due to a layoff.
You have signed your name as "Frustrated." Don’t let your status slow down your job search. Update your resume and continue to make yourself available to the job market. If you are a good lawyer, there are still plenty of legal employers that will be willing to consider your candidacy, laid off or not. That said, next time don't wait for trouble to strike. If you have any reason to suspect that you might be a victim of a layoff, take action to look for your next job. You may have to jump ship sooner than you’d like. Don't wait until you have that "stigma" attached to your candidacy.
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