2012 In-House Report: Salaries & Hiring Trends
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.
In-House Job Search: Are You Too Junior?
The lateral job market between law firms and corporate in-house legal departments is a tale of two cities. What law firms are finding attractive in a potential candidate can sometimes be quite the opposite from what corporate legal departments are seeking. One of the best examples is experience. While attorneys with three to five years of experience are considered “hot” commodities by law firms, the great majority of corporate legal departments give them the cold shoulder.
The sweet spot for law firms that are hiring is three to five years of experience. There are several reasons for that. First, law firm associates with three to five years of experience have the highest level of attrition. According to statistics released by The National Association for Law Placement, almost 80 percent of attorneys at large law firms no longer work there five years later. The reasons for this high rate of attrition are varied. They include disillusionment with law firm life, not “cutting it,” being in a practice area that is drying up, or simply realizing making partnership is an unlikely goal. Whatever the reason might be, large firms hire significantly more associates than they plan on keeping for the long-term. Therefore, law firms are always on the lookout for talent to replenish these classes.
The other reason law firms have a strong appetite for attorneys with three to five years of experience has to do with their profitability. At this level of experience, associates can tackle more complex work with little supervision at a relatively affordable hourly rate. Whereas law firms claim to lose money on associates during their first three years of practice, they have plenty to gain once these same associates have been trained and can handle the bulk of the work partners are bringing in. They are instrumental to a law firm’s profitability.
When it comes to in-house legal departments, the story is quite different. Corporate legal departments are generally not interested in attorneys with three to five years of experience. Of course, there are always exceptions that prove the rule, but what we are discussing here is the rule, not the exception. Traditionally, corporate legal department are seeking experienced attorneys, with at least ten years of experience to join their ranks. The most sought-after candidates are transactional attorneys with strong business acumen, who can get up to speed quickly, understand operations, and deliver results in a fast, practical, and efficient manner.
Corporate legal departments are not good training grounds for junior and inexperienced attorneys. Corporate legal departments expect their attorneys to have a strong depth and breadth of knowledge, work independently, and with few resources. Generally, they are seeking attorneys who have developed a solid understanding of their industry, which also comes with practice experience. Sometimes, companies advertise for less-experienced lawyers who have been practicing for five to seven years. This is typically driven by a need to hire experienced candidates, but at a reduced cost. Attorneys with five to seven years can usually deliver the type of work handled by in-house legal departments, but they are generally less expensive than their more experienced counterparts. That said, more often than not, attorneys who are more experienced than the position requires fill these same positions.
What does this mean for junior-level attorneys with three to five years of experience? It’s typically best for them to hold off on their in-house search for a while. There are several reasons why they should wait. The most obvious one is demand. There simply isn’t much of a demand for junior attorneys in-house. Junior attorneys need to be patient and wait before trying to make a lateral move in-house. We are not likely to see an increase in demand for junior-level attorneys in-house, even if the economy picks back up. Attorneys thinking about going in-house should focus on developing their practice skills, business sense, and industry-specific knowledge. Attorneys typically start being marketable in their fifth year, and have more available options starting in their tenth year in practice. In the meantime, cultivating skills, until the optimum time has come to begin an in-house job search, is the best way to prepare for that type of lateral move.
In-House Legal Department Predictions for 2012
The good news for in-house lawyers in 2011 was that there were raises for base salaries and a slight uptick in hiring. The bad news is that those improvements were relative. Base salary raises were very slight compared to the rate of inflation,. They also came after several years of salary freezes. Bonuses did offset some of these lackluster base salary numbers, but being tied to company performance, not everyone enjoyed them.
The uptick in employment did not stem from the creation of new positions per se, but rather as an effort to replace departing attorneys and rebalance overworked corporate legal departments that had suffered heavy layoffs during the Great Recession. In other words, the number of available in-house attorney positions remained quite low. On the other hands, there was some positive movement out there, which we expect to continue in 2012.
What Will In-House Legal Hiring Look Like in 2012?
The hiring trend that we identified in 2011 by corporate legal departments is likely to continue in 2012. The good news is that corporate legal departments are planning to hire in 2012 – about 40%. The bad news is that the majority of the hires will not be full-time attorneys.
