So You Want to Go In-House: What Attorneys Need to Know

By Scott D. Schneider

Countless law firm attorneys suffer from a persistent and often vague dissatisfaction with their everyday work lives. While some simply toil in Thoreau’s “quiet desperation,” many pine for the proverbial “cushy” in-house gig as the cure to all that ails them. As someone who made partner in a big law firm, then left to go in-house, only to return to big law practice, I have what I suspect is a unique and informed perspective on what attorneys should consider prior to going in-house, as well as some thoughts on the skills required to be an exceptional in-house counsel.

Outside Counsel vs. In-House Counsel

Without question the most alluring part of going in-house is saying goodbye to the seemingly never-ending tedium of billing hours and/or the perpetual pressure to generate business. And truth be told, there is much to be said for this. Work lulls for private practice attorneys are rarely enjoyed and often merely create anxiety as billable hour or revenue targets are not met. This cycle of “too much work, or worrying about lack of work” is vicious and undoubtedly takes a toll on quality of life. Along these lines, business generation can be unseemly and is considerably more art than science. For instance, whether you get to represent a client on a piece of litigation is largely outside of your control except to the extent you are giving your client advice that consistently gets them sued (which seems like a potentially problematic business model).

In contrast, in-house counsel do not have to hustle constantly for business and can actually enjoy work slowdowns. However, at least in my in-house experience, the work lulls were few and far between. Business people respond to economic incentives. The primary disincentives for clients to call you in private practice is that they are typically going to get a bill for each six minutes they are on the phone with you. This economic disincentive does not exist in-house, and the “reward” is that you get more in-person meetings, more phone calls, more uninvited office visits, and a seemingly never-ending stream of requests for “stakeholder meetings.” Despite the ubiquitous lawyer jokes, it turns out that people apparently really like getting the opinion of attorneys on a broad host of issues (especially when they don’t have to pay for the advice). Often for in-house counsel, these issues have very little, if anything, to do with the law. More cynically, sometimes you are simply being consulted so that when things go horribly wrong, the business culprit can avoid culpability by saying, “I consulted with legal.”

At the same time, the persistent buzz of phone calls and meetings leave in-house counsel in a constant state of distraction, pulled in countless different directions, and rarely having the opportunity to do a deep-dive on significant legal issues facing the client. Generally speaking, I found my in-house work days to be frenetic, leaving me leaping from one minor issue to another, and requiring me to put out the unpredictable but inevitable fires that would spring up on a daily basis. The days I could really focus on one significant project were few and far between, which could be an enormous source of frustration. There were also no associates or paralegals to delegate work to, nor a secretary I could instruct to screen my calls.

From a functional perspective, in-house lawyering is also fundamentally different from serving as outside counsel because in-house counsel have to live with and are stuck with their clients. As outside counsel, I have a certain latitude to criticize a particular department or manager because I generally do not have to deal with the personal or professional fallout of excoriating a colleague. If I do not like how a client operates or they repeatedly fail to heed my advice, I can fire the client (or the client can fire me) and I can hopefully move on to working with other clients. Life is more complicated for in-house counsel. You have one client, and you cannot fire it. If the client fires you, you are unemployed. Criticizing a department head or telling an operational person “no” may be greeted with hostility or recalcitrance on other mission-critical projects (or at the very least “lost” invitations to the corporate holiday party). Put simply, in-house counsel typically have to navigate through considerable internal politics when doing their jobs—a burden outside counsel are largely immune from.

Along these lines, for large in-house departments, interesting issues of who gets promoted and why abound. The role of counsel within most organizations is to be, as coined by renowned legal ethicist Donald Langevoort, the “voice of the cognitive independence” or, put in a less pedantic way, to occasionally say “this is a terrible idea.” Approximately a month after I started working in-house, the general counsel whom I reported to told me, “I’m hearing great things about you . . . and this concerns me.” I was initially confused and miffed and was not sure if my boss felt threatened by my keen legal skills. Over time, I came to realize there was some wisdom in her concern. Namely, it is easy to be the popular in-house attorney by saying “yes” to every stupid idea your client suggests. Of course, counsel are often in the role of having to be the bearer of bad news. Having a clear sense from the business personnel about how they are going to evaluate your effectiveness is a critical concern when deciding whether to make the jump to an in-house position. Is the client looking for a “rubber stamp” from legal or will they appreciate your doing your job and providing the occasional bad news that effective counsel occasionally requires? Being popular and being a good in-house counsel sometimes do not go hand in hand.

