INHOUSE INSIDER Forum, News, and Career Center for In-House Counsels

29Dec/081

Using the Internet in Your Job Search

This holiday season has not been kind. If you’re one of the hundreds of attorneys given notice by your employer because of downsizing or so called “performance issue,” you may need some help in your quest for a new job. Most of you may be thinking of reaching out to the Internet. And you may have the right idea. According to Job Searching Online for Dummies by Pam Dixon, 17,000 new jobs are posted online each week and employers and recruiters use the Web to make 48% of all hires.
So, how do you use the Internet in your job search?

First, be sure to use the Internet as a supplement to your networking. While the Web may account for 48% of all hires, the majority of hires 52% are made outside of the Web. A common mistake for job seekers is to rush to the computer, surf the Internet, and forego networking altogether. While using the Internet may seem like a simple and relatively effortless solution – it is no substitute for networking. So while you are surfing the Web, make sure to also get in touch with your contacts and expand your existing networks (i.e. meet with people in your field, reach out to recruiters etc.).

Second, do not spend all of your time on the Internet. It’s easy to spend eight hours on the computer, aimlessly searching for jobs, and coming up empty handed. If you are going to be using this powerful tool, the key is to put together a game plan that includes a list of sites you will be searching, and determining in advance how much time you will be dedicating each day to this task. It is important to work within a structure and to keep focused.

Finally, be ready for silent rejection. Don't assume that you will receive a response, positive or negative, to every resume you send. In fact, you should assume the opposite. Why? Because the companies and people to whom you are sending your resume have to contend with a deluge of resumes and may not have either the time or the manpower to respond to every applicant. For example, at ESQ Recruiting, we receive an average of 300+ resumes per open position, when you consider that we have over a dozen positions available at any one time, we are looking at thousands of resumes that we have to respond to. Although we respond to every single applicant, many companies do not, and you may find yourself sending hundreds of resumes without ever receiving a single response.

The good news is that the Internet can be a very valuable and powerful tool in your job search. The key is to identify what will work for you. So let’s get started.

JOB LISTINGS

Many job site services are very useful. Some are not, and a few should be avoided altogether. So, where do you start? Most people start with the large super job sites, like www.monster.com and www.careerbuilder.com. While these large sites may not yield as many opportunities as other sites specialized in your field or practice, you cannot and should not ignore the big sites, particularly if want to work for a large employer.

However, there are many more resources for your job search now than just the big sites. The best sites for you are those specialized in legal positions; they include:

ABA, http://www.abanet.org/careercounsel/jobs.html, job boards, information on networking opportunities, internships, other resources offered by the American Bar Association.

AttorneyJobs, http://www.attorneyjobs.com, is the Web site of the print monthly. The print version claims more than 500 listings each issue. The Web site offers only a dozen samples from the current issue.

ACC, http://www.jobs.acca.com, the Association of Corporate Counsel provides jobs listings by employers and recruiters for in-house attorney positions only.

Bench & Bar of Minnesota, http://www.mnbar.org/bbclass.htm, the Minnesota State Bar Association’s monthly magazine, publishes its classifieds on the Web. A recent visit found nearly 5 ads for positions in Minnesota and Wisconsin.

CalLaw, http://www.callaw.com/classified/lawad.shtml, has legal classifieds taken from The Recorder, a daily legal newspaper in San Francisco. Ads are organized by location in the San Francisco area and are updated daily. Some include links to the advertiser’s Website.

Hieros Gamos Employment Center, http://www.hg.org/employment.html, permits employers to advertise legal positions free and include links to their home pages. Job seekers can search listings by type of position, location and practice area. Job seekers also can list their employment interests in HG’s database, after which they will be notified by e-mail whenever a position in their area of interest is posted.

InHouse Blog, http://jobs.inhouseblog.com, InHouse Blog provides news and jobs for in-house counsels, some overlap with the ACC website, but some are unique to the Blog.

Law Bulletin Publishing Company, http://www.lawbulletin.com, publisher of the Chicago Daily Law Bulletin and Chicago Lawyer, has classified ads for lawyer and law-related employment. Listings are extensive and current. If you are looking for a job in the Chicago area, start here.