Corporate legal departments are dealing with a heavier workload in part by using more paralegals and contract lawyers. About 67 per cent of corporate legal departments are comprised of lawyers with the rest made up of paralegals and other support staff. Legal departments are still operating with flat or decreasing budgets, and therefore, they are seeking the highest level of competency at the lowest cost. Compliance and contract review has been increasingly delegated to paralegals and contract managers. In other words, corporate legal departments are hiring more "staff" rather than "lawyers" in an effort to improve efficiency rather than “bulk up.”
What Are Corporate Legal Departments Looking for?
Corporate legal departments that are hiring full-time lawyers are doing so primarily to replace departing lawyers or add a specialty to handle work in a growing area. While corporate legal departments may be conducting some hiring, they are definitely looking for “more bang for their buck.” What exactly are they looking for?
Corporate legal departments are looking for experienced (5-10years) all-around corporate lawyers with a broad legal background, strong business acumen, and proven management skills. And that’s just the tip of the iceberg. Factors that are also taken into consideration includes national law firm background, few transitions, specific industry experience, and proven in-house track record of success.
The ideal candidate is a businessman who happens to be a lawyer, not the other way around. This is in response by corporate legal departments to want to demonstrate to the C-suite that they have what it takes to handle legal matters in a manner that contributes to the bottom line. Today's in-house attorney has to be packed with achievements that show how he/she can contribute to the company's bottom line; being an excellent lawyer is simply not enough.
What Are In-Demand Practice Areas?
General Business/Corporate Law (M&A a Plus) – Attorneys that can handle a company’s various transactions, regulatory and compliance matters, while understanding the business, and managing internal and external counsels, are the most in-demand. Attorneys with all of the above, and a strong M&A background are also prized.
IP/Licensing – The wave of protection for innovation that was driven by the Great Recession continues. As a result, licensing is a very hot in-house practic. An increase in patent prosecution has also heightened the need for attorneys with experience in trademarks and patents.
Contracts & Compliance – Corporate legal departments have an ongoing need for support to handle contracts and licensing. They are increasingly hiring contract administrators to manage procurement issues, and paralegals for compliance issues. There are some attorney-level hires, but these tend to be contract attorneys or contract administrators with a law degree.
International – As companies look to focus on expanding their core businesses and increase their market share, they are likely to look outside of the U.S. as part of their competitive strategy. This will drive the international law practice. U.S. companies will continue to look opportunities in the three most popular emerging markets—Brazil, India and China. Some other markets that may generate some new and renewed interest may include Mexico, Vietnam, Korea and the Middle East, with Turkey, Saudi Arabia, and the United Arab Emirates as attracting most of the attention. This boost in international transactions will come primarily from companies in the consumer and infrastructure sector seeking to expand into new markets.
What Will Compensation Look Like in 2012?
Total compensation for in-house counsel will most likely continue to rise, albeit modestly in 2012.
Base salaries will see moderate increases (around 3%). Raises will be primarily reserved for in-house attorneys that bring something unique and/or can save money by managing projects, people, and budgets. In other words, senior lawyers (10+ years) with management responsibilities at publicly trade companies, and specialty area lawyers (healthcare, patent, IP, etc.), will enjoy higher compensation levels.
Average In-House Attorney Compensation:
4-9 years = $100K-$180K
10+ years= $130K-$220K
Bonuses are where the difference will be made up.
Gone are the days of earning a bonus at your boss’ discretion. Today’s in-house counsel bonus is driven by: individual performance and company performance. In-house lawyers are held accountable for their contributions to the bottom-line, and are asked to share the risk of their company’s performance. If the economy continues to improve in 2012, and companies perform well enough to be able to share the rewards, then bonuses will continue to rise.
What Else Could You See in Your Stocking for 2012?
Companies are reticent about reaching into their pockets to offer more cash up front in the form of salaries. They want to see a return on their investment. That said, for hard-to-find candidates and performers – there are making efforts, if not with cash, by offering other incentives that include:
• Telecommuting
• Flexible Hours
• More Vacation Time
The Bottom Line
Hiring will still be very tight for 2012, but we will continue to see some improvements. Performance-based compensation is also here to stay. This is still driven by the economy, and while we have been through the worst since 2007, we have not quite gotten back on track yet. Our economy is still very unpredictable and fragile. Companies are hoping for the best, but still preparing for the worst. Most organizations are remaining conservative regarding their fixed costs, including their salary expense. Therefore, this will continue to make for a sluggish hiring market. We may see some small increases in base salary if the economy continues to slowly gather momentum. At the end of the day, much of the growth will be in bonuses. Hiring will focus on staff that can handle more commoditized work, and experienced management-level corporate attorney and specialists.
