Law Practice Management
Lawyer Layoff Surge is Hitting In-House Counsel Hard, Too
Posted Mar 23, 2009 5:41 PM CST
By Martha Neil
It isn't just BigLaw private practitioners who are getting the ax as corporations struggling to cope with the dismal economy cut legal expenses.
Many in-house corporate lawyers are being laid off, too, reports the National Law Journal.
"Name an industry where you've seen a significant problem, and attorneys are experiencing it along with everybody else," says Deborah House, deputy general counsel of the Association of Corporate Counsel. House points to automobile manufacturers, insurers and financial services companies as examples of hard-hit corporate sectors.
For the first time since 2003, the ACC's membership is declining, the legal publication reports. After annual increases of 10 percent in recent years, the membership roster has fallen off by 6 percent so far in 2009, although the ACC hopes there will be an upsurge of some 2 percent by September.
Those recently dismissed are allowed temporarily to remain members without paying ACC dues. Their ranks have increased by 50 percent over the past year, to 321, the magazine notes.
The watchword is efficiency, those in charge of corporate legal departments tell the magazine, and even highly skilled in-house lawyers are expendable if their work isn't essential to the company.
At E.I. du Pont de Nemours and Co., which is often looked to as a trend-setting leader in the handling of corporate legal matters, Andrew Schaeffer has had the job of cutting legal expenses by 10 percent.
There isn't any plan to lay off lawyers at du Pont, says Schaeffer, who is the company's managing counsel for operations and partnering. But he's shifting more work to law firms that offer lower rates. Often, they are smaller than BigLaw mainstays. They also tend to be in the Midwest.
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Comments
B. McLeod
Mar 23, 2009 9:58 PM CST
Indeed, the first and easiest cuts for general counsel to make lie in the substitution of more efficient, less-pricey outside firms.
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tim
Mar 24, 2009 7:13 AM CST
lol in house can’t go back to Big Law because they didn’t make the cut. They bash us Big Law on these boards and now they are laid off. Wonder what they will do now.
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B. McLeod
Mar 24, 2009 11:43 AM CST
I guess they’ll go to those smaller firms their former bosses are now hiring in place of Big Law.
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Debra Veoli
Mar 27, 2009 5:36 AM CST
Comment removed by moderator.
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EDC
Mar 27, 2009 5:42 AM CST
Why the hate for in-house? It’s decent money and a life outside of work. I did my summers as a corporate counsel associate and it was great. If I could do it all over again, I wouldn’t have given that up for more money.
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dr
Mar 27, 2009 5:48 AM CST
Maybe lawyers want to go in-house so that they’ll have responsibility to make an actual decision that carries consequences, as opposed to reciting regulations chapter and verse all day and never making an actual decision or having any actual responsibility.
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tom
Mar 27, 2009 6:21 AM CST
Talking to a friend yesterday at Big Law - 7th year attorney. He is looking for a in-house job. Asked him what his book of business was like. He said small. No wonder he is looking to go in-house. He can’t bring in bacon so he has to go get a peon job.
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Donald
Mar 27, 2009 6:38 AM CST
Having done both, I can tell you that most law firm associates can’t wear the jock strap of most in-house attorneys. Busier, more responsibility, greater political deft and dexterity, but fewer (normally) hours and more control over the workload. Of course, there are always exceptions on both sides. Personally, the reason I made the swtich after five years at a big firm was the fact I couldn’t stand managing my life in six minute increments. Perhaps being a slave like that doesn’t bother some, or maybe they find the reward is worth that burden, but I hated not being able to control my own schedule. Frankly, no one’s job is safe. Ever. Even in a good economy. The day you begin that entitlement mentality you’ve started a sorry slog downhill.
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dr
Mar 27, 2009 6:51 AM CST
The “bacon” that Tom referred to in his earlier message is controlled by an in-house lawyer. In-house lawyers decide which outside lawyers will get work or not. Because he evidently views in-house lawyers as beneath him, I’m assuming that Tom hasn’t had much luck finding clients and he probably doesn’t have a clue why. Does the saying “the hand that feeds you” ring a bell?