LawJobs.com, http://lawjobs.careers.adicio.com/careers/jobsearch/results, allows job seekers to post resumes, review job databases and search for employers and recruiters. It also contains news features, links to surveys, and salary information.

Law Match, http://www.lawmatch.com, lawmatch offers free and fee-based services that match your employment profile to on-line classified ads for attorneys, law students, paralegals and other legal professionals, including full-time, part-time or contract opportunities.

LawInfo.com Career Center, http://careers.lawinfo.com, is three services in one: a job listing service for employers, a resume bank for job seekers, and a resume creator for anyone who needs it.

Lawyers Weekly, www.lawyersweeklyjobs.com, publishes a national and seven state newspapers, all of which contain employment classifieds. Unfortunately, only its Massachusetts job ads are available online. Ads are as they appear in print and do not provide for responding electronically. Also at the site is the New Lawyer Survival Guide, a collection of articles from Lawyers Weekly USA.

Mylawjob.com, http://www.mylawjob.com, Mylawjob.com offers a job database of almost 3,000 legal jobs.

AHLA, http://archive.healthlawyers.org/crm_queries/career/main.cfm, lists positions in health law. Employers pay $350 to list here. Listings appear in summary form, with location, title and posting date. Links lead to complete job descriptions and contact information. A recent visit showed 9 listings.

Public Service JobNet, https://cgi2.www.law.umich.edu/_JobNet/main.asp, from the University of Michigan Law School, lists public service jobs from throughout the nation. Listings can be viewed by job title or date, or searched by location, practice area, job type or eligibility criteria.

San Diego Daily Transcript, http://www.sddt.com/classifieds, a legal and commercial newspaper, posts its employment classifieds on the Web. Ads cannot be searched, but are viewed by scrolling through the pages.

Simply Hired, http://www.simplyhired.com/job-search, a job search engine with 6 million legal and non-legal job listings and thousands of jobs sites.

Simplylawjobs.com, http://www.simplylawjobs.com, maintains an employment database of over 10,000 legal jobs in the United Kingdom and other countries.

U.S. Courts, http://www.uscourts.gov/employment.html, for individuals seeking a job within the judiciary, U.S. Courts maintains a list of employment opportunities in the federal judiciary.

U.S. Dept. of Justice, http://www.usdoj.gov/careers/oapm/index.html, lists its available attorney positions. A summary lists titles, location and closing dates, with hypertext links to complete job descriptions and application information.

WisBar, http://www.wisbar.org, the Web site of the Wisconsin Bar Association, posts job listings from two sources: Marquette Law School’s Career Planning Office and its own monthly magazine, Wisconsin Lawyer. Some ads include links to the employer’s e-mail or Web site.

[This is list is by no means exhaustive. If you know of other reputable non-recruiter affiliated legal job sites, please share them with us.]

JOB LISTING (Paid By Applicants)

Job postings are a primary source of revenue for most job sites. Therefore, it is not unusual for most job boards and job websites to charge a premium to employers and recruiters who post jobs. In fact, that typically indicates that the job site in question is getting a lot of traffic, and that the jobs posted are relevant, as employers and/or recruiters would not pay to advertise jobs that they were not actually recruiting for.

Job sites that require applicants to pay to search their job listings on the other hand should be viewed more cautiously. Why? Because unlike job sites that require employers and/or recruiters to pay to list their jobs, here any and all jobs can be posted without any insurance that the job is either valid, exists, active, or posted by the actual employer or recruiter. In other words, there is no quality control regarding the jobs being posted since it is free and anyone can post anything at anytime. So buyers beware!

Some subscriber-paid job sites are reliable, while others are simply running scams.

EmplawyerNet, http://www.emplawyernet.com, claims to be the largest online legal jobs database, boasting more than 3,000 listings. Employers can post ads free, but job seekers must pay a monthly subscription of $14.95 a month or $125 per year. Subscribers can search ads by location, practice setting or area of expertise. They can also list their own credentials and resumes for employers to retrieve. EmplawyerNet has been around since 1996, and according to our research it appears to be a reputable business with a good reputation.

