If I had a dollar for every time I heard a law firm associate tell me “I want to go in-house,” I would be enjoying my retirement on a tropical island in the South Pacific. The allure of taking one’s practice in-house is understandable, and in many cases, quite appropriate.The opportunity to take an active role in a client's business decisions, to focus on the growth of one client and one industry, to part with billable hour requirements and business development responsibilities, and operate within a more predictable and sometimes less taxing schedule, are all very compelling reasons to make that transition. But how do you know whether you are ready to make the move in-house?
There is a notable difference in wanting to go in-house and being ready to go in-house. No matter how enticing the opportunity might turn out to be; unless you are truly ready for it, it might not be the successful transition you were hoping for. How do you know whether you are ready? Here are some questions to consider in determining whether you are ready to make that leap in-house:
Do You Have the Experience?
When you consider that 75% of associates leave private practice by their fifth year of practice (NALP 2005), it is not surprising to see a number of junior associates banging on corporate doors to transition in-house. Obviously most in-house job postings will include the minimum level of experience required for the position – but is meeting the minimum requirement enough? Not necessarily.
Companies that hire in-house counsels are looking for attorneys who are self-sufficient, who can work independently, with little support, and almost no supervision. Sounds like an ideal proposition? Yes, but consider the following: this also means that corporate legal departments are not good training grounds either. This is not a place where you will be taught skills, or have much of an opportunity to learn from more senior counsel. It will be assumed that you are already skilled in your practice area, can handle all of the documentation and processes that come with it, can provide strategic advice to your company, and can oversee the legal work of potentially more experienced outside counsels.
In light of what companies expect from their attorneys, it is recommended that you stay in private practice for at least five (5) years before you consider making a transition in-house. While the level of responsibility and training tends to vary on an individual basis, and from firm to firm; this minimum threshold can at least ensure that you have had the opportunity to be exposed to the various documentation and processes of your practice area.
While law firms continue to have a dubious reputation in terms of the quality of their training, they remain the best place for junior attorneys to acquire experience and develop legal skills. Corporate legal departments for the most parts are thinly staffed, and therefore provide you with more limited access to experienced counsels (and sometimes no access whatsoever) to whom you could go for support or advice. And remember, if you are thinking about picking up the phone to call an outside counsel to get advice, it will cost you and your company. Corporate legal departments operate under strict budgets – they do not provide for this type of on-the-job training. Corporate legal departments also tend to work with fewer resources, in terms of libraries, software programs, continuing legal education programs etc. Finally, the work you will be required to handle in-house, will demand that you not only be able to draft, revise, and negotiate or explain the various documents associated with the transaction or litigation matter, but that you take it a step further and advise your client on what strategy and steps they need to take to meet their business objectives.
The longer you stay in private practice, the more valuable you will become to a company, and the more likely you will be able to succeed in-house. The best time to transition your practice in-house is generally between your fifth year and tenth year of practice, or right before partnership. Why before partnership? Because by the time you make it to partnership, you may have become either too expensive, or too dependent on your high compensation package, to be able or ready to absorb the salary cut you will need to take when moving in-house.
Are You Ready for a Salary Cut?
When speaking with attorneys who are ready to make that in-house transition, I invariably hear the same message, “I am ready to take a salary cut for the right opportunity.” They seem candid and honest about their willingness to give up a portion of their law firm compensation to move in-house, and they generally are. However, very few tend to understand just how much of it they will have to give up to make that move. That’s understandable; where law firms make their compensation public knowledge and generally align themselves in terms of their size and geographical locations, corporate legal departments are not only more guarded about their figures, but are also much more unpredictable – as compensation can vary greatly depending on a company’s size, industry, location, and financial situation.
The only in-house figures that seem to gather the attention of the press, and therefore those that are readily available to the general public are the compensation figures of Fortune 500 general counsels. In fact, those figures are typically those of the 100 highest-paid general counsels at Fortune 500 companies. In 2006, the average cash bonus and restricted stock grant received by this group approached $2 million. In addition, more than half of the group cashed in stock options in 2005, with an average gain of $3.1 million. In comparison, the average profit taken home last year by an Am Law 100(R) partner at the nation's 100 top-grossing firms was $1.1 million.
Top earners like Thomas Russo, Lehman Brothers Holdings Inc.'s vice-chairman and chief legal officer, takes home a whopping $21.2 million, with $450,000 in salary, $4.6 million in bonus, and $16 million in stock option cash-ins. Occidental Petroleum Corporation's Donald de Brier received nearly $7.2 million in stock options in fiscal year 2005, while MGM Mirage's Gary Jacobs got a sweet $5.5 million in options.
