[TRANSCRIPT] The 'Dark Side' of Going In-house

Okay. So, we're going to get started. This week's webinars, this particular topic is a very important topic actually because one of the things that happens is a lot of attorneys make a decision many times to go in-house and when they do it can be, in many cases, a very bad decision.

 
In some cases, it's a good decision, but in other cases it can be a very bad decision. So today I'm going to go over some of the reasons that going in-house is not necessarily everything it's cracked up to be. I do have another article that I've written that's not based on this precedent, it's based on this article, but it goes in a lot more depth and it's called "Why Going In-House is the Worst Decision Any Attorney Can Make."
 
And that's also something you may want to look at. Now I'll say at the start that I do make in-house placements, so I'm not saying it's necessarily a horrible thing for everybody, but there are significant problems with it. So, what I'll do is the presentation; this isn't a super long presentation, but there is a bit of depth to it.
 
And then afterward, I'll take questions, and we can take questions about this or any other kind of career questions that you have at the end of the presentation. And with that, I guess I'll just get started. I'm going to talk to you today about insights about whether or not you should go in-house. I'm also going to talk to you in some depth about, if you're in-house, potentially going back, and at the outset, it's important to understand that a lot of attorneys believe that going in-house was a very good decision for them. But a lot of them believe the opposite.
 
And I say that for the past 20-plus years, I've been reviewing hundreds of resumes every day. One of the things that I see is there's definitely a difficult pattern that emerges for a lot of in-house attorneys. Some of them wind up in very good companies, but for the most part, what happens is when someone goes in-house, they'll typically bounce around to several different in-house jobs for a long time.
 
And sometimes they will be general counsel of a company. But the thing to remember is that there's a lot less stability in any in-house position than there typically is in a law firm, if you play it out and get business, because you're a cost center and your job is dependent on the success of the company, whether or not the company is able to stay in business and then also the management of the company.
 

---

See Related Videos:

• Why Law Firms Should Rarely (if Ever) Hire Lateral Candidates Coming from Practice Settings Other Than an Organized Law Firm 
• Why Going In-house Is Often the Worst Decision a Good Attorney Can Ever Make
• Why Law Firms Do Not Like to Hire Attorneys From Most Practice Settings Other Than Law Firms
• Challenging Prestige Perceptions in Different Legal Practice Settings

---

So, there are problems many times with going in-house, and in my opinion, it's an extremely significant decision. Many people go in-house when they would probably be better off just going to another law firm. Honestly, it's probably among the most significant decisions that most attorneys will ever make.
 
It's that important and drastically affects your future and it could do so in a positive way. If you wind up in the correct in-house position, you often are going to be much happier and won't have the same pressures, but at the same time, it can be very dangerous.
 
So, what does going in-house mean? Most attorneys typically have three different categories of jobs they can choose from: they can work in a law firm, they can work for themselves, which I guess is similar to working in a law firm, or they can work for a company or a public interest, or you could also say the government and just different types of legal environments that typically aren't charging the public for the services.
 
The problem is when you work for a company, the company's main business is not practicing law. You're basically taking the skills that you may have learned somewhere else and working inside the company. And that's just how that job works. Different in-house jobs have different responsibilities.
 
Some of them will deal with corporate law, mergers and acquisitions, some deal with litigation, real estate, healthcare, and other practice areas. If you're in a large company, you tend to be working on smaller matters, more discrete matters. You'll work on one aspect of tax law or one aspect of mergers and acquisitions in a larger company.
 
The same thing with patents and intellectual property and real estate. In smaller companies, you may work on multiple different practice areas, and you may be a Jack of all trades in a smaller company. You may handle things for the company founder, their personal matters, and pretty much everything that the company does.
 
In that situation, when you're doing a lot of different things, some people may enjoy that. But typically, in all in-house positions, the important thing to understand is that if there's a serious matter that the company's facing, or regardless, typically a law firm will be brought in. As an in-house attorney, you're doing the work that they don't think is serious enough to bring in a law firm. If anything gets sophisticated, you're typically pulled out and someone else is given the work to do.
 
The reason a lot of attorneys go in-house is because, depending on where you work, you could have much shorter hours. There are companies that, if I drive by at six o'clock at night, they're practically empty and they might have hundreds of people working there. I'm thinking of one big software company with a huge office park, and you drive by at six and they're gone.
 
