Friday, March 14, 2008

Questioning the WSJ's Anecdotal Evidence on In-House Lawyer Jobs

Posted by Jeff Lipshaw

Dan Slater, the law blogger for the Wall Street Journal, has a post up on comparative pay as between in-house and out-house (oops, law firm) lawyers.  I don't have any beef one way or another with the pay Billablehour statistics, but I feel obliged to dispute this bit of anecdotal evidence about in-house practice.  According to Zachary Zaharek, a (or the) senior corporate counsel at First American CoreLogic, and the head of the Southern California chapter of the Association of Corporate Counsel:

“An associate is getting grinded with billable hour requirements, and working weekends and late at night,” said Zaharek, who was a bankruptcy attorney at Malcolm Cisneros before going in-house. “A corporate counsel doesn’t have that. Also, when you’re a litigator, you’re looking back at history and asking what should the parties have done. As an in-house lawyer, you’re looking ahead and asking how you can help the company avoid pitfalls.”

But it’s not all peaches and cream as a company lawyer. “At a law firm you have a book of business, which is maybe 10 clients,” explained Zaharek. “At a corporation, you only have one client. So the risk is that if the company goes insolvent, or gets merged or bought, then there goes your client.”

Well, let's see.  I spent the better part of twelve years running in-house law departments, and I disagree with just about everything in the quote.

1.   Working hard.  Just as I suspect there are law firms in which the culture is that you don't work nights and weekends, I suppose there are companies with similar cultures.  My experience was that our lawyers worked as long and as hard, traveled more (all over the world), and were subject overall to as much stress as their private firm counterparts.  What I know was different, and I think ameliorated some of the particular LAW FIRM stress, was: 

    (a) We didn't have billable hours.  Whatever had to get done got done.  Not writing your time down and being measured by that (as opposed to the results you get or the quality of your work or the respect of your clients) was the biggest single difference from law firm life.

    (b) If you are the GC of a business, the work is in many ways more varied.  Not only do you practice law, but you get involved in the management of the business, and you get involved in the administration (financial and otherwise) of the law function.  So much of what a law firm lawyer couldn't count as billable hours was a significant portion of an in-house lawyer's job.  And the mere variety, I think, reduces the kind of stress you feel in a law firm.

   (c) Being involved in a business may well be a lot more meaningful than cranking out billables, and contributes to a desire to work hard.

   (d) One of the first questions you always get from people is whether your life, now that you are in-house, is more "manageable."  Mine never was, and I used to tell people that if it were possible to translate my work into billable hour equivalents, it would have been in the 2,400 hour neighborhood.

   (e) The quickest way to disqualify yourself from most the of in-house jobs I knew about was to suggest that you wanted to move in order not to work as hard.

2.  "At a corporation you have only one client. . . ."  As to job security, I read a lot more about lawyers getting laid off from big law firms than I do from big companies.  I am not suggesting one is more secure than another.  I just think the inference is unsupported.  Moreover, it depends on the company.  In big portfolio companies, you may well acquire clients as well.  The lawyers may move with transferred companies (that happens a lot).  As to having only one client, again, this is going to vary by company, but my guess is that rarely does an in-house lawyer feel that he or she has one client.  You may have responsibility for multiple divisions.  You will certainly be asked by multiple people - the V.P. of Sales and Marketing, the head of corporate development, the CEO, the V.P. of Human Resources, etc. - to get involved in many different things, and those individual commitments are just like making commitments to different clients in a law firm.

3.  Looking ahead and looking back.  It depends.  Part of what you do in-house may be to manage litigation.  And in private practice you may do deals.

This, I'm afraid, is an area fraught with easy (and misleading) generalizations.

* Thanks to for the picture of the clock.

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