While not everyone has the grandiose ambition or the profile to become a Fortune 500 general counsel – these figures have a tendency to skew the expectations of attorneys wanting to make the jump from law firms to corporate legal departments. 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.
Most attorneys who hear these figures gripe, “It’s not market.” It’s easy to understand why. The salary wars waged by large law firms around the country increasing first-year associate salaries to $145,000 and $160,000, as well as incremental increases of other classes by as much as $15,000 have done little to provide law firm attorneys with a realistic understanding of their worth in the corporate legal market.
They forget one crucial distinction between the law firm and in-house environment. 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 in the licensing area, 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. The value proposition changes drastically, and therefore, so does the compensation.
The question that each attorney must resolve in his mind, is whether he or she can absorb the cost of transitioning in-house – as for most of them, there will be a significant monetary tradeoff.
Can You Handle The Limited Career Path?
By now, some of those left with the experience and the willingness to make the financial sacrifices may think that it’s just a matter of time before they make their way to a more senior-level position or take the general counsel position. Well, not so fast.
According to a 2005 Survey conducted by Corporate Counsel, nearly seventy-five percent (75%) of in-house counsels polled described overall opportunities for advancement in their departments as either "limited" or nonexistent. Although many of the 1,278 respondents reported that they had been promoted since going in-house, they said that they were unlikely to get much further. Nineteen percent (19%) said there were no opportunities for advancement whatsoever for them in their department, while fifty-six percent (56%) percent said opportunities were limited.
What does it mean for you? If you think that with time you will enjoy promotions including a better title or a significant increase in pay, you may be going in with unrealistic expectations. Most corporate legal departments are small or flat in terms of structure; therefore, title promotions or elevation to other roles tend to be rare. Unlike law firms where you move up class levels every year, and enjoy significant pay raises, when transitioning in-house you may find yourself in the same position for many years to come, with pay raises that average 3-5% a year.
Most in-house counsels bid their times and move up only when a more senior counsel decides to retire or to transition to another company. In fact, the best chance for advancement may be jumping to the legal department of another company. Companies with larger legal departments of fifty or more attorneys, usually have more avenues for advancement. They may have a more hierarchical structure to enable its attorneys to move up to more senior roles with more responsibilities and greater levels of compensation. That said, in-house attorneys don’t have the same clear and linear career path as their law firm counterparts, and opportunities for advancement for the most part are limited. Before you make any decisions, you need to ask yourself whether you are ready to bid your time and live with fewer opportunities for advancement.
Before you start polishing your resume and look for in-house positions, make sure you’ve gained the experience you will need to succeed in-house, that you are able to let go of your attractive law firm compensation package, and can work in an environment where your career path will not be a straight line.
The trade-offs are far from perfect; however, most lawyers who made that 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. How do we know? Only 1 percent of in-house lawyers say they'd like to be at a law firm.
The number of attorneys who are interested in making the transition in-house is increasing, despite current economics. While securing an in-house position has always been difficult because of supply and demand, doing so in this economy is even more challenging. There is a significant distinction between wanting to go in-house and being ready to go in-house – something that many attorneys tend to miss when conducting their job search. In this article, we discuss what it takes to become a strong candidate for an in-house position in today’s marketplace.
The ideal in-house candidate is an experienced attorney with at least five years or more of professional practice experience, who can operate fairly independently. Why five years or more? In-house legal departments are not good training grounds for recent law graduates and junior-level attorneys. Companies generally do not have the resources available to train attorneys. Moreover, in-house attorneys, unlike their law firm counterparts, are viewed as part of overhead. Therefore, while attorneys are a necessity, they do not contribute to the financial bottom line of the companies they serve. Therefore, in-house legal departments have every incentive to want to hire experienced attorneys who require little training or supervision.
Is there such a thing as too much experience? In some cases, there is. Companies tend to value hiring attorneys who have both law firm and in-house experience. Partner-level attorneys who only have law firm experience are at risk of being passed for positions, junior-level or otherwise. They tend to be viewed as too specialized, not business-oriented enough, and lacking in industry experience. That prejudice tends to grow in accordance with the length of time they have remained in private practice without ever having held an in-house position. Partner-level attorneys are often viewed as too “inflexible” and expensive to successfully transition in-house. In an employer-driven market companies get what companies want, whether or not these preferences are justified. Therefore, the best time to consider an in-house transition is after five years of practice and before partnership.