A lot of people will enjoy working in an area where there's a lot less work. That doesn't mean you're not working at home and on the weekends, but the hours can be shorter. The work can be more predictable and routine. Many times, if you go to work at a really good company, you can get very good stock options and make a lot of money.
 
I've known attorneys that have made several million dollars. It's very rare to make more than that, but it's not uncommon for an attorney to go to an in-house company and have stock options that are worth two to three million or even more within a few years and then cash out and have other options. That can happen. It doesn't happen that often, but it happens with enough frequency that you can actually say it's a real thing.
 
Also, you're on the business side of things. When you're on the business side of things, that means you're interacting with the CEO, you're interacting with business people and helping the firm make decisions that are going to be more profitable for the company. But at the same time, you may not be liked a lot if you are getting in the way of the firm making money and so forth.
 

---

See Related Articles:

• The 'Dark Side' of Going In-house
• Going In-house? Why You May Be Saying Goodbye to Law Firms for Good
• Is an In-House Job Right for You? Top 10 Frequently Asked Questions About In-House Careers
• What it's Really Like as an In-House Attorney: Don't believe Everything You've Heard

---

There are just issues with that because attorneys' jobs are typically to counsel employers, the people that they're working for, and help them avoid problems. For you, it may be a good idea, but there are a lot of factors that you need to understand about going in-house that may make it a very bad career move. I just hate to say this because there's really so much to going in-house. So many people make the decision of going in-house without realizing a lot of these big mistakes.
 
The first thing is, once you go in-house, it's pretty difficult to get a law firm job. I review resumes all day long and I have been for 20-plus years. When I review resumes, if I see someone that's in another law firm and they've been there for a couple of years, it doesn't matter where you went to law school or what your practice area is, but if you've been at a law firm for a year and you have a minimum amount of employment stability, it doesn't matter what your practice area is. It could be personal injury, workers' compensation, litigation, corporate immigration. I'll probably be interested in talking to you and have something for you or at least jobs I can send you.
 
If you're in a law firm and you have a practice area and you're at least doing one thing, preferably one thing, you're probably marketable to other law firms, and I know how to do it. Most recruiters will only work with larger firms, but I work with even solo practitioners finding people for them to work for them. There's plenty of jobs out there if you're in a law firm. Even if you're senior, people that are senior litigators may have a difficult time getting some positions, like in New York City, crowded markets, but if you get out into the suburbs and stuff, there's plenty of openings and there's just jobs everywhere for law firm attorneys.
 
The problem is law firm attorneys typically are not going to be as interested in in-house attorneys. There are a lot of reasons for that. I could go into a lot of detail about it, but the main reasons law firms aren't interested in in-house attorneys are because a law firm attorney is working for paying clients. There are certain standards that are required, and they're used to hours and deadlines and doing work that people are actually paying for. There are certain people that work in law firms, certain people that work in-house, and people know that typically, if you leave a law firm, you're most often going to leave again.
 
That's not something that the law firms are that excited about hiring. It's hard for me to work with most people that are in-house. If I know, I will. I do all the time. Each day I'll either work with them or have recruiters work with people in-house that are in certain practice areas. But for the most part, it becomes much more difficult to get a job in a law firm. Law firms prefer to hire people that are in-house, and there are a lot more jobs for lawyers in law firms than there are in-house. Most attorneys, when they do go in-house, never get these economic windfalls.
 
It depends on your practice area, but most of them end up going to established companies. If you go to an established company, which is going to have the higher salary and more prestige, you're typically not going to make a ton of money. You may if you take a huge risk and go to someplace in Silicon Valley or New York that's starting up and ends up being successful, but most startup businesses aren't successful. It's a risk. It's a risk you may decide to take, but you have to do your homework and diligence and really believe in the company that you're going to and its future if you think you're going to get an economic windfall. Most people don't; almost all of them don't, but they do. I've known attorneys that have, and it can be a great thing when it happens.
 
The other thing is, it's very difficult to move to another in-house job. Most attorneys, like I talked to attorneys in New York City and Silicon Valley and stuff all day long, and a lot of them will spend years trying to get their first in-house job. It depends on your practice area, but they'll spend a lot of time. So, it's actually much easier to get an in-house job in a law firm than it is when you're in-house because you have fresh skills. It's considered that you're going to be hungrier and have transferable skills, and you're still going to be hungry.
 
