Do I Go In-house and When?
Congratulations on your Call. Some might be wondering already when they should move into in-house practice while others might not consider it until later. This piece gives you some factors to take into account without meaning to set down any hard and fast rules. Practising in-house is quite different from being in a firm, involves a different type of legal work, is in a different working environment and takes different skills.
Less Legalistic Legal Work
In-house practice is generally less purely legalistic and involves more commercial considerations. The business you are serving expects legal solutions tailored not only to their operations but to the particular transaction on which you are advising. Rarely will it be acceptable to give a purely legal answer, particularly if that answer is no. You will be expected to find a legal way to conduct the transaction if at all possible and to make a realistic assessment of the risks. For lawyers, any possibility of a risk eventuating often means that the transaction is barred. For business people, the acceptability of risk is determined by the likelihood and the consequences of the eventuality. An event that is highly likely to happen but with mild consequences will often be an acceptable risk, as might one that has extreme consequences but is very unlikely to happen. Most businesses will not find it useful if their in-house lawyer merely tells them there is a risk without helping them assess these factors, including potential financial consequences. In-house lawyers cannot shelter behind the well-worn phrase “but this is a commercial decision for you”.
Immediate Answers – Usually
You will not have the time to research questions as you did in private practice, and nor will you usually have the budget to obtain external legal advice. You will be expected to know most answers relatively quickly – often immediately – even if you caveat that you are not 100 per cent sure. Such reservations are usually ignored and your view will be taken as the concluded position unless you make yourself very clear. The upshot of this is that you will be expected to advise on-the-go and be right much more often than not.
A corollary of that last point is that you need to know your limitations and when you really do need either time or external advice on serious questions. The business will not always appreciate which questions are serious and which are not, and you will need to be able to educate your instructors when you need assistance. Be aware that you might be called upon to justify your own existence if you are suggesting seeking external advice.
Courage Under Fire
You will need the courage to be politely firm – sometimes very firm – with business people determined on a particular course where you think caution or external advice is necessary. At the same time, you will remember that these people usually will have a say in your bonus, your career and sometimes your employment itself. Although similar might be said of clients of a firm, it is more immediate with colleagues in a business who have the ear of your boss and whom your boss must also keep happy.
Legal departments in businesses are usually organised very differently from a firm. Mostly the structure is quite flat even in large companies, with only two or three layers of seniority. In many small and medium enterprises you will be the sole lawyer even if grandly titled General Counsel. In-house counsel generally do not have the same level of supervision as in a firm and usually serve their business directly rather than through a more senior lawyer. They might copy their supervisor on e-mails or have a weekly reporting, but the usual expectation is that they operate with minimal supervision and then only when they request. Some large departments operate differently in certain industries but most corporate counsel are expected to be set-and-forget lawyers: given a particular position and clients, and then left to deal with them with guidance and supervision on request.
Little Legal Training
This structure means that there is little scope for the vital training and discipline one gets in a firm. As tough as it can be, everyone looks back with appreciation at their early days of training in a firm under demanding but experienced partners. We realise that those lessons were necessary to produce the intellectual rigour, mental discipline and discerning thought process to practise law properly.
As a result of the flat corporate structure, promotion can be less certain and more difficult in a company than in a firm. In most firms the progression from graduate to associate and senior associate is fairly certain, and mostly there is no bar to appointing another partner if she can bring in the work. Companies usually only have one General Counsel or Head of Legal either for the whole company or for large parts of the business. Additional General Counsel or Head of Legal positions are not created merely for worthy senior lawyers, and there will usually be many internal and external applicants for those roles when vacant. I realised some time after going in-house that I had swapped a career for a job, merely exchanging time for money. To deal with this lack of promotion, some lawyers leave Legal and “go into the business”, becoming one of the commercial people with a legal background which then seems to become less and less relevant.
Salaries in-house are lower than in private practice although there are some General Counsel or Heads of Legal who earn decent amounts. Bonuses paid to Legal can also be lower than those paid to commercial people in the business, with Legal being seen only as a “cost centre” – in other words, as a leech on the business. This gives some lawyers another reason to go into the business where salaries and bonuses are often higher.
