GPSolo Magazine - September 2004

Business And Commercial Law Are You In Or Out?

From in-house to law firm. From law firm to in-house. It’s two different worlds out there. We set out to make things clearer by talking to people who’ve been there.

Arthur Chaykin was in-house counsel at Sprint. He’s now of counsel at Polsinelli Shalton & Welte. “In-house counsel think that outside lawyers are running up the bill. Outside lawyers don’t think that in-house lawyers see the problem and aren’t handling it correctly.”

So does this mean there’s a bit of friction here? Let’s check with Mike Halloran, who says he was the “top person at the legal department at Bank of America for seven years” and is now senior partner of the corporate securities and finance section at Pillsbury Winthrop:

“In this day and age, you would probably be better not to be at a private law firm unless you’re interested in business development. The practice of law in a private firm has become very competitive, and your success there is dependent in part on your ability to market your legal services and your firm’s legal services and to further develop business once it’s brought in. That skill is less of a factor in-house.”

Is it all about pressure? Let’s hear from an expert in back-and-forth. Bill Ide is a former president of the American Bar Association. This is how he describes his career path: “I clerked, then went with a law firm, then started my own law firm, then merged with a larger firm, then went inside with EFHutton for four years, then went back outside, then went inside to general counsel at Monsanto for five years, then back to McKenna, Long & Aldridge in Atlanta.”

Ide had this to say about pressure: “The ones in the law firms are more adventurous; they like to be on the high wire without a net.”

To be fair, some don’t quite see it that way. Carla Stone Witzel describes her career this way: “Out-house, then in-house, then out-house. I think too many out-house lawyers have a too-elevated view about where they are in the pecking order of life. Out-house lawyers think too highly of their contribution.”

That contribution might be summarized as the constant search for clients. Chaykin again: “Being in private practice is fundamentally an entrepreneurial activity. The competition for business has gotten extremely vigorous. That whole mindset of client acquisition doesn’t exist in-house.”

The top legal person at Gap Inc. is Anne Gust. She seconds that concept of competition: “Most everyone I’ve met who’s gone in-house would never want to go back to a law firm. The environment in law firms these days has become very competitive. Their product is in hours. You’re constantly thinking, ‘Can I bill someone for that?’” Gust was on the verge of being named partner at a firm before moving to Gap.

On that drive for billable hours, we checked with John Liftin, now the legal boss at Prudential and earlier a partner at Rogers & Wells. “Any time that you’re not billing time at a firm, you feel a slight twinge of guilt about whether you’re really using your time productively.”

But aren’t there some drawbacks to life inside a corporation?

“The challenge on the inside is to maintain your independence.” At least that’s the way Ted Levine sees it, and he recently retired as chief legal officer at UBS PaineWebber. He had been a partner at Wilmer, Cutler & Pickering for nine years. “When you render advice and you’re dealing with crises, it’s hard when you have to take on management. On the outside, it’s easier to do that.”

Back to Chaykin: “One of the disadvantages of being in-house is that you don’t get the breadth of exposure to other lawyers.”

So what are we saying here? Is in-house easier? Not such a push for billable hours? Chaykin: “I work the same number of hours both in-house and outside.”

Any such discussions are in danger of being academic if the subject of “compensation” isn’t raised. When lawyers say, “Show me the money,” what are they talking about with respect to in-house and law firm work?

Times, apparently, have changed. Prudential’s Liftin: “In-house jobs are considered more desirable than they were 20 years ago. Twenty years ago, it would have been
unheard of for a partner in a law firm to accept an in-house position. Now it’s very easy to attract lawyers even at the partner level because of the inherently interesting nature of the work and the enhanced compensation structure.”

The experienced Bill Ide sums it up: “Regarding compensation, over time, you’ll do just as well inside as outside.”

But is money all there is? Maybe there are other things in your life. Do you enjoy going to work? We didn’t find voices defending the law-firm work ethic. Some examples:

Gust (in-house): “You work harder in law firms. The focus on billable hours makes it very difficult. Here in the company, you realize that everything you’re doing is part of your productive work. Last Saturday, I couldn’t find another person here. It’s not part of the culture the way it is in a law firm.”

Ide (in a firm): “Inside, the balance of life is clearly better in general. Law firms are way behind major corporations in the way they manage people; they don’t invest in them. You have to have a particular kind of personality and independence in a law firm. Law firms should be doing a better job investing in their people.”

Balance of life? Kind of sounds like “family.” One of the younger persons we spoke with was Damon Elmore, in-house with an Atlanta company (and before that in a law firm). This is how family affected his work and the other way around: “It would be hard not to mention the quality-of-life issues. I get to work in time so that I can get home and see my daughter. If I need to leave early, I can. I try to do an eight-to-six day. That’s enough time to get everything done.”

So here we are, at last. The matter of “quality of life.” That seems to matter more to the women that we interviewed.

Gust mentioned that she had no children herself, but felt that “generally, in-house is more conducive to a woman having more control over her life. Balance is more possible.” After all, even firm-man Ide said that, “for women, pregnancy leave is more prevalent in-house.”

The subject isn’t cut and dried, however. Witzel is not in-house now and has two children. She frames the issue this way: “I feel that there may be more flexibility in a law firm. The normal assumption is to go in-house and you’ll have more time with the kids; I’m not sure that’s true. Because of the travel requirements in-house, I thought I was spending less time with my family. Out-house practice is not as onerous on young families as the typical perception has it.” She added, “In both private practice and in-house, men feel less driven to have more time with their kids.”

Is it possible to sum up these two warring worlds? Nah. But we hope we’ve given you a few things to think about.

Ray DeLong is editor of Business Law Today . He can be reached at delongr@staff.abanet.org.

for more information about the Business Law Section

- This article is an abridged and edited version of one that originally appeared on page 47 of Business Law Today, March/April 2004 (13:4).

- For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221.

- Website: www.abanet.org/buslaw/home.html/.

- Periodicals: Business Law Today, bimonthly magazine; The Business Lawyer, quarterly law journal.

- Books and Other Recent Publications: Corporate Director’s Guidebook, 4th ed.; The Portable UCC, 4th ed.; The Portable Bankruptcy Code & Rules, 2004 ed.; Fund Director’s Guidebook, 2d ed.; Guidebook for the Directors of Nonprofit Corporations, 2d ed.; Managing Closely Held Corporations: A Legal Guidebook; Prototype Limited Liability Partnership Agreement; Model Asset Purchase Agreement with Commentary; Model Business Corporation Act, 2002 .

 

 

 

 

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