When it comes to the type of practice area in-house legal departments are interested in when hiring, it is important to remember that not all practice areas are created equal. While corporate law departments do hire attorneys in a variety of specialized practice areas, including litigation, labor and employment, intellectual property, real estate, and tax – to name a few, these positions are few and far in between. In other words, there are very few in-house legal opportunities available for these practice areas. Moreover, because of the type of competition that is generated for these few position, outstanding candidates are often kept from ever making the final cut.
If you are playing a numbers game, which is what you have to do when considering an in-house attorney position, and you are interested in moving up on the in-house totem poll, you should have general corporate and commercial contracts experience. In other words, transactional attorneys have an edge in the number of positions available to them, not to mention improved prospects for advancement within law departments, including general counsel positions.
To improve your odds even further, you should supplement your transactional practice with some exposure to litigation, employment, corporate governance, finance, intellectual property, and governmental regulations, to be able to assist a company gets its goods or services to market. Corporate law departments tend to look for “generalists,” or attorneys who are able to spot issues and handle matters in a wide variety of areas. In other words, most in-house counsel act like ER doctors conducting triage when the ambulance gets in. They have to quickly identify the problem, establish priorities, determine what they can handle themselves and whether they will require the services of a specialist, or in this case an outside counsel.
Even if you have the required experience and practice area to be a good candidate for an in-house position, there are a number of “soft skills” you need to be competitive and successful for these positions. First, as an in-house attorney you need to have business sense. When a company hires in-house counsels, they are expected to provide legal advice in a business context. The ability to understand business objectives and provide legal advice to non-lawyers is crucial to succeeding as an in-house counsel. Along those lines, the ability to persuade is also an important quality to have, as counsels often have to defend their positions. This assumes strong negotiation skills, as well as superior oral and written communication skills.
In-house attorneys are also required to work with a wide variety of people, from senior executives to employees on the floor. Therefore, having strong interpersonal skills and the ability to be comfortable in a variety of situations, from conducting formal board meetings to dispensing informal hallway advice, it very important as well. Finally, a successful in-house attorney must be able to provide practical advice. In other words, companies tend to turn to their counsel for solutions to their business problems, rather than for textbook advice or opinions. To be an effective problem-solver, an in-house attorney must not only be familiar with his company’s business, structure or industry, but also its culture and its risk management standards. Of course, these are but a few of the soft skills that are required to be an effective in-house counsel; there are others, many of which are company and industry-specific. What is to be remembered is that being an experienced and skilled legal practitioner, while a requisite, is not always sufficient to become a strong candidate for in-house positions in today’s marketplace.
A good legal recruiter can help you find the job you’ve always wanted. That said, candidates generally don’t understand what legal recruiters do, or how best to use them. To maximize this partnership and motivate them to be your advocate, here are 5 myths that need to be dispelled:
MYTH 1: A Recruiter's Job Is To Find Me a Job
FACT: Legal recruiters are paid by their employer clients—not their candidates. Their job is to find the best talent for the position the employer is seeking to fill. They have to keep in mind all of the employer’s requirements and deliver candidates that are an exact match. They aren't paid to help people transition to new practice areas, find jobs for those that have been unemployed for long periods of time, or practiced on their own as solo practitioners. Instead, they are seeking talented individuals who have done the job already in a different context, or candidates ready to move up to the next level in their same career path. Also, companies simply do not accept unsolicited resumes from recruiters. They hire them for specific jobs. So it is not within a legal recruiter’s capacity to present you to their current or former clients just based on your strength as a candidate; it simply does not work that way. While good recruiters dedicate extensive time and resources to working with candidates who are likely to meet their employer clients’ expectations, they are not an employment agency, career counselor, or coach for job seekers. Therefore, recognize their role and advantage of your legal recruiter’s knowledge regarding the search and hire process, and the legal marketplace.
MYTH 2: Recruiters Are Rude and Unresponsive
FACT: The truth is that most recruiters simply don't have the time to respond to the hundreds of unsolicited resumes and phones call they receive every week. It is also common for a recruiter to make over fifty calls each day, and with that kind of volume they simply don't have the time to deal with unplanned conversations. Legal recruiters, like anyone, have limited time and resources, and have to prioritize who is worth speaking with, and for how long. They are likely to be very responsive to clients or potential clients who have job orders for them to fill, and people who they see as strong candidates for those job orders. They are likely to be much less responsive to those who approach them out of a sense of desperation, with a career change in mind, or for whom they don’t have a job to submit them to.