In Search of That In-House Spot? Some Words of Advice.
If you are in private practice, either as an associate or a partner at a law firm, you’ve probably wondered at one time or another what it might be like to go in-house. You may have envisioned a world without billable requirements, business development, free weekends, and possibly less stress. Perhaps you are intrigued by the prospect of working with a single client, knowing where the work will come next, and have an interest in being viewed more a business partner, and less as a fire extinguisher. The grass being “greener” on the other side is not necessarily a reality. In fact, the reality often looks quite different. But when it comes to going in-house, law firm attorney seem convinced that this is a better way to practice law, and whether that’s true for most, the in-house call remains irresistible.
Since the recession, the legal market has never quite bounced back. Talk of signs of improvements in hiring and compensation are true, but it is also relative. We experienced one of the most massive and deepest bloodletting the legal market has ever experienced. Therefore, while the legal market may no longer be hemorrhaging, it’s not exactly thriving either.
We never completely reabsorbed the thousands of attorneys who were laid off because of the recession; not to mention scores of others who were unsatisfied with their current jobs but held off by their skin of their teeth to ward off the specter of long-term unemployment; as well as those near retirement who saw their life savings dwindle and decided to stay on in the hopes of replenishing their nest egg. Of course, that does not account for the perfectly happy law firm attorneys with dreams of going in-house, or in-house attorneys looking for a raise, advance, or simply a change. That’s quite a crowd!
To say that today's market for in-house jobs is extremely competitive is an understatement at best. The number of applicants for each in-house position can often run into the hundreds, if not more, and employers have the luxury of being able to wait for the perfect candidate – and sometimes the “impossible to find dream candidate.” Finding an in-house job in this legal market can be quite a challenge.
Our firm handles hundreds of in-house searches each year, ranging from general counsel positions with Fortune 100 companies to junior lawyer positions with small, privately held companies. We speak with thousands of lawyers each month, and scores of corporate legal employers. We have a pretty good sense of the trends and general state of the in-house legal market. If the desire to move in-house has not dampened, the success rate on the other hands has dipped.
If you are still convinced that going in-house is the right move for you, let me offer some advice and a few things to consider as you begin your search.
The Road In-House Is a Long And Tedious One
When you are starting to put a resume out there, the first question you might have is, how long is it going to take me to find an in-house job? The obvious answer will be, it depends. Factor that affect how long a job search will have has to do with the applicant’s specific experience, background, financial flexibility, geography and willingness to relocate, and the type of positions he/she is seeking. If you are looking for a GC-level position with a publicly traded Fortune 500 company – the wait might as long as winning the lottery. That said, a good rule of thumb is anywhere between six months to a year, and in many cases a lot more.
Why the long wait? It’s a simple economic formula or supply and demand. Very little demand and a whole lot of supply equal a long road to success. Also, unlike law firms, which are very "flat" organizations, corporate legal departments are typically pyramidal. Therefore, the higher the level, the fewer jobs there are available. Of course, not all candidates are created equals, so the more exceptional the background and experience, and the more flexible the candidate, the shorter the road. Then again, a road that can take anywhere between six months to a year, it not what I would necessarily call short.
Why are there so few in-house legal positions? While the state of economy provides part of the answer, the other has to do with the manner in which corporate legal departments are structured. Unlike in the law firms that are always looking for opportunities to hire lawyers that will improve their bottom line or service their clients, corporations are not often looking to add great legal talent. Whereas law firm lawyers are valued for bringing in business and generating income, in-house lawyers at corporations are viewed as part of the overhead. Rather than generate profit, they tend to cost money. Therefore, corporations have to do a cost-value analysis whenever they are considering adding a legal professional. That analysis has certainly been a lot more stringent as corporate legal departments have to do more with less, which also means fewer people.
Fortunately, the push of companies to save money has also forced them to rely less on expensive outside counsel, and more on their in-house legal departments. This has translated in some hiring efforts by companies; however, hiring has been very selective, and attorneys have been stretched to do more. Therefore, while you may feel that your legal expertise is exceptional, if the corporation already has someone else handling those responsibilities in a capable manner, there is little upside to having two people handle the same tasks. You have to be the right person, at the right place, and at the right time.