LawCrossing, http://www.lawcrossing.com, on the other hand, is one company you should avoid. LawCrossing claims to be the #1 Legal Job Board in America with over 100,000 jobs. It has a sleek website, a huge job bank, and for all intents and purposes appears to be a reputable business. It is deceiving.

Here's the catch. According to the Better Business Bureau, LawCrossing.com based in Pasadena, CA, posts job listings for the legal profession on its website. At least some of those who sign up and pay monthly to access the listings find no jobs, no accurate listings, no way out of their subscription, and certainly no way to make the company live up to its double-your-money-back guarantee. Even lawyers can't get a refund, everyone's patience is on trial, and complainants undoubtedly conclude that they've been double-crossed by LawCrossing.

LawCrossing.com, according to at least one of the BBB's 29 complaints on file, sends out emails soliciting recipients to subscribe to their website. If you sign up, their website promises you "unlimited access to the world's largest, most advanced, most exclusive legal job resource!" Their database is supposed to list entry-level jobs as well as jobs for attorneys, paralegals, summer associates (paid and volunteer), general counsel, and clerks. They claim it is updated hourly with "thousands of new job openings each week." The cost? "$29.95/month. Cancel anytime."

The reasons customers want refunds from LawCrossing vary, but the main problem with LawCrossing come from their job postings. The company scours the Internet though spiders picks up jobs anywhere and everywhere, without checking whether the position is real, active, and most importantly without checking to make sure that it is listed with the proper contact. LawCrossing also recycles its postings to make it appear as if lots of jobs are being added daily. How good is a job listing if you are not sending your resume to the person in charge of recruiting and/or hiring for the position or if the job is no longer active?

One complainant, seeking a position as an attorney, says she applied to countless listings. She alleges that in more than a third of her applications, the "supposed employer" contacted her to say that the described job did not exist, they didn't know how she'd gotten their contact information, or that their ad had not been approved to appear on a public website. She says she paid not only the subscription fee, but also postage, handling, and resume costs as well for "20 or 30 jobs that didn't even exist." This is only the tip of the iceberg, unauthorized charges, misrepresentations, refusing to provide refunds, are some of the many illicit business practices of this company. It is not surprising that the BBB not only gave LawCrossing an "F" rating, but also dedicated a special article to list its numerous complaints and unethical business practices.

RESUME DISTRIBUTION SERVICES

You may be at a stage of your job search where you want to conduct an aggressive search and contact a large number of potential employers. For a fee paid by you, distribution services will send your resume and cover letter to thousands of recruiters, headhunters, and potential employers. Sounds great doesn’t it? You know what they say about things that sound too good to be true. Well, this is no exception.

There are many reasons not to use resume distribution services. First, you really have no idea who will receive your resume or what they will do with it, and you have no way of recovering it when your search is over! It takes time and effort, but you should be customizing your resume to fit the opportunity and/or the employer. The most effective way to apply for a job is with a customized resume and cover letter sent directly to an authenticated hiring contact, rather than a service that spams hundreds of identical cookie cutter resumes and cover letters to random persons within an organization.

One of the biggest legal resume distribution companies of its kind is Legal Authority, http://www.legalauthority.com. It promises access to more than 750,000 employers—the largest database of legal employers anywhere. Its website draws you in by claiming that it can provide you with direct access “to any legal employer anywhere, including law firms, corporations, judges, public interest organizations, and many more.” It goes on to promise “10 or more job offers.” This is exactly the type of company you should steer clear of.

Although in the last couple months, Legal Authority has raised its rating at the Better Business Bureau from an "F" to a "C” the company’s business model remains basically the same. Legal Authority prepares resumes and cover letters, provides a list of potential employers, and either mails or sends you a completed package to be mailed to these prospective employers.