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Bill Dickey
Mar 27, 2009 7:00 AM CST
If In house is cool, how can one get in house?
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B. McLeod
Mar 27, 2009 7:22 AM CST
To get in-house? One way is to wait until a corporation is seeking to fill openings, and apply. Another way is to do such a good job on client matters that corporate legal counsel start contacting you to see if you would like to join their departments. The caveat one must bear in mind is that such a move comes with a necessity to hand off all other clients to your firm or other colleagues, such that thereafter, you have one (1) client. Your business risk will not be diversified, and in times of trouble, you may live in the office almost as many hours as in a private firm. If the company goes down, its legal department goes down, and the in-house lawyers have to start anew, with no client base.
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dr
Mar 27, 2009 7:32 AM CST
I agree with evertything that B. McLeod said. Plus, the base salary is significantly smaller for in-house lawyers. In good times, equity and bonuses can bring in-house lawyer compensation fairly close or even higher than their law firm peers, but, until the economy and market corrects, the equity value has all but disappeared and bonuses will be a fraction of what they were previously.
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doc
Mar 27, 2009 7:46 AM CST
Having been both in-house and law firm in 21 years of practice, I can tell you that I work just as hard in my general counsel position as I did when at a firm. I believe being an in-house attorney makes you a better lawyer if you later go back to afirm; you are better able to understand the business constraints of your clients and they trust you more when they know you’ve been involved on the business side. Also, an in-house counsel position gives you the unique opportunity to observe the client service that outside counsel provides, and learn from both the bad and the good. Like Tom, I have seen a lot of lawyers who seem to forget that I am the decisionmaker (aka “the client”) when it comes to working for my company.
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Bill
Mar 27, 2009 7:48 AM CST
Poor TIm. So naive. Don’t you realize that most GC’s come from partnerships or at least partnership tracks in BigLaw? Companies hire them because they need one person or a small team smart enough to make the right call and confident enough to actually have to live with the consequences without having to “run it past” four other people in the BigLaw firm with everyone billing the Company for “internal conferences”. The value of counsel from BigLaw is just often not worth the cost. Wake up…and grow up.
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Kasey
Mar 27, 2009 8:10 AM CST
tom, why do you consider the role of in-house counsel to be a “peon” job? I’d really like to know. Do you realize you’ve probably just insulted many of your clients? I have to echo EDC’s question—why all the hate for in-house lawyers? Is it simply this belief that in-house lawyers couldn’t cut it in private practice? I was “cutting it” so well that my current employer, which had been one of my clients for several years, asked me to come in house to help with several big M&A transactions that they were about to enter into. I would not have received that phone call, nor would I have kept them as a client for so long, had I been a incompetent attorney. The firm for which I worked was very good and treated me very well. But , I viewed my client’s offer as a once in a lifetime opportunity so I accepted. I now have the opportunity to work on many different and interesting legal issues. As added benefits, I am no longer stressed out about discovery and court deadlines, and I have more time to spend with my family. I am delighted with my decision
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Chuck
Mar 27, 2009 8:26 AM CST
I have outside firms begging and essentially bribing me and my co-workers for business these days. Kind of nice to hold the purse strings and have people come to me for money when a year or so ago, I was coming to them looking for a job and money.
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Marian
Mar 27, 2009 8:29 AM CST
After having had a job in government, as partner in BigLaw, and in-house, I continue to choose in house. I am often the first phone call for my clients (not the last to hear about a matter), most of whom are business people and not other lawyers. I provide sound legal advice for crucial business matters. I am valued for my practical solutions, based on real experience in the business AND DELIVERED IN REAL TIME. I do not write memos- my clients do not want them. They want fast, accurate answers. I am a valued member of the business team and a resource for creative solutions. I choose which matters I handle based on my interests and which I send to outside lawyers. And I am responsible for and set the strategy for my matters all of the time (as for the hours, I’ll stack my 15 hour days against those of outside counsel any time!). For those of you who have never tried in-house life, you should give it a whirl. That said, I have tremendous respect for all of the outside counsel who provide me with sound, practical, actionable advice. Maybe it’s time to recognize that we both have roles to play and we would all do better to support one another.