Recruiting Firms are Not Job Placement Firms
When there are so few positions advertised, it’s easy to understand why candidates decide to work with legal recruiters. However, before you send that resume or make that phone call, you should understand the advantages and limitations of working with legal recruiters. For example, the in-house searches that our firm agrees to undertake are done on an exclusive basis, which is the case for most other legal search firms. This means that our firm is the only search firm being engaged to fill the position and that the company will not accept resume from any other search firm. This means two things: Our client list is unique to us, and we only present candidates to our clients to fill a specific job opening.
In the in-house context, a search firm is not a placement firm. We are hired only to fill those in-house jobs for which we have been retained. Companies generally don't want search firms to send on resume unless the company has already identified a new need and asked the search firm to assist it with the search. So although you may be an exceptional candidate, a search firm is typically constrained by the companies that have engaged it to conduct searches for them.
Finally, because our clients retain us, the positions we are working on do not represent all of the in-house opportunities that are available out. Therefore, reaching out to just one search firm isn't enough for those people looking to go in house. Applicants instead need to find out who handles the in-house searches in their market and reach out to all of them. If the applicant is seeking a law position, my advice is the opposite. That candidate should only pick one recruiter to represent him or her.
What’s the greatest tool for finding a new in-house job? Your connections. In other words, you have to network and let people know you're looking. While there might be some risk of your boss or colleagues ultimately finding out, we think that the benefits to networking far outweigh those risks. Networking is the most effective way to get leads and land an in-house job.
If I had a dollar for every applicant that sent a resume for a position they were not qualified for, I might be able to give Bill Gates a run for his money. The problem I believe is twofold: applicants send their resumes to jobs that sounds interesting and that they would like to have, whether or not they are truly qualified for them, and/or they are so desperate to find a job that that they will throw their resumes at everything under the sun, hoping that something will “stick.”
Whatever the reasoning, do not waste your time applying for positions for which you are not a perfect fit – rather than maybe qualified to do. Why? Because the lack of response will soon frustrate you, despite all of your well-meaning efforts. If the position calls for someone who has fluency in Chinese and software licensing experience, the fact that you took a Chinese course in college and drafted one licensing agreement does not make you a perfect fit. You need to be as exacting about your skills and qualifications as a legal employer will be. What do I mean by “perfect fit?” The test is quite simple: After having read the job description, can you honestly say you meet each and every single one of the requirements listed? If the answer isn't yes, move on.
The road to an in-house position is not an easy one. But to help your chances of success, you need to first be ready for a long process, be honest about your qualifications, and make the effort to grow you internal network. Anything less, and you might never get that shot at an in-house position.
Could the In-House Legal Market Be Improving?
The legal job market has never picked back up since the recession, and talks of market improvements have been rather more wishful thinking than reality. In short, the legal job market has been grim. Yet, there might be a glimmer of light on the horizon coming from in-house legal department: hiring may be on the rise.
A recent survey from HBR Consulting, a consultant to law firms and law departments, shows that in-house hiring may be on the rise. This is a trend that we have been noticing at ESQ Recruiting as well.
What’s prompting a rise in hiring at corporate legal departments? A concerted effort by companies to reduce their legal expenditures and reliance on outside law firms. Legal work has not lessened, if anything, it has increased as a result of recent regulatory changes. As a result, companies are seeking to bring more of the work in-house, which could mean more in-house jobs.
Companies also seem to be on the rebound. According to the annual Association of Corporate Counsel survey, only 54 percent said that their department has been affected this year by the economic downturn—a significant drop from the 74 percent reported in 2009. In addition, the survey also indicate that CLOs were planning to add staff in the coming year, 37% more than reported in 2009, 2008, or 2007.
It also looks like corporate legal departments are willing to spend a little, to save a lot more. The Altman Weil and LexisNexis Martindale-Hubbell survey found an overall increase in law department spending of 7.9 percent to an average spending of $914,000 per lawyer for fiscal year 2005. Outside legal costs rose by 5.5 percent to an average of about $602,000 per lawyer. The survey also found a 19 percent increase in internal hiring with lawyers per billion of revenue rising from 2.93 lawyers per billion in revenue to 3.49 lawyers per billion in revenue."
