From Out Of A Job To In-House: How Corporate Counsel Trends Are Challenging Big Law Practice

Once again, recent reports on industry trends translates into good and bad news for lawyers.

According to the Association of Corporate Counsel 2011 Census Report–as described in this press release–the past five years have increase in-house legal spending and decreased external spending on litigation.

Translation? A power shift from large law firms to in-house counsel departments is on the rise.

And the current economic recession has caused, or at least exacerbated this trend.

“From demands for discounts, using online auctions to select firms, hiring law grads straight out of school, or simply moving more legal work in house, general counsel are pushing back on their outside lawyers,” reports the WSJ Law Blog.

However, the recession hasn’t depressed in-house counsel salaries.

In fact, notwithstanding hard economic times, compensation by in-house counsel has increased.

Of those surveyed, 22 percent of in-house counsel are earning more than $300,000 per year in salary, bonus, and other compensation, which is a rise of 16 percent from 2006, and 57 percent from 2004 (via WSJ Law Blog).

In-house counsel are seeing increased business and higher salaries, so much so that 37% plan to hire more help. According to the same report, 37% of in-house counsel allegedly planned to hire more staff in 2011. Good news for out-of-work assistants, paralegals, and even some staff associates.

Unfortunately, however, law firms will be forced to adjust to this decline in demand for outside counsel services.

The census discovered the use of outside counsel for tax issues has decreased (20% use them, vs. 30% in 2006). The same holds true for mergers and acquisitions (28%, vs. 35% in 2006) and, most surprisingly, for litigation.

So, if you’re planning a career shift (or have already taken advantage of the recent trend) toward in-house, below you’ll find a few tips for success.

If you’ve changed from a large law firm to corporate counsel, ViXS Systems Inc. general counsel Cheryl Foy emphasizes the importance of learning about the culture of the company you’re working for, including a comprehensive understanding of the needs and challenges of its business.

“Figure out who you’re working with. It’s folly to go in with the idea that ‘I’m the lawyer’—people will argue with your legal opinion. You have to build credibility so assess the culture first,” says Foy (via Canadian Lawyer Magazine).

In addition, don’t let a power shift in industry dynamics translate to a shift in power at your new position.

When Foy found herself in a situation in a previous in-house job where she wanted to be part of the executive team but wasn’t regarded as such, she received this advice: “You need to be acting like you’re at the table already,” (via Canadian Lawyer Magazine).

Make it clear on hire that a position as in-house counsel is one of management and decision-making. Act like a leader from the outset and you’ll be considered one in-house.

Finally, to fully understand the ins and outs of in-house counsel, remember there’s a big difference between big law practice and a position as in-house corporate counsel.

“Adapt a communication style that reflects that your audience has changed,” advises David Allgood, executive vice president and general counsel with the Royal Bank of Canada (via Canadian Lawyer Magazine).

“Remember it’s the enterprise who is your client now.”

And, with a new 40-60 hour workweek (instead of 60-80), who can complain about that?

-WB

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