Legal Authority claims to be able to provide you with a large list of potential employers and contacts to receive your resume and cover letter. Of course, they do not specify whether the potential employer they are recommending to you is actually hiring - which in most cases it isn't. While Legal Authority can provide you with an impressive list of potential employers, it does not guarantee the accuracy of its information. In other words, the information you are paying for may be completely useless. The fact that your resume is being sent to AT&T is meaningless if it is simply mailed to Jane Doe at the corporate office address, and Jane Doe is not the hiring contact at AT&T, or does not work at AT&T. You just purchased a one-way ticket to the trash bin, or at best to a binder of received resumes that will never see the light of day again.

When you are paying a company like Legal Authority to provide you with 150 contacts, the assumption is that all 150 contacts will be accurate, and that your resume will be delivered to the correct hiring authority. In the case of Legal Authority you are simply hoping that some of these contacts will be correct. At best, you will assume that they are, since once your letter is sent it is unlikely that you will receive a response indicating that your resume was misdirected. This is also one of the reasons these packages are sent via mail rather than email. When an email address is incorrect you will at least receive an automatic error message. Moreover, if the email is addressed to the wrong person, you have a better chance to receive an email from that person informing you of the same. In other words, email provides you with a better opportunity to gauge the accuracy or inaccuracy of the contacts.

Legal Authority uses the same unauthenticated data that is used by Law Crossing – they are run by the same individual and share the same database information. A team located in India searches various websites through spiders to compile the information that Legal Authority uses. Legal Authority cannot ensure that the letters sent will be addressed to the correct hiring contact within that office, despite their claims. Why? Because these “hiring contacts” are never checked for accuracy. In fact, Legal Authority even instructs its customers to check all information before sending out any letters. In other words, the service Legal Authority claims to be providing is unreliable at best.

RESUME POSTINGS

Most job sites offer job applicant the opportunity to post their resume into the job site's resume/applicant database. Typically, this allows employers and/or recruiters to access the database and search for applicants that match their hiring requirements.

The key to determining which of these resume/applicant databases to choose from is confidentiality. Who will have access to your resume? If this is a job site that allows both potential employers and recruiters to view your resume, you should be provided with an option to conceal your identity. If this is a recruiter’s database, you need to read their privacy policy carefully, and make sure that your resume is not being shared or distributed without your prior expressed approval.

Of course, the key to resume posting is to "market" yourself, and have your resume included in the applicant database for employers or recruiters to search, evaluate, and be able to contact you. If you are not including a name, contact information, or relevant employment information such as your employer, you may be passed over for other applicants. It's a trade-off between privacy and marketing yourself. At the end of the day, the decision has to be your, but if you want to make full use of what a resume posting/database has to offer, you need to carefully review the confidentiality policy of the site and provide all relevant information.

E-MAIL AGENTS

One of the challenges of conducting an Internet search is the amount of time you will need to dedicate searching each sites. Fortunately, many sites offer an e-mail service called email agents, to keep you informed about new jobs added to their jobs database without you having to conduct a manual search daily. This feature allows you to receive email alerts on a daily or weekly basis of new positions that are relevant to your specific job search.

When an appropriate job appears in their database of jobs, an e-mail will be sent to you to inform you of the addition, and/or the actual description of the new job will be emailed to you as well. This can save you considerable time and effort. Many sites offer you the ability to create several different agents so that you can try different combinations of search criteria, e.g. different key words, different locations, etc.

Once you have created an email agent for a particular site, you don't have to keep visiting the site to see if they have jobs for you. It's usually a good idea to sign up for the service if you can do it without compromising your privacy, as a means to save you a lot of time and keep you on top of new jobs.

CONCLUSION

The Internet can be a powerful tool to use in your job search. As you can see, employers and recruiters are making good use of the Internet and so should you. The key to a successful Internet job search is be informed with respect to the services and sites to use, to continue to network, to invest your time wisely, and not take rejection or the lack of responses personally. Remember, all you need is one positive response.

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19Dec/080

Are GCs Ready to Pay Wholesale Rather Than Retail?

Law firms increased billing rates for both partners and associates by an average 4.3 percent in 2008, and according to a Wachovia survey, firms are expected to increase billing rates in 2009 as well. When you consider that companies are paying between $500 to $1200 per hour for partners, and $450 to $820 per hour for associates at the nation’s top 250 law firms – you have to wonder how long GC's will continue to absorb these rates.