The results of the 2011 HBR Law Department Survey compiled information from 219 companies in 20 industries. Seventy percent of the participating companies had revenues at or above the Fortune 500 level. Key findings from the survey include the following:
- More than 50 percent of companies reported an increase in worldwide legal staff between 2009 and 2010.
- More than 80 percent of companies said their legal needs are increasing.
- More than 40 percent of companies plan to increase the number of internal lawyers by an average of 10 percent in the next year.
- About 60 percent of survey participants cut outside legal spend by an average of 3 percent between 2009 and 2010.
What does this mean? Corporate legal departments are opening their doors, which is a good sign, but that does not mean that the market is necessarily looking very rosy. Those positions are still few, very competitive, and companies are setting the bar very high for new hires. The good news is that the trend is looking to continue, which may lead to more opportunities for lawyers seeking in-house positions.
When Is It Time to Hire A GC?
While the general trend by most companies is not to hire, when outside counsel bills are stacking up, and executives get too bogged down with the process of drafting sales contract, the time might be right to hire the company's first in-house general counsel.
When a company starts to emerge from its startup status, and the overhead increases with each partner and associate that is engaged to handle more of the company’s work, the right economic decision is usually to bring in a GC.
Most companies that are ready to bring legal in-house share the same concerns: mounting outside legal costs, increasing legal work, and the need for someone who really knows the business well to position the company for the future.
A GC can not only help a company gear up for the next stage of growth and success, but also help a company prepare or prevent a potential crisis. On needs only look at the recent corporate scandals, such as stock option backdating, to understand just how important it is for companies to be properly protected. One of the many reasons companies are considering hiring a GC is to have someone who can immediately see the big picture for the company, and be able to keep them out of trouble.
What should a company look for when trying to hire its first GC? Typically, a “jack-of-all-trades” with a solid ten years of prior legal experience, and industry specific experience. A good GC should be able to the build an appropriate governance structure and do good corporate governance on a shoestring budget. Prevention of problems can go a long way towards saving a company money, something that corporate America seems to be in agreement with.
In general, the size of companies' in-house legal staff has been on the rise, according to reports from the ACC, growing by nearly 40 percent in the last decade. While companies have been shedding some lawyers during the recession, GC hiring has been steadily on the rise. In light of increasing regulatory demands and corporate scandals, and a soft employment market, this may be a good time for companies to assess their needs, and consider building a legal department.
Hot Summer and Cool Legal Job Market
While we may be experiencing a sizzling hot summer this year, the same can’t be said about the job market. What’s it like out there? Clearly, we are not out of the woods, and may even be scaling back. With the headline unemployment rate ticking back up to 9.1 percent in May, the sense of alarm over the state of the economy is once again growing. And it's not helped by a slew of recent reports on everything from the continued high rate of foreclosures to the precarious position of the Greek debt crisis. Things are still incredibly tough in the job market with layoffs outnumber hiring announcements by a sizeable margin.
Where does legal stack up in this declining employment market?
The legal sector lost 2,600 jobs in June 2011 according to the U.S. Bureau of Labor Statistics report; making it the fourth consecutive month this year the industry has seen declining job prospects. Who is affected? Pretty much everyone in the legal sector: lawyers, paralegals, notaries, and the support staff needed to run law firms, such as secretaries and accountants according to the Wall Street Journal Blog. The fall in legal jobs this past month – the biggest decline so far this year – came on the heels of a hint of recovery in May, during which 200 jobs were added, according to the BLS report.
How is this decline impacting unemployed lawyers?
The Great Recession eliminated thousand of lawyer jobs, which never quite returned. This has left a huge hole in the marketplace, with thousands of well-qualified attorney still looking for employment – many hitting the 2-year mark. And there is no visible change on the horizon.
The long line of the unemployed is not comprised of lawyers that are unqualified or not well credentialed. This candidate pool, for the most part, is made up of experienced attorneys with more than 10 year of experience, who have had a solid record of employment, until the Great Recession. The majority never bounced back simply because the jobs never returned.
The change was profound in the legal industry, as both law firms and corporate legal departments have adjusted to doing “more with less.” How does this work? Those that survived layoffs are working more, and firms and corporate legal departments are spending less by not hiring. If firms and corporate legal departments are hiring, it’s most often for part-time and contract positions – and the competition for these jobs remains fierce.