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Ned
Mar 27, 2009 8:49 AM CST
Oh Tom, Tom, Tom…Everybody is picking on you. For a good reason: You forgot who your clients are. I have been successful in-house, in business and in law firms. My success is based on the single concept of remembering whom I represent, placing that person and their department/company in the highest regard, and delivering my very best effort on their behalf. You would be wise to do the same.
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Kalifornia Arnold
Mar 27, 2009 8:55 AM CST
If an attorney chooses to work in-house, does that foreclose other legal options? (Just wondering)...
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Sparky
Mar 27, 2009 10:56 AM CST
Having worked for several years at two firms then several years in house, I can safely say that lawyers don’t go in house because they can’t cut it. They go in house because they want to work more closely with clients, to help advise on business decisions instead of just cleaning up afterward, and to spend more time actually practicing law than on the drudgework of billing and unnecessary memo writing. Most inhouse lawyers I know are much more business savvy and efficient in their work than firm lawyers and better at thinking on their feet, because they have to be. That said, we still find outside counsel invaluable when we encounter a highly specialized area of law, or we need someone with the time to engage in litigation. Like #17 said, each has its role, and can’t we all just get along?
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J
Mar 27, 2009 11:29 AM CST
I rattled swwords once with an inhouse. His employer was a jerk under the circumstances. But his duty was to his client
We settled w/o trial or extensive discovery, using phone conferences, etc.
Hiis client’s outside councel was a different matter.
BTW, someone must have respected him - he is martindale “av.”
We both parted having mutual respect after it was over.
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Avvo Fan
Mar 27, 2009 3:51 PM CST
Who uses Martindale or relies on its ratings anymore????
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B. McLeod
Mar 27, 2009 6:15 PM CST
My “coveted rating” has not been displayed since the year they sent me an invoice for $50, as though it were a sum I actually owed. I assume the administrative staff at many firms paid these not realizing they were not legit (I further assume that was the point). It is only with the greatest restraint that I have refrained from sending Martindale a bill for $50 each time I fill out and return one of their peer ratings surveys.
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Houston Lawyer
Mar 30, 2009 8:19 AM CST
Speaking as an in-house counsel who is also “AV” rated on Martindale-Hubbel (for what that is worth), BigLaw lawyers who think in-house counsel are somehow “less” are (1) going to have a hard time getting good quality legal work from those in-house lawyers; and (2) morons. I think I’ve said on here before that I feel disgusted by the pathetic assistance I receive at times from some supposedly top-notch law firms. It annoys the crap out of me when I hire someone to help me, and I have to explain fundamental principles of my area of law to them before they can do anything. I often end up doing a lot of the work myself, anyway, because when I ask them to advise me, they are incapable of telling me anything that I don’t already know. Occasionally, I will find a few who are truly outstanding, and those are the ones I go back to. So, BigLaw peons who say that in-house lawyers are somehow “less” and then slave away doing work that is never really going to give you the experience you need to truly serve your clients should keep their mouths shut about in-house counsel and their legal abilities.
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MommyEsq
Apr 2, 2009 12:21 PM CST
I also work in-house for a company that specializes in one of the hard-hit areas of our economy. I am glad that I work in-house and not for outside counsel because so many firms in my area are cutting jobs. Instead, we just cut the use of outside counsel! Sure, it’s made my workload heavier but none of the projects are difficult. I just didn’t have time to do them myself before and keep my nice 8:30-5:30 schedule. Now I work longer hours, but at least I’m employed.
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