In the face of this economic downturn, are GCs ready to pay wholesale rather than retail for legal services? Companies will be under pressure to control costs in 2009, and according to a 2008 Altman Weil survey of chief legal officers, GCs are planning to decrease their use of outside firms, which will translate into more work in-house.

While bringing more work in-house has proven to be cost-efficient for companies, the majority of GC’s seem nevertheless reluctant to hire additional in-house counsels. Doing more with less appears to be the preferred approach. However, the majority of in-house legal departments are already thinly staffed (declining from 4.2 to 4.7 lawyers per billion dollars of U.S. revenues to 3.8). An onslaught of legal work may not only create inefficiencies, but also expose companies to a myriad of problems associated with understaffing. Moreover, companies' reliance on outside counsels will not be substantially reduced if in-house legal departments are ill equipped to handle the increased workload.

If companies are considering growing their in-house legal ranks in 2009, questions regarding how many, when, and how remain. Most surveys and reports provide conflicting results as to the number of companies planning to hire in-house counsels in the coming year. Throughout May and June, Altman Weil surveyed chief legal officers and one of the questions was about hiring new attorneys in the next 12 months. At that time, 49% percent said they were looking to bring on new attorneys. However, during a flash survey conducted by Altman & Weil on department cost control in November, only 25 percent said they would add new attorneys.

Why more companies are not adopting the basic cost-benefit approach of hiring more lawyers in-house is disconcerting. Management may be understandably reluctant to outlay the financial resources to recruit and hire more attorneys in time of budgetary constraints, but adding in-house lawyers is cheaper in the long run than paying increasingly rising outside attorney fees.

Companies can hire experienced in-house lawyers for an average of $150,000 to $200,000 per year – that’s 236-314 hours for the use of a law firm associate on average, or 176-235 hours for the use of a law firm partner on average. Assuming your in-house counsel works 50-hours a week, the hourly cost of your in-house counsel comes to about $57 per hour (compared to an average of $635 for a law firm associate, or $850 for a law firm partner). Your in-house counsel can also provide your company with an average of 2600 hours of legal services per year, or about ten times what your outside counsel can provide for the same amount of money. You do the math; the savings are considerable.

In addition to the compelling cost-analysis argument for hiring more in-house lawyers, the addition of in-house counsels can provide companies with other added benefits. In-house counsels typically understand a company’s business and overall strategy better than outside counsels who are one step removed from the decision makers. As a result, they understand the context of the legal issues that affects their companies and can provide more value in their abilities to formulate solutions and choose courses of actions that are designed to further company goals. In-house counsels retain institutional knowledge and are invested in their company’s success. They are typically better suited to provide the kind of legal advice that will assist a company meet its business objective in the most cost-effective and efficient manner.

Can companies completely do away with outside counsels? Not likely. In certain instances, companies are still better off relying on law firms. Companies should continue to turn outside counsels in highly specialized practice areas or with respect to substantial litigation matters (i.e. high-stakes, bet-the-company patent matters, or IP litigation). Most legal departments, including the largest ones, generally do not have the capacity or the infrastructure to handle either large-scale litigation or large M&A matters completely on their own. This too could change in the future, but for now, companies should continue to seek the assistance of law firms with respect to these matters on negotiated rates.

The cost-benefit analysis is clear: hiring more in-house lawyers means considerable savings on legal expenses. Can your current legal department handle more work with fewer resources? GC’s and management need to be realistic about what an increase in the quantity of work will mean in terms of quality. Moreover, there has never been a better time for companies to hire attorneys – legal positions are scarce, law firms are shedding associates and non-equity partners, bonuses are down and salaries are flat. Making an investment now in the company’s legal department may be one of the smartest moves to be made.

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17Dec/080

ESQ Resume: Attorney Resume Specialists

In today's competitive legal job market, a well-written resume may be the single most important factor in getting your foot in the door and on your way to landing the perfect position.

As the economic downturn continues, more legal job seekers are vying for fewer positions — and everyone is feeling the squeeze. Attorneys are looking for ways to make their resumes and cover letters stand out, but few know how to create a truly outstanding presentation.