What about the in-house legal market?
Companies, for the most part, are not hiring. Companies that are hiring lawyers are generally looking for general counsel-level candidates to take the legal work in-house and reduce outside counsel spending. They are looking for a "one man shop" to take on as much as possible in-house and curb legal spending. They are also hiring part-time and contract lawyers to fill in the gaps, and increasing their outsourcing whenever possible. In other words, they are hiring as a cost-saving measure.
In-House Legal Employers Are Slow to Pull The Trigger
While we are still very far behind pre-recession hiring, hiring has improved since December. According to the Conference Board, a research organization, the number of job openings advertised online has grown by more than 400,000, to 4.2 million, an upward trend that began in the spring of 2009.
The good news is that there are some jobs, and perhaps a rising number of them. The bad news is that these jobs are not getting filled. Why?
There are a couple of factors at work. First, corporate legal departments that are in the market for new hires are generally looking for very specific types of attorneys, often in niche practices, or with the type of caliber and experience that only a very small number of applicants can fit the bill. In short, they are looking for something as “scarce as hen’s teeth.” No necessarily impossible, but pretty close.
The bottom line is that those corporate legal departments are having trouble finding candidates to meet these highly specific, and often next-to-impossible requirements, and once candidates are found, hiring executives are taking longer to pull the trigger.
Positions that typically took less than 90 days to fill before the recession are sometimes taking four times longer. The reason is simple: hiring executives are holding out for better candidates.
These executives are working under the assumption that there is a large and talented pool of candidates fighting over very few in-house jobs. While that may be true, the fact of it is that there are a lot fewer candidates these same executives are looking for than the market bears. In other words, there are not as many “pearls” in the sea as they may think.
Yet, those making the hiring decisions are convinced otherwise. As a result, interviews are taking longer, and candidates are asked to conduct more rounds than ever before, and wait around longer for offers. I have seen candidates wait as long as 6-9 months before a company would pull the trigger.
Today, if a corporate legal department is interviewing a “superstar” candidate, it will nevertheless feel compelled to wait to speak to 5-6 other “superstars” before committing to anyone. The fact is that there may not be that many out there. The tougher the requirements, the smaller the pool, regardless of the economy. But this is not connecting with hiring executives.
The general thought is that with all the available talent, time-to-fill would go down, but it's just the opposite. When you're still trying to find quality candidates, it's actually taking longer.
With news of the market still being down, corporate legal departments feel obligated to continue looking for better candidates. They want the perfect candidate, when in reality there is no perfect candidate.
The result: positions are taking longer to fill, and often corporate legal departments are losing great candidates because they are not ready to pull the trigger. When that happens, everyone seems surprised. This may be a good market to hire, but the tougher the requirements, the smaller the pool, and the more options these “superstar” candidates have, no matter what the market.
What’s The Market Like? Not as Good As it Seems
Recent reports suggest the economy is picking up steam even though it is not yet fully reflected in the job market. In terms of economic growth, America outpaces all the other G7 nations except Canada. However, when it comes to adding back jobs, America is the weakest.
That’s not good new for job seekers. While there has been some improvement, it has been relatively modest. The jobs are not yet back.
During the recession, businesses looked for ways to increase efficiency and productivity. U.S. productivity, or output per worker, doubled in both of the past two years. In other words, the “doing less with more” is still the norm, and we are not seeing many changes there.
Lawyers are no exception to this rule, especially in-house lawyers, who unlike their law firm counterparts are still viewed as “overhead.” Where are the in-house jobs? There are a handful of in-house jobs out there, but the job recovery is still in hibernation.
This has affected recruiters as well. Fewer jobs in general have also meant fewer job orders for recruiters. And in a market where candidates are deemed plentiful, companies are trying their luck at hiring directly. Of course, what they are experiencing is a pure deluge of applications, and trying to sift through all the resumes to find the gold nugget is no easy tasks. If you are an employer, then expertise, time, and resources you can gain from using recruiters can prove very valuable – they can not only triage quickly, but also go straight to your target.
If you are a candidate, chances are most recruiters will not be helpful to you these days. Why? Not because they do not want to help you. They simply do not have the jobs for you. At the end of the day, this is why you are contacting them in the first place. Therefore, if you are a job seeker, networking still remains your best option. If a recruiter has something for you, the good ones will always be able to find you.
