Going In-House: The Good and the Bad

Published: Dec 21, 2022

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Whether you’re unsure about your future in BigLaw because of burnout from trying to meet billable hour requirements, concerns over recent layoffs (including those at Cooley, Gunderson Dettmer, and Kirkland & Ellis), or upcoming uncertainty in how BigLaw will respond to declines in business and hiring needs, an attractive option for attorneys may be to go in-house with a corporation or startup. And why not? Becoming in-house counsel has long been seen as a great alternative for attorneys with some experience who are looking for something more predictable and less erratic. However, going in-house has its own challenges, and may not be the “golden ticket” it once was thought to be.

Before we get into it, it’s important to lay the groundwork for what it takes to be in-house counsel. Corporations rarely hire attorneys directly from law school; rather, they generally look for attorneys with experience in a broad range of subjects—including corporate, labor and employment, risk management, compliance, regulatory matters, and general litigation—so they can minimize the amount of training and supervision needed for persons managing the entity’s broad range of legal affairs.[i] Attorneys must have certain experience and knowledge before assuming the role of primary legal representative of a company, regardless of how small or large that company is.

Why Attorneys Want to Go In-House

So, what are some of the key benefits of being in-house counsel?

  • The most obvious benefit is that you can say goodbye to the billable hour requirement (or “expectation”) that most BigLaw firms have. There’s no more tracking your work in six-minute increments or worrying that your time might be written off as non-billable.
  • While it’s not etched in stone, in-house counsel generally work fewer hours with a more predictable work schedule than BigLaw attorneys. Fewer hours and greater predictability of work generally mean better work-life balance.
  • As in-house counsel, you have only one client—the corporation—so you don’t have to worry about juggling or prioritizing among a list of clients you would have at a law firm. And with this comes the benefit of working directly and frequently with upper-level management and executive decision-makers.
  • Part of the partnership track for a BigLaw associate is having a knack for bringing in business.[ii] This can be a time-consuming and stressful process. However, as in-house counsel, there is no need to generate business—your business comes directly from the entity you work for, so instead you can focus solely on legal affairs.
  • You have the ability to outsource certain matters. Given the size of many in-house legal departments and broad range of legal issues that come up, it often isn’t possible for them to handle unique issues that require specialized knowledge. And companies are going to continue using law firms for “very important critical work,”[iii] so there’s less pressure and less of a burden on in-house counsel to manage complicated and/or monumental cases.
  • Since you can assign certain cases to outside counsel, this also means you can shift risk and liability to them.

But Being In-House Counsel is Not All Fun and Games

In spite of many benefits, there are numerous challenges and downsides to going in-house, including:

  • While you probably focused on one major (and perhaps an ancillary) practice area at a law firm, you will need to have at least foundational knowledge of a broader range of legal topics when working in-house. Some of these matters were mentioned earlier, and they include—but are not limited to—corporate/transactional, corporate governance, labor and employment, litigation, policy, regulatory, and tax.
  • What you gain in quality of life and a more predictable work schedule by going in-house, you probably lose in salary and earning potential. While this may seem like a fair trade for many, there’s no denying that in-house counsel generally have lower salaries than BigLaw associates. The average salary for an in-house position is $150,000-$200,000, while the average salary for first-year associates among the AmLaw 200 is $180,000-$200,000.[iv] And many first-year associates at BigLaw firms make as much as $215,000 a year, which goes up to $345,000 in the fifth year and $415,000 in the eighth year.[v] (On a brighter note, if you are able, after many years, to work your way up to lead in-house counsel, or general counsel, you may enjoy a salary in the $305,000 to $440,000 range.)[vi]
  • With higher billing rates and costs for outside counsel, in-house counsel are being asked to take on more work than before. According to a recent survey, corporate legal departments are spending 54% of their budgets in-house, which was around 50% last year and only 40% a decade ago.[vii] Much of what had been doled out to outside law firms is now falling on in-house attorneys because of what outside firms charge.
  • Despite less work being outsourced to law firms, a lot of work still is outsourced, and corporate legal departments must assume responsibility for managing relationships with outside counsel, which can be an onerous task. This entire process includes (1) discernment of what work actually needs to be contracted out, (2) finding the right firm for your needs, (3) creating and enforcing billing guidelines, (4) tracking law firm hours and spending, (5) paying invoices on time, (6) overseeing and reviewing the substantive work the firm is doing for you, and (7) communicating regularly with the firm’s attorneys.[viii] That’s a lot to manage.
  • If you decide that you would like to transition back to a law firm, it might be difficult to do so. Law firms looking to hire are more likely to view lawyers currently in private practice as safer bets, and in-house counsel—legal generalists who probably have allocated the most challenging work to outside counsel—may not have retained or improved their skills in specialized areas that firms are looking for.[ix]

Before rushing into an opportunity to become in-house counsel because of its appealing aspects, especially given the demands and unknowns of BigLaw, be sure to keep in mind the many challenges and issues that exist with going in-house.

[i] Association of Corporate Counsel. (2013, December). Becoming In-house Counsel: A Guide for Law Students and Recent Graduates. https://www.acc.com/sites/default/files/resources/vl/membersonly/InfoPAK/19654_2.pdf

[ii] Shang, E. (2018, November 28). 5 Things Under 30 Law Associates Should Do To Make Partner. Forbes. https://www.forbes.com/sites/evashang/2018/11/28/5-things-under-30-law-associates-should-do-to-make-partner/?sh=2cc849e825cd

[iii] Knockless, T. (2022, June 23). Turning Point: Legal Departments Bringing More and More Work In-House. Law.com. https://www.law.com/corpcounsel/2022/06/23/turning-point-legal-departments-bringing-more-and-more-work-in-house/

[iv] Vine Attorney Search. (2022, September 14). The Pros and Cons of Attorneys Going In-House: When Is It the Right Decision? https://vineattorneysearch.com/2022/09/the-pros-and-cons-of-attorneys-going-in-house-when-is-it-the-right-decision/

[v] Biglaw Investor. (2022). Biglaw Salary Scale. https://www.biglawinvestor.com/biglaw-salary-scale/

[vi] Salary.com. (2022, November 23). General Counsel Salary in the United States. https://www.salary.com/research/salary/alternate/general-counsel-salary

[vii] Weiss, D.C. (2022, June 22). Corporate legal departments spend more in-house than on outside law firms, survey finds. ABA Journal. https://www.abajournal.com/news/article/corporate-legal-departments-spend-more-in-house-than-on-outside-law-firms-survey-finds

[viii] Wen, K. (2021, December 6). 7 outside counsel management rules efficient general counsels follow. SimpleLegal. https://www.simplelegal.com/blog/outside-counsel-management

[ix] Barnes, H. (2022, May 16). Why Going In-house Is Often the Worst Decision a Good Attorney Can Ever Make. BCG Attorney Search. https://www.bcgsearch.com/article/900045115/Why-Going-In-house-is-Often-the-Worst-Decision-a-Good-Attorney-Can-Ever-Make/