ESQ Resume was created to assist attorneys at all levels – from law students to experienced attorneys – create job-winning resumes and cover letters that deliver results.

ESQ Resume provides one-on-one personalized services to create resumes and cover letters that command attention and set them apart from the competition.

ESQ Resume works with you to create resumes and cover letters that effectively showcases your qualifications, accomplishments, experience, special skills and education in a hard-hitting and compact presentation to convince the most selective employers that you're the right candidate for the job.

Take a look at ESQ Resume’s sample resumes and client testimonials at www.esqresume.com, and see why ESQ Resume is the leading attorney resume-writing firm in the United States.

[ESQ Resume is an affiliate of ESQ Recruiting.]

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15Dec/080

Should You Pursue an LL.M.?

Lost jobs in the legal sector are part of record-breaking losses felt by industries almost across the board. At the last tally, some 7,300 attorneys nationwide had gotten the ax since June 2008, with more layoffs expected before the end of the year (New York Law Journal). The number of people working in legal services dropped by nearly 12,000 in the last year (U.S. Department of Labor). In the last month alone, losses were reported at 2,200.

The in-house numbers are not any better. During a November survey conducted by Altman & Weil, only 25 percent of chief legal officers said they would add new attorneys. The list of law firms that have publicly laid off attorneys has swelled to 47, and growing. The job market is not only contracting, but most analysts agree that the bottom is still to come. The majority of CFOs do not expect the economy to recover until late 2009. That’s nearly a full year of a downward cycle for most job applicants.

To find a job right now is going to take a great deal of mental fortitude and a willingness to consider nontraditional options, including going back to school. Perhaps this might be the right time to consider pursuing an LL.M.

For law students about to graduate, staying in school an additional year to pursue an LL.M. may be the right decision. For many law students facing a difficult job market, the benefits of pursuing an LL.M. can outweigh the costs:

  • The most obvious benefit of pursuing an LL.M.is to be able to stay out of the job market until the economy begins to recover. Hopefully, this will translate into more jobs available for law school students once they graduate from the program.
  • Another benefit is the pursuit of an academic career over the practice of law, for which an LL.M. degree is usually the first step.
  • Finally, the LL.M. can provide students with the type of specialization that certain practices, such as tax, require for most of their experienced practitioners. This can help a potential candidate meet the minimum job requirements for certain specialized legal positions.

For attorneys looking for work, going back to school to pursue an LL.M. can be the right alternative. Pursuing an LL.M. can provide benefits beyond the degree itself.

  • The most obvious benefit is to be able to ride out the recession until the economy recovers. Most importantly, going back to school can fill a long unemployment gap on a resume - which is often viewed negatively by prospective employers, and can become a hurdle when applying for jobs.
  • Another benefit of pursuing an LL.M. is to retool legal skills to practice in a field of law outside one’s existing practice. This is most often beneficial for litigators who are looking to break into a transactional practice.
  • Finally, the LL.M. can provide practicing attorneys with additional depth and expertise in their existing fields, which can in turn enhance their overall candidacy for potential positions, especially in specialized practices such as tax or intellectual property.

Finally, one of the most significant benefits of participating in an LL.M. program, for both students and practicing attorneys, is the opportunity to network with other attorneys within a particular field. Networking is the most effective method of landing a job, and to be able to connect into a network of practitioners in your legal area of interest can greatly add to your job prospects and overall career development. Making new connections, establishing relationships, and getting yourself noticed in a segment of the legal community - whether you are seeking a job now, later, or simply looking to redirect your career - can be invaluable.

Obtaining an LL.M. alone will not necessarily help you land a job. It may help you to meet the minimum requirements of certain positions, allow you to pursue positions in other fields of practice, or pursue a career in academia. However, the true value of the LL.M. comes from what to do with it. Whether you are looking to ride out the storm, retool your practice, or reevaluate your career, the key is to take everything the program has to offer, including the extensive networking opportunity, and use it to formulate a plan of action with respect to your career.

