Based on their legal budgets, respondents anticipated that their outside counsel spending growth rate would slow to 3.1 percent through the end of 2008 and into 2009, compared with a 10.3 percent growth rate in 2007. The slowdown is "almost shocking," according to one consultant.
Many Boston-area technology companies are also at a stage of their corporate development where they're more concerned about M&A and initial public offerings than "any fight to the death litigation such as the one between Broadcom Corp. and Qualcomm Inc."
Bottom line: Litigation is expensive, and where companies can do without, or can take a less aggressive position, they are saving significant money on outside counsel fees. While the slowdown in Boston might be surprising to certain analysts; it far from shocking.
Companies across the country have been consolidating their lists of outside counsels, negotiating fees, taking a less aggressive stance on litigation matters, and bringing more work in-house. Where legal is often perceived as part of overhead in a company, it is the first department to look for cost-cutting measures in difficult economic times. Boston is simply a good example of this new trend.
When all else fails, a law firm is a sure bet. As a former Bear Stearns attorney who has landed at a law firm said: "It's like a port in the storm right now.” How long will these attorneys moor their ships there? Until something better comes along. When the storm clears, it is very unlikely that these new recruits will stay on – in fact, I predict that they will be the first ones out looking for that next in-house job.
Why? Because while law firms can offer them a safe harbor at this time, including temporary job security and cash compensation, they are likely to be missing out on what their in-house practices offered. The return trip to a law firm will prove to be brutal for a number of them. Those who’ve had a taste of the in-house practice are less likely to want to put up with the lack of flexibility, long evenings and weekends, and billable hour requirements.
In addition to the flexibility that was attractive to a number of financial service attorneys who chose to go in-house, many of them also enjoyed the opportunity to work on behalf of one client and become more involved in the business. Those returning to a law firm environment will now have to contend with drafting and reviewing agreements with little exposure to the business process – something that could be a source of frustration.
There will be a number of financial service attorneys looking for work, and a safe place to land, in this volatile market. Obviously, in-house opportunities will be more limited and challenging than ever. Financial services companies and banks are not hiring, and attorneys from Bearn Stearns, Lehman Brothers, and Merrill Lynch who have yet to find a safe harbor are assailing those who have positions available. The competition is stiff to say the least.
So while law firms may provide an immediate solution to Wall Street attorneys – it will most likely be a temporary one. When the market turns, and other opportunities become available, these same attorneys will most likely be the first ones to leave their law firms and return in-house.
As reported by the Recorder, alternative-energy companies are getting to the point where they are looking to go public, or where hiring a general counsel can cut legal costs. This is an exciting industry poised for growth that will generate a number of legal jobs in the future. But will the candidates be available?
There is a shortage of attorneys with the right skills and field experience for these positions. There are but a handful of attorneys in the marketplace with "renewable energy experience." This is true in both the U.S. and abroad - we can support this observation from our own experience conducting GC searches in this industry both domestically and internationally. At the end of the day, most companies usually have to compromise by either selecting an energy attorney, or a start-up company lawyer.
This is a great time and opportunity for law firm attorneys to start looking at the renewable energy field with more interest. Together with health care, energy promises to be a very active and lucrative industry in the years to come. In addition to its prospects for growth, this is a fascinating field that (by my own observations) has attracted some of the brightest and nicest business people and attorneys I have ever had the pleasure to work with.
This is the time to invest your time and - no pun intended - energy into developing expertise in this field. Again, one of the best roads leading to an in-house job is industry experience. You can develop this experience by getting involved in renewable energy projects your firm may already be handling, and/or courting renewable energy companies as clients.
This is a relatively young industry, with up-and-coming companies that can be more easily courted as they begin to emerge. They provide a great opportunity for counsels to get involved in the early stages, cultivate ongoing relationship as they grow, and perhaps become the obvious choice when they are ready to bring in their first in-house counsel.
Don't let this opportunity pass you by - and enjoy the sunny forecast!
How compensation levels for executives like Russo could have been justified in the end is hard to explain. Especially when considering the enormous $4.5M bonus he was paid earlier this year - the third biggest GC bonus in the country!
It's tempting to blame Lehman Chief Executive Dick Fuld, for everything that's gone wrong at Lehman. After all, the man took credit for the firm's successes (while throwing the occasional victim under the bus when there were problems) and got a corporate rock star compensation package.
By Fortune's math, Fuld has realized almost half-a-billion dollars in cash - $489.7 million, to be precise - by cashing in stock options and restricted stock that he was granted. (That's a pretax number.) He's also knocked down wads and wads of regular old money.
While the compensation level of Lehman's top executives had no bearing on its eventual fate, it is illustrative of the level of greed and risk-taking these seemingly bright financiers were willing to take. How could two of the most well compensated CEO's and GC 's in the country account for their extraordinary salaries and bonuses in light of the company’s risky enterprises and shaky financial health?
You have to wonder what Russo was thinking when he accepted his multi-million dollar bonus earlier this year. Obviously, when the dust settles, these two will land safely on their feet - it is the thousands of others caught in this collapse that will have to worry about tomorrow.
Beware of associating GC compensation packages with financial health of a company: it can be deceiving.
Surely, with your pedigree and legal skills, companies will be vying for your candidacy, and you will be able to land a comfortable in-house job at a company in no time. Well, at least that’s what you believed until you began that fateful in-house job search.
Perhaps what you did not completely realize was the competition level you were facing, coupled with the actual number of in-house positions available. You were not the only attorney looking out of that window and circulating that resume for an in-house spot. In fact, 80% of your peers were doing the exact same thing, applying for the same limited number of positions.