Repetitive or Varied Work
Roles in corporate practice vary considerably depending on the nature of the company. Some roles involve highly repetitive work of the same type leading to proficiency but boredom. Others, particularly where you are the sole counsel, can involve wildly varied work, being very interesting but also stressful and busy. Either extreme can be unattractive over time and it is worth researching the position and the company thoroughly before applying or accepting.
Shorter Working Hours
Working hours are usually shorter in-house than in private practice. Shortly after I left private practice and moved into a bank, I met my former barrister colleagues from chambers and was telling them how I now left work soon after 5pm and found I had a whole extra “day” to myself until around midnight. Their look was beyond incredulity – they could not comprehend how such a thing was possible, only knowing a private lawyer’s life. This will be important to those seeking work-life balance or wanting to concentrate on family or other interests but it has to be weighed against some of the less appealing aspects mentioned here – potential boredom, meaninglessness, no career, lower pay, lack of respect, and less legal work.
Lawyers in-house are often not given the same respect by the business as when they were in private practice. One commercial colleague asked a corporate lawyer newly joined from a top tier firm “How does it feel being a second rate lawyer now?” While everyone – judges, private practitioners and commercial people alike – pretend they view in-house counsel on the same level as their private colleagues, in truth they do not. External lawyers will be polite because they want your work but that can be the extent of the respect. A friend who left the partnership of a highly regarded firm to go in-house at his major client said soon after that he had gone from someone the business listened to, to being a mid-level functionary. Internal lawyers are often seen as merely another impediment to doing business, or at best another tradesperson necessary to make the transaction happen. This might seem unimportant at your stage if you feel people already see you that way, but later it can have an effect on the satisfaction and fulfilment you derive from your work.
Affinity for Employer
Depending on your company, its industry, size and corporate values, it might be difficult at times to identity with your employer, to champion its cause and, as a result, to feel you are doing something useful. In a firm, one can usually be proud of the firm itself and its approach to clients. Most of the time one can also be proud of the lawyer’s duty to act for any clients regardless of your disagreement with them or their cause. The connection an in-house counsel has with her corporate employer is much more immediate than between private practitioner and client. It is also usually more lasting. If it is difficult to espouse or even be identified with your employer’s industry or values, one’s work can lack meaning, or worse.
Corporate culture is different from the professional culture at a firm. Corporations, although they may be professionally run, are not professionals and do not have the same ethos as a firm, regardless of how high their business ethics or professionalism. The consciousness of the honourable profession to which we have been “called” does not exist in a corporation. A lawyer would most likely be privately or publicly derided in a company for suggesting she had some mystical calling that placed her professionalism above that of her colleagues. Our higher duties are unknown to most and would be seen as quaint, self-serving, self-important anachronisms to anyone who learned them. The feeling in-house is much more of being a tradesperson than of a professional.
Another perspective of corporate culture is that some might put strains on the lawyer’s professionalism and sense of duty. It can be more difficult to disassociate oneself from activities within a company where the only equivalent to ceasing to act is to resign.
In a firm one is surrounded by lawyers, for better or worse, and the thinking is generally similar. In a company, the lawyers are vastly outnumbered and are surrounded, usually in open plan, by commercial people whose thinking can be quite different from lawyers’. This is not necessarily a negative but is something to take into account as a reality. It can be refreshing to have different ways of looking at things and for quite different levels of importance given to considerations. In particular, there can be different views on how important the law is ranging from necessary to irrelevant. Commercial language can be challenging for lawyers, as can lawyers’ ways of explaining things to the business. For some lawyers who have a real interest in business, this environment can be enlivening. Others who are more into the law can miss their legal colleagues and the atmosphere in a firm.
Lower or Different Stress
Stress is usually lower in-house than in a firm. There is generally less work, there are no billing or time targets, business development is not necessary, and the clients are internal rather than external – although this can produce a different type of pressure.
In-house practice can be perceived as being generally easier than private practice because of the lower hours, risk, client pressures and business development but there are trade-offs in lower salaries, prospects, fulfilment and purpose. Some lawyers love practising in-house while others miss the more academic parts of the law. The expectations of the business and the usual structure of corporate legal departments mean that you will benefit from a few solid years of discipline, training and general experience in a firm before being relatively cut loose in-house. You will also appreciate the networks you build in your early years to draw on in the many judgment calls you have to make in-house.