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12Dec/080

Inside Counsel’s Blog Review of InHouse Insider

InHouse Insider is honored to report that it was featured in the November 2008 issue of Inside Counsel’s Blog Review. InHouse Insider has always considered Inside Counsel to be a preeminent news source for in-house counsels, and was delighted to be included in their magazine.

People say you can find anything on the Internet for any niche imaginable. General counsel are no exception.

Created by two executives of an in-house attorney recruiting firm, Inhouse Insider provides weekly updates on all things a member of a legal department would want to know. From discussing general counsel salaries in the context of the currently shaky economy to analyzing the "causes of mid-career crises in attorneys who have hit the proverbial fork in the road," the blog culls much of its content from newspapers, surveys and legal journals. But about half the posts are original essays on topics such as the growing in-house market in China.

Vanessa Vidal, founder and president of ESQ Recruiting, and Leslie White, a managing director at the company, update the blog each week. "What we wanted to do was share [our expertise] with not only our clients and candidates but with everyone and anyone interested in the in-house legal market," Vidal says. Without unnecessary fluff, Vidal and White keep readers abreast of statistics and industry trends. But it's not all serious. In August, the bloggers posted a roundup of the top 25 legal movies, which highlighted To Kill a Mockingbird and the comedy classic My Cousin Vinny.

-Christopher Danzig
Inside Counsel
Blog Review
November 2008

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10Dec/080

2009 Predictions for In-House Legal Departments

Nearly 75 percent of general counsels responding to a November survey by legal consultants Altman Weil said their legal departments are facing budget cuts averaging 11.5 percent next year.

What will their cost-saving strategies look like?
  • 65% said they would bring more legal work in-house.
  • 57% of in-house counsel at companies with revenues of at least $1 billion said they plan to reduce their number of outside law firms.
  • 53% said they would give additional work to lower-priced outside lawyers.
  • 50.5% said they would require more outside fee arrangements.
That being said, cost-cutting measures will also be internal and in-house legal departments and the lawyers who work there will also be affected.
  • 31% plan to cut lawyer and administrative staff in 2009.
  • 21% plan to cut paralegal positions in 2009.

The decline of in-house counsels has been slight, but steady. The median company employs 3.8 lawyers per billion dollars of U.S. revenues. In the last four years, the number was greater, ranging from 4.2 to 4.7 lawyers per billion dollars of U.S. revenues.

What about projected in-house counsel hiring?

Before Wall Street’s economic meltdown, during the first quarter of 2008, 32.3% of the nation's chief legal officers and general counsels expected to hire more in-house lawyers within a year, 54.6% did not, and 13.1% weren't sure. These numbers have most likely shifted, with fewer companies looking to hire in-house counsels, but the difference might not be as salient as one would guess.

Throughout May and June, Altman Weil surveyed chief legal officers and one of the questions was about hiring new attorneys in the next 12 months. At that time, nearly 50 percent said they were looking to bring on new attorneys. However, during a flash survey conducted by Altman & Weil on department cost control in November, only 25 percent said they would add new attorneys.

In October of 2008, about a third of in-house counsel responding to a survey by the law firm Fulbright & Jaworski were projecting an increase in legal disputes involving their companies for the coming year—and nearly 20% predicted the need to hire more in-house lawyers to manage the expected increase.

While the hiring projections centered mainly on an increase in litigation – some of the legal areas that will require additional attention from in-house counsels will include compliance, regulatory issues, employment matters, intellectual property, and international transactions.

Although the majority of general counsels will look to do more with fewer attorneys, we predict that about 30% will be look to hire additional in-house counsels to handle the additional work in-house, and reduce their outside counsel expenses.

What about compensation?

In-house lawyers in larger companies made an average of $236,000 in pay and bonuses in 2008, up from $226,000 in 2007. But 2009 levels promise to be on the decline, especially at a time when in-house staffing is softening.

  • 29% plan to cut lawyer compensation.
  • 19% say they will reduce staff compensation.

Of those companies not cutting lawyer compensation, we can expect the majority of salaries to remain at status quo, and a minority to increase by a lower margin (expected 5% increase in 2009, over 8% in 2008, and 10% in 2007).

