Deputy Managing Partner, Heather Cantua Phillips (center), was former AGC at Unison and corporate counsel at LendingClub prior to building a thriving practice at Scale LLP.
For years, many talented lawyers have opted out of the traditional law firm path and pursued an in-house career. Over the past 40 years, in fact, this trend has accelerated. In 1980, an estimated 10% of American lawyers worked in-house; today, more work in-house than at large law firms. But for those considering a move back to private practice, the time may be now.
For decades, as American businesses have grown in size and complexity — facing more regulation, competition, litigation risk, and other issues — the need for sophisticated in-house capabilities has continued to increase. The attraction of in-house legal jobs has also steadily grown over time. Credit the push-pull effect of the increasing prominence of in-house work, on the one hand, with the declining luster of traditional law firm life on the other.
Professor Eli Wald, of Sturm College of Law at the University of Denver, reports that over time the rising prestige of in-house roles captured the “professional aspirations of dissatisfied Big Law lawyers,” causing more and more talent to make the move.
In-house legal jobs also historically offered more accommodating schedules along with the opportunity to gain valuable business experience. And many in-house lawyers used that business experience to transition to non-legal executive roles (Bank of America CEO Brian Moynihan is just one example). In addition, the potential to achieve significant financial payoffs from venture-backed companies being sold or going public created even more demand for top in-house roles over the past 20 years.
Now though, the calculus may be changing. The demands on in-house legal departments have increased, with departments expected to manage more risk and greater workload with leaner headcount. At the same time, economic uncertainty has placed greater cost pressure on departments and diminished the potential for a financial exit in many cases.
In the wake of the pandemic, in-house lawyers, like other professionals, are reconsidering their career options. In a recent survey, Wolters Kluwer found that 70% of in-house attorneys are considering leaving their current position, and 86% of those cited the pandemic and the “great resignation” as having a significant effect on legal departments.
But in-house lawyers considering a move may be reluctant to make the jump because of two concerns that have historically factored into this decision: the burdensome hours and facetime requirements at big firms, and the need for a portable “book of business.” Both of these concerns, however, may be outdated.
For one thing, private practice has evolved. A greater variety in law firm offerings–remote work, better economics, and an emphasis on in-house experience–means in-house attorneys now have more options. At Scale LLP and other remote-first firms, attorneys are encouraged to define success on their own terms, work when and where they want, and leverage the invaluable experience they gained as clients in corporate roles to build a rewarding practice.
The “book of business” myth is also overdue for a reckoning. For years, firms have blindly relied on this concept to screen applicants, but the “portable book” concept has rarely been tested as a means for attracting talent to firms. Indeed, it is inherently problematic. For one thing, the practice of posting portable book requirements tends to attract attorneys willing to say they have the business, while at the same time discouraging attorneys willing to give an honest appraisal of their work. It should come as no surprise that women and underrepresented groups are more likely to fall in the latter category, compounding BigLaw’s already woeful record on diversity.
What’s more, the reality is that business is not portable; talent is. Success in private practice comes from networking, not necessarily from moving a “portable” silo of work from one firm to another. Adding new talent to a firm allows the organization to expand existing client work by leveraging new skills to grow those relationships. And a new attorney’s own clients can be introduced to others at the firm who offer a broader range of capabilities in return. Applied to the in-house lawyer, it’s easy to see how an attorney with client-side and business experience, contacts in an industry, and highly specialized legal skill would succeed in a law firm environment. In-house lawyers can and do grow firms’ existing client work in this way, while also providing access to new opportunities. Building a practice takes time, to be sure, but it is more likely to flow from skill and networking than promised work from new or existing clients.
“The thing most in-house attorneys don’t realize is this: from a skills perspective, and even more importantly from a network perspective, they’re starting well ahead of the pack,” says Scale LLP Founding Partner Adam Forest. “In-house lawyers understand the pressures of business and how to right-size risk better than outside counsel. Full stop. And senior in-house lawyers — unlike most lawyers in private practice — have been able to show their quality in front of business leaders who are capable of hiring them. In other words, they have a ready network of clients who know and trust them the day they start their practice.”
Scientific studies of human networking confirm this idea. Marissa King, Professor of Organizational Behavior at the Yale School of Management, confirms that innovation and networking are inextricably linked: “Success in the service economy is dependent on the human element: picking the right staff members and motivating them correctly.” Malcolm Gladwell and others have emphasized the importance of networks over hierarchies, too, and these human connections at organizations–including law firms–have only become more important in a remote-work, post-pandemic environment. Author Keith Ferrazzi writes about professional relationships and networking. In “Never Eat Alone,” he says the primary drivers of network-building require both giving and receiving: “connecting” with other professionals is a constant process of “asking for and offering help,” he says.
Remote-work law firms have attracted talent by creating an alternative to the traditional law firm model. And by focusing on talent, rather than solely relying on outdated notions of the “portable book,” new firms are recruiting and retaining lawyers who can seed and grow networks. In-house specialists with powerful industry connections and skills learned in real business environments easily fit this model.
Lawyers with in-house experience have a lot to offer law firms. And firms that emphasize a shared mission and core values — including a collaborative commitment to the success of every attorney in the network rather than antiquated “portable book” requirements — may offer a new alternative for in-house attorneys. For those looking to make a change, now may be the perfect time.