MYTH 3: It’s Best to Work With Multiple Recruiters or Bypass Them Altogether
FACT: If you are seeking a law firm job, you need only one good recruiter to handle your search. Virtually all law firm searches are done on a “contingent” basis, meaning any reputable recruiter can submit a candidate to a prospective employer for consideration. Choosing one good recruiter ensures that you have access to all law firm openings. In contrast to a law firm search, if your goal is an in-house position, then you should engage multiple resources. However, while most in-house positions are filled on a “exclusive” basis, some in-house searches are conducted on a “contingent” basis, much like firm searches, meaning that the company accepts candidate submissions from a number of reputable recruiters. You should authorize your chosen recruiter to monitor such opportunities on your behalf. When you hear about a job from recruiters, and decide to bypass them by sending your resume directly to the employer, so you don’t come with a fee, think again. Chances are the recruiter and employer are working on an “exclusive” basis, so you’ll still have a fee attached to your candidacy, and you’ll likely have to be vetted by the same recruiter you tried to bypass. Rather than optimizing your goodwill and have the recruiter help put your best foot forward before an employer, you may have lost your only internal ally. The same can be said in a contingent situation; for the legal recruiter will have an incentive to make you stand out from the rest of the applicants. They will be able to discuss your candidacy directly with the employer, and potentially make the difference. On your own, you will not have anyone able to help you get a leg up on the competition.
MYTH 4: Recruiters Aren't Interested in Negotiating The Best Compensation Package
FACT: The majority of legal recruiters are paid recruiting fees that are a percentage of the new hire's first year base salary. The more you earn, the more they earn. Therefore, it is generally in their best interest that you obtain the best possible compensation package. Legal recruiters often they have inside information about what a company is willing to pay, and are able to negotiate a higher salary than what a candidate initially thought they could get. However, the opposite is often true. The company may have already discussed what they would be willing to pay for a top notch candidate, or made it clear that they are not willing to negotiate. In these cases, legal recruiters can do little but to advise candidates of the same, and not enter into negotiations that will not only produce no results, but also potentially damage the newly created relationship between the candidate and the employer. Companies do not take the recruiter's commission out of the new hire's compensation. Employers who have decided to hire a recruiter to assist them with the search understand that they must pay a premium for candidates sourced through recruiters, and are willing to do so.
MYTH 5: Recruiters Don't Care About Creating Long-Term Relationships
FACT: Legal recruiting is a relationship-building business. Successful recruiters know that their long-term success is based on building their network of relationships. Repeat business that comes from gaining multiple job orders from the same company is a key ingredient to any successful legal recruiting firm. The same can be said of candidates that were not a good fit for a current job, but went out of their way to introduce them to someone who was, or tried to provide them with job leads. These are the sort of candidates that a recruiter will remember and likely contact when they have a good job order to fill. Recruiters also have connections that can help candidates; and they are likely to offer them to those that showed a great deal of professionalism and respect of the process. One surefire way to get a recruiter's attention and build a long-term relationship with them is to offer to provide the names of people who are strong connectors to others, thought leaders, and high performers in their specialized field. Thinking of the relationship as “qui pro quo” can go a long way towards establishing a relationship that can be fruitful for both parties.
Not every candidate will find success working with a legal recruiter. However, if you are accomplished in your field and committed to staying in it, building relationships with legal recruiters who specialize in your skill set and industry can be your greatest asset in your job search.
In today’s digital age, job hunting is usually reduced to a resume that includes a printed name. First impressions are everything, and often these impressions are formed according to the name that appears on the resume. Can your name impact your job search? Unfortunately, the answer is yes. Especially, if your name is on the exotic side of the spectrum. In other words, if your resume does not include a familiar Anglo-sounding name, chances are you may be getting short-changed when it comes to landing an interview.
Studies Show Bias in Names
One study by researchers at MIT and the University of Chicago found that job applicants with names that sounded African-American got short shrift when it came to the hiring process. The researchers sent out 5,000 fake resumes, and it turned out that resumes with names such as Tyrone and Tamika were less likely to get calls from prospective employers than their Anglo-sounding counterparts, and qualifications seemed to have little impact.
Since 9/11, there seems to be more of a bias against Muslim/Arab sounding names. Job seekers from the Middle East and India sometimes complain that their job searches are taking longer than their Anglo Saxon named counterparts. Could the reverse also be true? Some job seekers with Asian sounding names sometimes claim that employers select them based on stereotypes that includes being ‘smart,’ ‘hardworking,’ and ‘committed.’”
Are potential employers discriminating? Possibly, and this sort of bias might not even be deliberate. When all things are equal, individuals tend to gravitate towards the ‘known’ rather than the ‘unknown,’ and name recognition and familiarity is no exception. Whether or not it is deliberate, or the employer has some legitimate business reason for preferring certain names to others, this practice is very much alive, especially in a market where there are more qualified applicants per position than ever before.