The in-house job market is extremely competitive – it is a market with a large candidate pool, and limited opportunities. For every available in-house position, a company will easily receive hundreds of resumes, and take its the time to hire that one perfect superstar. In the process, a number of outstanding attorneys who would be the pride and joy of the most selective law firms in the country, will be left out in the cold, licking their wounds, and looking again for the next opportunity.
The other reality is that in-house jobs may not be as rosy as you may have imagined. Sure, you’ll take a pay cut to reduce your current stress level and polish up those business skills you’ve been so eager to use. But how deep are you willing to go? The sticker price may completely shock you (see our previous Blog “Are You Ready to Go In-House?”).
Most law firm attorneys expect to take a 20-30% cut from their law firm compensation, while the reality is that most law firm attorneys transitioning in-house experience compensation reductions ranging between 50%-70%. The median base salaries for in-house attorneys with 5-10 years of experience ranges between $100,000-$150,000 per year, with bonuses averaging 20%-30% of base. At the end of the day, you may end up making less than that first-year associate you are currently training.
Finally, while you may get a break from your current hectic law firm pace, this will not be a vacation by any stretch of the imagination. In-house lawyers work hard, put in long hours, and are on the front line of business decisions – taking the fall when the company is not doing well, whether or not they had any actual responsibilities for them.
Still ready to make that jump? If I have not scared you away, here are a few things to consider when trying to land that in-house spot:
1. Don’t Try to Fit a Square Peg In a Round Hole.
Now that I’ve told me how few in-house positions there are available, and the number of applicants per job – you may be tempted to try to work the numbers in your favor, and apply to as many positions as possible.
If I had a dollar for every candidate applying for in-house jobs they were clearly not qualified for, I would be enjoying early retirement in the tropics. Remember: companies are looking for an exact fit – not an approximate fit. They are not willing to take a leap of faith, to train you, or consider you simply because you are a good attorney, motivated, with good credentials.
You need to meet every single requirement the position calls for; otherwise, you will be wasting your time. And, be honest with yourself. The fact that you think your skills are transferable, or that you have the capacity to do the job is not enough. You need to be able to check every single item with complete confidence – that’s true about the experience level, industry experience, type of skill required, and incidentals such as language skills or sub-specialties.
2. There Are No Shortcuts Methods – Networking is the First Step.
You need to get the word out, and while you may be worried about confidentiality, it’s a small risk to take in terms of the potential pay off. You need to start going through your professional address book and renew and/or refresh your connections. The best way to cut through the long stack of resumes is to have someone vouch for you, or tell you about a position before it becomes available to the general public. This is a good opportunity for you to start expanding your network and to get involved in your legal/local community.
You can work with a legal search firm as well, but it is by no means a shortcut. It is no substitute for networking. First, you need to do a little homework and reach out to search firms that either specialize in or have a significant part of their practice dedicated to in-house search. Secondly, you need to contact more than one search firm. In-house searches tend to be handled on an exclusive basis – one search firm for one particular position/company; therefore, every search firm has its select list of clients and positions, which may not be representative of all the opportunities available in the marketplace.
Finally, search firms conducting in-house searches are company-oriented. In other words, they are focused on filling the positions for which they have been hired, not on finding jobs for candidates. While you should provide your information to search firms, so they can contact you when they have a position available; you should not expect them to pitch your resumes to companies or create opportunities for you. Companies generally don't want search firms to send on resumes 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 a great candidate, a search firm is typically constrained by the number of companies that have engaged it to conduct searches for them.
3. All Good Things Come To Those Who Wait, and Wait, and Wait…
How long does it take to land an in-house job? Well, it depends on your qualifications, experience, flexibility, and the market in general. That said, for the most part, it takes about six months to a year, for most applicants to land a position. This is not for the faint of heart or impatient. You will have to endure a lot of rejection before landing that coveted in-house position.
Why? Because of one crucial distinction between law firms and companies. While associates and partners are an integral part of the law firm’s “profit centers” and help generate millions of dollars in revenues on behalf of the firm, when they transition in-house, they become “part of the overhead.” In-house counsels, with very few exceptions do not generate revenues. At best, they protect a company from liability. Unlike a law firm that sees the hiring of associates and partners as a means to increase productivity and revenues, companies must determine whether hiring an attorney in-house is cost effective, in both the short and long run. Therefore, companies tend to hire fewer attorneys in light of the work available, and are much more deliberate in their decision to expand their legal department.
The type of position you are seeking will also determine your wait. Corporate legal departments, unlike their law firm counterparts, are triangular. The higher the level, the fewer jobs there are available. Most of the senior-level positions tend to be filled from within, by in-house counsels who have bid their time and are ready to get promoted. So if you are holding off for a more senior-level position within a company, you may have to wait that much longer for the opportunity to become available.
Don’t get discouraged. While the process can be long and difficult, the payoff is worth it. Most lawyers who made the transition with open eyes insist that going in-house was a decision they would make again. Gripes and all, in-house lawyers are nearly unanimous in preferring the more complex path they've chosen.
While, searching for an in-house job may be challenging, keep in mind the tips above to improve your chances of success.
The state with the largest number of female GCs is New York, which has 14, followed by 11 in California, eight in Texas and seven each in Illinois and New Jersey, according to the Fulton County Daily Report.
The MCCA survey, which profiles several of the GCs, is featured in last month's Diversity & the Bar magazine.
Among those profiled are Margaret M. Foran of Sara Lee Corp., Joia M. Johnson of Hanesbrands Inc., Kathleen M. Cronin of CME Group, and Elisa D. Garcia C. of Office Depot, Inc.
"At a time when the U.S. financial markets are taking a beating and the economy is creating difficult times for our nation's top companies, it's encouraging to see that more women lawyers are serving as the chief legal officer to whom CEOs turn to lead the company through today's legal and regulatory challenges," Veta Richardson, MCCA's executive director, tells the Daily Report.