What about bonuses?

  • 31% plan to reduce lawyer bonuses in 2009.
  • 22% plan to cut staff bonuses in 2009.

What does this mean for in-house lawyers?

At the last tally, some 7,300 attorneys nationwide had gotten the ax since June 2008, with more layoffs expected before the end of the year according to the New York Law Journal, in an article reprinted in New York Lawyer (reg. req.). Fewer companies are planning to hire, in the coming year, and more are looking to reduce legal staffing.

In order to secure their positions, in-house counsels will end up having to work more for less money. They will also work with less support – both in terms of outside counsels and internal administrative assistants and paralegals. Resources will be stretched thin. However, most counsels will look to stay with their current companies, as in-house hiring rates will be down in the coming year, and the competition for fewer positions in the marketplace will be more intense than ever.

While 65% of general counsels said they would bring more legal work in-house, 31% plan to cut lawyer and administrative staff in 2009. In other words, in the current economic climate, in-house counsels may be subject to layoffs. They will need to take proactive steps to avoid receiving a pink slip. In-house counsels will have to do more with less, to show greater flexibility, to take on new and added responsibilities, learn new skills especially in the areas of compliance/regulatory matters, and be able demonstrate their value and cost-saving effectiveness.

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8Dec/080

Amid Layoffs, Firm Closures & Economic Decline, Firms Raised Billable Rates in 2008

According to the National Law Journal, nearly 71 percent of law firms reported an increase in the amount that they charged clients compared with 2007, with White & Case reporting the highest billing rate – $1,260 an hour for its top lawyers.

The NLJ surveyed the nation’s top 250 law firms and received two years of rate information from 109 of them. Law firms responding to the survey increased billing rates for both partners and associates by an average 4.3 percent this year, compared to an average hike last year of 7.7 percent, the story says.

Why did law firms increase their rates during the recessionary economy of 2008? At a time of layoffs, bankruptcies, and economic decline, law firms were going against the grain and increasing their rates. Was it to accommodate growing associate salaries? Not likely, since associates salaries have remained flat since 2007. Were firms looking out for associate bonuses? That’s even more far-fetched, as bonuses are being rolled back to nearly half of what they were in 2007 (with a few exceptions from litigation firms that settled big matters in 2008 and still have plenty of cash to throw around – the likes of Boies, Schiller & Flexner and Quinn Emanuel.)

Could the raises in rates be a reflection of growing overhead? Again, that’s not likely either. Across the country, office lease rates followed a downward trend through the end of 2008; marketing costs in traditional advertising channels declined sharply in 2008; and prices for display ads on the internet have been trending downward since the beginning of this year, dropping 27% overall from last quarter. So what could be causing these billing rate increases? The answer is rather simple: partner compensation and company reliance on outside law firms.

A weakening economy might have been in the news for months now, but the results of the recession did not hit partners' pockets. In fact, on the whole, law firm partners are doing better than they did in 2007 – continuing demand for their skills and rising billable rates may keep that trend going. Law firms will cut just about everything they can before cutting partners' compensation, and companies – despite much publicized gripes about rising billable rates, attempts to negotiate fees, and overall consolidation and reduction of outside counsels being used – companies are still heavily reliant on outside law firm services, paying between $500 to $1200 per hour for partners, and $450 to $820 per hour for associates at the nation’s top 250 law firms.

Will law firms sustain these ongoing billable rate increases through 2009? According to a Wachovia survey, firms are expected to increase billing rates in 2009, but at a fraction of the increases instituted for 2008. Firms are increasing rates 5 percent on average. The median rate increase is 4 percent, lower than 2008, which saw increases of 6.5 to 7 percent, but still sizeable considering the economic climate.

Can anything be done to curtail these rising rates? That depends on the actions of companies across the country. Should the economy continue its current course, companies could be looking to hire more attorneys in-house, rely more heavily on "flexible staffing" such as contract attorneys, and attempt to negotiate better deals on legal services. Unless clients send a clear and cohesive message by undertaking these various actions, law firm rates will most likely continue to increase, despite a declining economy.

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