Should You Change Your Name?
To change or not to change your name is the real question. If you have an ‘exotic’ sounding name or one that reflects your ethnicity, should you change it to a name that will strike most people as ‘familiar’ or ‘mainstream’ rather than ‘foreign’ or ‘confusing?’” That’s a deeply personal question. If you chose to change your name, you may be catering to the ignorance and discrimination that prompted you to make the change in the first place. On the other hand, changing your name could have a positive impact on your resume selection and job search.
Whether you chose to change your name to an American-sounding or ‘neutral’ sounding name, you may want to simply consider following the national trend: name abbreviation. How many people do you know today who go by Alexander, Christopher, or Elizabeth? Whenever a name is more than two syllables, you can be sure that someone will try and find a short nickname to replace it. Adopting an abbreviated version of your names could allow you to retain part of your identity, but provide an easier or more memorable option for your colleagues to remember. While changing your names is a deeply personal choice, it may be worth exploring, especially if you’ve been hitting the pavement unsuccessfully.
InsideCounsel has released its hugely popular “2012 in-house compensation report,” discussing compensation, the hiring forecast, hot trends, and what it takes to land an in-house position, and how to succeed as in-house attorney.
Companies Are Hiring, But Selectively
The good news is that companies are hiring, the bad news is that they are only doing so very selectively. With the economy finally on the upswing, law departments are looking to hire new help. But experts caution that companies aren’t necessarily hiring attorneys.
The bulk of the hiring seems to be dedicated to paralegals and contract managers. When it comes to hiring attorneys, the numbers are still very low, and the competition very stiff.
Who’s Getting Hired: Standout Experienced Business Lawyers
Companies are most interested in mid-level and senior lawyers with four to nine years of experience. Additionally, they’re seeking jack-of-all-trades attorneys who can work independently.
Being a lawyer that delivers high quality services is no longer enough to land an in-house job. Today, lawyers hoping to get hired by a company need to show that they understand the company’s business and can contribute to its bottom line.
A law degree might no longer be enough. Today’s, in-house lawyers have to understand financials, business strategies, and need to be able to wisely manage projects and budgets. Many are now armed with M.B.A.’s to deliver just that.
One thing is clear: As companies emerge from the recession and slowly increase their legal hiring, attorneys searching for new careers must stand out among the competition. That often means being armed with more than legal excellence to do so.
Advice to Young Law Grads: Start with a Firm and Network.
The vast majority of corporate legal departments are still steering clear of recent law graduated. What can a recent law graduate do to improve his or her chances at landing in-house? The solution: try your hand at a law firm position first, focus on transactional work, stay there for at least five years, and network aggressively.
Base Salaries Slightly Up by 3.3%
2011 has brought moderate increase in in-house base salaries. According to the 2011 HBR Law Department Survey, the average base salary increase among all legal department staff levels in 2011 was 3.3 percent, up from an average increase of 2.6 percent in 2010.
The Bonus Is the New Gravy
The 2011 HBR Law Department Survey found that the average bonus increase among attorneys was an astounding 25.7 percent. The average cash bonus for all attorney levels was $67,000? What does it take to earn those bonuses? Today’s in-house lawyers are held accountable for the level of performance and their contribution to the bottom line. By the same token, they’re asked to share the risk of their companies’ performance. So, in-house lawyers have to meet their objectives, and contribute to the company’s bottom line to expect to get some gravy on top of base.
What’s Hot: Management Skills, IP, M&A and Compliance
The most in-demand practice areas: transactional (M&A), IP, labor and employment, and compliance. In terms of industries, health care and pharmaceutical are generally offering higher salaries.
The hottest skills required from in-house lawyers aside for outstanding legal and business skills, are management skills. Knowing how to manage projects, people, and budgets is key to increasing one’s value in-house.
Trends of the Future: International Expansion and E-Discovery
As companies are pushing for international expansion as a competitive strategy to expand their core business and increase their market share, so are corporate legal departments. Today, many clients are looking to hire in-house attorneys for their international operations, with a focus on Asia, South America, and India.
E-discovery is also very much in-demand. Companies are looking for lawyers who can effectively manage e-discovery and document review with a smart process that saves money.
What can we take away from this report? Lawyers with any hopes to succeed in-house need to be able to bring value beyond outstanding legal skills and experience. Contribution to the bottom line is what it’s all about.
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.
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:
• 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.
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.
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.
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.