Similarly, for better or worse, the metrics for success within law firms are generally clear. You are a “minder, grinder, or finder” or some combination of the three. You either hit your hours or you do not. You win the case or you do not. You hit your revenue goals or you do not. Defining individual success for in-house counsel is considerably more complicated, and often ambiguous and qualitative judgments about your performance are made by business personnel who may have a very limited understanding of what good lawyering entails (and that is being charitable).

One of the more frustrating aspects of working in-house is that it is difficult to be a “prophet in your own land.” I have heard from countless in-house counsel that they have made recommendations for years that were only adopted when an outside consultant or external counsel was paid a considerable sum only to say the exact same thing they had been saying. This was my experience as well, and it is maddening and requires constant ego checking, especially when you are coming from a situation when you used to be that highly compensated big-firm prophet.

Finally, generally speaking, it bears noting that external counsel are making more money than their in-house peers and generally find it easier to secure other employment opportunities. Some in-house colleagues get rich on stock options, but at least in my experience, that is rare. The time for maximum leverage in negotiating an in-house salary is upon hiring. From there, most in-house counsel can expect at best small 2 percent to 3 percent pay increases every year.

Necessary Skills to Be a Good In-House Counsel

With the above discussion as a backdrop, what are the skills attorneys need to be good in-house counsel? I will offer a few suggestions.

It should go without saying that in-house counsel have to spend quality time understanding the business and industry they are working in. Knowing the issues you need to pay special attention to is often a product of what has the most potential to cause financial, reputational, or brand damage, which, in turn, requires an understanding of how your company operates and makes money, and/or the compliance risks prevalent in your industry.

Lawyers have their own awkward patois, and for the most part in-house lawyers are effective when they stop talking like lawyers. The ability to speak like a normal human being, or at the very least to condense complicated legal concerns into layman’s terms that your business partners understand and appreciate, is essential.

Similarly, the ability to simultaneously juggle many high-pressure situations is a significant prerequisite. I would add that in-house counsel generally have to multitask, make recommendations quickly, and frequently give counsel with considerably less than complete information. Many of the decisions in-house counsel are consulted on require lightning-quick turnarounds, and the lawyer who will only give advice when he or she knows all the facts is typically a lawyer no one turns to in times of acute need. Some lawyers are uncomfortable with practicing this way and, consequently, may not be well suited for an in-house role. Along these lines, the ability to be humble and flexible and pivot when new information comes to light or when it is clear your initial advice was not correct are critical skills.

This humility also comes into play when assessing when it is appropriate to retain external counsel. There are certain instances where exceptional in-house counsel understand their limitations in a given subject area (mine were intellectual property and taxes) and know that it is in the best interests of their client to consult with an outside expert. Similarly, there may be times when the volume of work is so overwhelming that outsourcing becomes necessary so that nothing slips through the cracks. Finally, there are strategic reasons outside counsel often need to be retained (e.g., the “prophet in your own land” theory mentioned above, or perhaps as a “CYA” on an especially difficult decision). Regardless, exceptional in-house counsel are not threatened by the prospect of having to involve external counsel at appropriate times and for appropriate reasons. On the other hand, in-house counsel need to be confident in their counsel. In-house attorneys who are always consulting with external counsel may ultimately have a difficult time justifying their existence.

Finally, for all the reasons mentioned above, there are particular political or “emotional intelligence” skills that good in-house counsel must possess. In-house counsel can certainly not be effective over the long haul by saying “no” to everything. They also cannot be viewed as the person that needlessly bogs down every business project. Indeed, such an approach will ultimately undermine counsel’s role within an organization as stakeholders will simply learn to avoid seeking legal advice and often will move forward without the benefit of counsel.

Of course, there are times when it is a lawyer’s job to say, “No, you can’t do that.” The perils of the popular attorney who says “yes” to everything are well chronicled in various scandals that have led to the downfall of corporations or the jailing of chief executives. With that said, effective in-house lawyers know how to say “no” in a way that helps clients understand the “why.” They also typically work diligently to follow up their “no” with creative alternatives that facilitate the client’s business interests without running afoul of the law or taking on undue risk.

This willingness to understand business objectives, explain in layman’s terms potential risks, and take the time to offer a solution that meets the business objectives while managing risks is time consuming and occasionally tedious. But when done often enough, it earns the trust of business partners and ultimately helps in-house counsel be successful in their role.

Scott D. Schneider is a partner in the New Orleans office of Fisher Phillips LLP, where he heads the firm’s Higher Education Practice Group and is a nationally recognized professional on higher education legal issues and institutional response to sex assault. He has litigated on behalf of education institutions around the country. He is also a professor at Tulane University, where he teaches courses in both the law and business schools on, among other things, higher education law and labor and employment law.