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5 Things to Consider Before Moving In-House

September 29, 2014

Pam Craven CW’74, L’77 was kind enough to share “5 Things” she recommends attorneys consider before moving in-house. Pam began her career in private practice and has worked in house at NCR Corporation, AT&T, Lucent Technologies, and most recently as General Counsel and Chief Administrative Officer at Avaya Inc. Sandra Fears L’95, Senior Legal Counsel to CVS Health, also contributed to this post.

So You Are Thinking of Moving In-House

During the course of their careers, many lawyers consider moving from a law firm or government agency to a position in a corporate law department. Corporate law departments can offer an exciting legal practice with both depth and breadth, and the opportunity to become a trusted advisor to business teams and senior executives. While corporate practice has similarities with law firms and government legal organizations, there are important differences that you may want to consider before you make the move in-house. Remember to take these differences into account as you adapt to your new situation.

One: Is corporate practice a good match for you? Understand your rationale for considering an in-house move and whether corporate practice will conform with your expectations.

I usually cringe when a law firm lawyer tells me in an interview that he wants to move in-house to make a “life style change.” In fact, in a corporation you may work just as intensely, only differently. As a starting point (see point 5 below), you are supporting, in essence, a single client, although you may work with a number of “client” divisions and functions within a corporation. Variety and novelty derive from the broad array of legal problems and projects that you may confront — depending on the size of the corporation and its in-house legal team — since many corporate law departments offer fewer positions with a high degree of specialization. You may need to be open to “on-the-job” training or “learning while doing.” For example, an employment litigator may be asked to handle commercial cases; an M&A attorney may be asked to take on customer deals; and a patent lawyer may be assigned other IP work.  Some lawyers find this exhilarating and welcome the opportunity to cross-train and assume larger management roles supervising other attorneys. For others, it is highly stressful. Also, corporations have their own pressures to grow revenue and improve profitability despite greater burdens from regulation, compliance, technology shifts, new competition, and other external forces. Regardless of the corporation’s profitability or stock price, all “support” organizations such as Law, IT, Finance, HR, and Logistics must do more with less, while the demands on business people to release product, close deals, and meet financial targets mean that the in-house lawyer may be stretched to serve more business clients who are strident about timely response. 

In most in-house jobs, you will need to be adept at providing quick, sound advice when you haven’t had an opportunity to thoroughly research the legal issue or all the facts and circumstances that led to your client’s solicitation of your opinion. As one litigation transplant explained to me: 

When I first made the transition from law firm to in-house, I needed to adjust my risk tolerance and develop confidence providing advice based on imperfect information. As outside counsel, I had become accustomed to knowing everything about my cases and making decisions only after performing an in-depth analysis.  But as an in-house lawyer, you don’t have the option of taking discovery and pondering issues for days.

Moreover, the concept of being available anytime and anywhere applies the same as in a law firm — perhaps even more so. You may be interacting with colleagues and business teams in radically divergent time zones (e.g., you are in California, and your client is in Berlin), so while you may not contend with the pressures of rainmaking and billable hours, you may work no fewer hours, just different hours!

Two: You’re not just joining a law department, you’re joining a business.

To turn an old saying on its end: you’re not just marrying your spouse; you’re marrying the whole family. Many lawyers find “being close to the business” one of the most satisfying aspects of in-house practice. At the same time, it’s important that you engage in due diligence before you accept an offer. Research the industry, products, position of the company in the market, financials, reputation, and so on. For a public company, much can be gleaned from SEC filings and even a private company may have public debt; in both cases, the company may be covered by financial analysts. If the company is private, gain as much knowledge as you can from articles, advertising, etc. Arrive at your interview with questions that demonstrate that you have informed yourself about and are interested in the company. Once in the interview, try to explore more subtle issues such as the company’s culture and attitude toward risk and compliance. If it is privately held, how do the owners manifest their influence over the company? Many corporate law departments ask their business clients to participate in the interview process, and this is a great opportunity to learn about the operating structure and style of a company. We’ll talk in point 3 about what you want to learn about the law organization.

Once you are on board, invest time in learning about the company — its customers, competitors, strategy, business model, risk areas, processes, and so on. Be humble: ask questions; request product demonstrations; ask to visit a service center or retail store, lab, or manufacturing location; accompany sales and services calls with customers. Get to know the in-house client group that you will support. Ask to attend staff meetings. In many companies, the pace is so rapid that you will need to be in on a project at its very inception or you will be playing catch up and unable to influence the course of action. The ability to “get in on the front end” versus arriving just in time to fix the problem is something that in-house lawyers relish. To do this, build relationships from the outset and be included at the planning stage. Remember too that your business clients will look for you to be a member of the team. So, while this has its limits — see point 5 — you cannot simply relay advice in from the sidelines; you need to be on the field to help deliver the desired business result.

Three: Are you joining THE Law Department?