Who’s in Demand for In-House Counsel Positions?
A new survey shows senior level lawyers are in particularly high demand for in-house counsel positions. The survey, by New York legal consulting firm Eoilis International Group, found an increase in attorney interviews at big corporations last year and, among them, were interviews of senior level lawyers and law firm partners.
Why Are Senior-Level Attorneys in Demand?
This is not surprising considering the state of the legal market. There is a plethora of highly skilled attorneys looking for work, and companies are taking full advantage of this market. They are seeking to hire experienced counsel, sometimes at junior-level prices, simply because they can. Also, law firms have not delivered the type of cost-savings companies were expecting during the downturn, and as a result companies have decided to take the legal work in-house and enjoy the savings.
Historically, in-house legal departments have not been good training grounds for attorneys, which is still the case today. Company lawyers are part of the “overhead,” and therefore they must quickly add value to an organization to justify their existence. They do this by being able to work independently, with few resources, on a wide variety of matters. These are typically the traits of senior level attorneys who have been practicing for ten years or more. These attorneys have extensive practice area, management, and business experience all rolled into one. They not only know how to practice law, but they know how to manage people and budgets.
What Else Are Companies Looking For?
According to the survey, in-house positions weren’t the only jobs up for grabs at big corporations. 38% of companies surveyed reported considering experienced attorneys for a wide range of positions, including quasi-legal and business roles. This study signifies two things: Corporations are hiring, BUT their in-house legal departments are looking for experienced lawyers who understand private practice.
"In-house departments are in the process of trying to revamp their images," says Nicky Mukerji, director of business intelligence at LegalBill. "Presenting hires with both legal and business experience sends a strong message to corporate executives and financial departments that law departments will be capable of handling all aspects of their caseloads."
What’s a Recent Graduate or Junior-Level Attorney To Do?
Do not set yourself up for failure by applying to in-house positions for which you are not ready. Get experience with a law firm first. In-house legal departments do not hire attorneys without substantive experience, which is usually translates to at least five years of experience. Moreover, all types of legal experience is not viewed the same by in-house legal departments. Companies tend to favor law firm-trained attorneys over those with government or private practice experience. Companies almost never hire solo practitioners. Companies also do not favor hiring government attorneys either, unless they have the type of regulatory experience that matches their industry. Finally, the great majority of in-house positions are in transactional practice areas, not litigation. Litigation positions are very rare and often reserved for partner-level candidates. If you want to improve your chances of landing an in-house job, focus on transactional practice areas with a law firm.
What’s a Mid-Level Attorney To Do In Today's Job Market?
They need to wait for the market to improve and bulk up on their skills in the meantime. Being a very good attorney is no longer good enough to land an in-house position. You have to be versatile, adaptable, and efficient and know the business and industry of the companies you are targeting. Forget the general counsel position or golden job at a Fortune 500, at least for now. Instead, go for in-house counsel positions that allow for upward mobility, and refocus on small-to-medium-sized corporations in industries in which you have experience. In other words bid your time, try to get your foot in the door at a smaller organization and in a more junior-level role, and stand out by virtue of your work and business skills.
What About Senior-Level Attorneys and Partners?
It’s not a panacea for them either. While experienced partners and attorneys are always more attractive to executives and general counsels, chances are unless you’ve already been a general counsel, not many companies will give you a shot at the top job unless you’ve already proven yourself. It’s a chicken and egg dilemma. This can be overcome by a strong show of the skills and experiences we discussed above. That said, it’s still a very competitive market, so be ready for a long process ahead.
There are still very few positions available and the requirements are increasingly demanding. You need to be able to do it all, be an expert in your field, knowledgeable in a variety of other practice areas, know how to manage, train and hire people, manage outside counsels, balance budgets effectively, and understand the business of the company. Oh, and be ready for a steep pay cut.
While Fortune 500 companies may still pay their general counsel handsomely, the odds of landing that kind of position is akin to winning the lottery. The vast majority of in-house positions are not with Fortune 500 companies, and do not come with a high compensation package. That’s right, companies do not pay law firm salaries, and the compensation cuts from a law firm partner to an in-house legal position, even at the general counsel level, are on average about 50%, no matter how talented the candidate. While you may be ready for a pay cut, the real question is, how low can you go? If you are lucky enough to be selected for a position, be ready to make significant concessions to go to the in-house side.
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