Corporations have many different organizational structures for the business and law department. Before you join, ask how the company is structured and where the law organization fits in that structure, as well as how your own position fits into the law organization. For example, a company may be a conglomerate with very separate subsidiaries grouped under a holding company. Or it may be organized geographically or according to lines of business that are separate to differing degrees but share common support resources. The structure may be reflected in the law organization, e.g., each subsidiary may have a separate law organization that reports not to a general counsel but to a business leader. Or, the lawyers may have “dotted line” (in short: input, but not power to hire/fire) reporting to a business leader but report “solid line” (power to hire/fire) to the general counsel. These relationships may be relevant to such matters as: who reviews your performance, who decides key legal issues needing senior level approval, how cross-functional projects are led and managed, and your opportunities to move among different parts of the law organization to broaden your experience and potential for advancement. Does the legal leader report to the CEO or to another staff officer, such as the CFO?  If you are a tax attorney or IP attorney, are you part of the legal organization versus Finance or R&D, for instance? Where will you be situated physically: in an operating facility, at headquarters, or in a “virtual office” (VO)? If you are remote from your supervisor or the legal leadership, how does the department encourage collaboration and collegiality? How does this affect career opportunities? Particularly if you are considering a position in a privately held or smaller company, or one that has not had in-house counsel, you will want to know about the relationships between executives and outside counsel: will executives make their first call to the in-house legal leader or to the outside lawyer? Last but not least, try to ascertain how the law organization is perceived: is it valued, respected, and considered an integral part of the organization? Ask about this in any interviews with business people: do they describe the lawyers as the “deal prevention team” or as partners who help them accomplish business objectives while appropriately balancing risk? Which brings us to point 4.

Four: “Never say ‘no’ without offering another solution” and other axioms of in-house law organizations.

The vast majority of in-house lawyers work in mid-sized (under fifty lawyers) to small law departments and may be serving multiple in-house client groups as well as interacting with more senior level executives than they may have encountered as associates in a law firm. In-house lawyers typically are on the front line in delivering business results — contract negotiation, commercial, employment and other litigation, regulatory compliance, licensing, leases, marketing, joint development, procurement, acquisitions and divestitures, labor relations, executing on business restructuring, intellectual property, etc. While they do counsel on longer-term and strategic projects, their bread and butter is in delivering advice and work product that is of high quality, risk-balanced, comprehensible to the business client, and — ultimately — actionable. Among the not atypical feedback received from business people about transplants from law firms or a government agency: “She takes too long”; “I don’t have time to read a 10-page memo”; “He has not taken the time to learn about my business”; “She is too conservative”; and “He tells me what I can’t do but not what I can do.” Of course, it takes some time to understand enough about a business to know, for example, whether a more expanded assumption of liability in a contract is of low risk because the product is well-established and has a low failure rate or whether the departure of an engineer to a competitor is a serious threat warranting litigation in a jurisdiction that disfavors restraints on employment. What is critical is to talk with your business client about the areas of risk, the probability and possible magnitude of exposures, and alternate approaches to achieve the desired business result. Ultimately, most legal decisions devolve to business decisions, whether they are contract terms, litigation strategy, response to a regulatory investigation, crafting an SEC disclosure, exercising a contractual remedy, etc., and it is important to engage with the business owner in that decision process. Which dovetails nicely with point 5.

Five: Never forget that there is only one client: the corporation.

Many business people regard themselves as the “client” of the in-house lawyer, and this construct works most of the time. As noted, in-house lawyers can have a close association with the business, in which they are regarded as enablers versus preventers, are enlisted well before the front-end of a project, are able to help steer around legal risks and impediments because of their early involvement, and enjoy the satisfaction of achieving the business objective. While there are some business people who will want “only your legal opinion,” many more recognize that the lawyer offers an objective perspective; has a cross-functional vantage point that can help coordination with other organizations; can mediate among competing organizations within the company; and is trained to ask questions, discern the facts, and provide reasoned answers. All of this can lead to better business outcomes. Of course, the lawyer occupies a special place under rules of professional responsibility which may require special attention in certain circumstances. For example, New Jersey Rule of Professional Conduct 1.13(a) states in part: “A lawyer employed or retained to represent an organization represents the organization as distinct from its directors, officers, employees, members, shareholders or other constituents.” In addition, a lawyer must take care to make clear when she is offering a business versus a legal opinion as the former will not be subject to attorney-client privilege. Lawyers investigating possible wrongdoing will need to make clear to co-employees that they represent the corporation and not the employee; the lawyer may have a statutory or other obligation to escalate to senior legal leadership or even the board of directors on becoming aware of something inimical to the interests of the corporate client even though it may advance the objectives of a particular business. The special relationship that in-house lawyers have to the corporation can actually deepen, rather than limit, their role as counselors who occupy a position of trust, whether advising a board of directors on response to a hostile takeover bid or a Human Resources manager handling a complaint of sexual harassment, and overall lead to a rich and satisfying career for the law firm lawyer or government lawyer who transitions to in-house practice.