In-house jobs are not able to train attorneys as well. Once you go in-house, it's much more difficult to get another in-house job than it is to get your first in-house job. A lot of people don't realize that, but if you go in-house, the typical move is someone goes in-house. Some people will last a very short time, which means a matter of months. They will get there and it just will be a really bad fit for them. I would say that happens to about 10% of the people. Another 20 to 30% don't last more than six to nine months. Another percentage of people will last one to two years, and then they'll have to move jobs, and typically people will move around, and it becomes very difficult to get another position.
 
The next thing is they move to different states. I see things all the time where people do stuff like move to some weird area of Colorado or some weird area of the state and they get up and move their whole family and then they get there and the company closes or they lose their jobs. It's difficult. Typically, you're working for a company and the company has a CEO and a COO and people that don't like you, they'll just get rid of you. They want people that are going to help them grow the business. They don't want people that they feel are averse to them, and there are all sorts of other issues.
 
Your legal skills are likely to deteriorate once you go in-house. Law firms are working on the most complex matters. In most law firms, there's a lot of oversight in terms of the type of work that is being done. Everyone's patrolling each other and making sure that the best work is being done. You're working for paying clients, and they expect a certain type of work to be done. You need to be on top of different trends and things in order to get clients and impress clients because it's a competitive market. Once you go in-house, you're typically not working on the most important matters. Those are done by outside law firms, and your skills as an attorney are likely to deteriorate. Most in-house attorneys become very good at handing off work to other in-house attorneys.
 
Pretty much every in-house attorney that I've ever hired that's been an in-house attorney before just has all these relationships with law firms, and all they're really interested in doing is rewarding and giving work to other people and not doing it themselves and finding reasons not to do the work. Whereas if I bring in a young attorney from a law firm, they don't have all those relationships with law firms, and they're more eager to do the work themselves. That's actually better for the company because we save money and all sorts of things. There are different skills that an in-house attorney has, and over time they become experts in giving away work, and it becomes very political as opposed to doing the work, and it doesn't help you. That's one reason that law firms don't always like in-house attorneys.
 

---

See Related Q&A Videos:

• Reasons to Go In-House
• Crafting Effective Personal Branding for In-House Counsel Roles
• Associate Salaries and Legal Landscape: In-House vs. Law Firms
• Legal Career Revival: Exploring In-House Opportunities for Seasoned Lawyers

---

In many companies, you actually work much harder than you did in a law firm. You could work incredible hours in-house, and you may be working for the founders of the company or the high-level executive team. You're working for people that are even more aggressive than the most aggressive attorneys in the largest firms. They expect you; it's not uncommon for people to be expected to show up. I have people showing up in our company, BCG, for meetings at 6:00 AM. This is just how it is when you're hard-charging and interested in getting things done. You may work as hard in-house. Many in-house companies also track their employees' hours and how much time they're working remotely and so forth. It can be difficult.
 
So that's an introduction to some of the issues with going in-house. I will now talk a little bit about a few of the issues that I've brought up. The first thing to be really aware of is it's very difficult once you go in-house to get a job with another law firm.
 
In most states, regardless of where you are, I don't care if you're in rural areas, it doesn't matter. There are tons of law firms. Law firms are in every city in the country. There are litigators and law firms in cities with 3,000 people. There are law firms everywhere. There's legal work everywhere. If you want to work in a law firm, it's so prevalent, it's unbelievable. The laws for getting a job in a law firm aren't really that difficult. You either need to have a specialized skill, which means doing one thing, it doesn't matter what it is, it doesn't matter where you went to law school, you could do trusts and estates, you could do insurance defense, you could do sophisticated commercial litigation. If you have a skill, you can always get a position in a law firm.
 
Now, if you have multiple skills and don't do anything very well, then you're going to have to work at a law firm you may not want to work in, but for the most part, if you have a skill, you can always get a job. I know attorneys that have moved firms in their eighties that had multimillion-dollar books of business. You can keep working; you can do this law firm game forever. In companies, you're talking about a whole different set of rules. If you want to stay in a large law firm or a mid-sized law firm, at some point, you probably need to get business or the prospect of business, or if you don't have business, you need to maybe shoot a little lower and work for a smaller firm. But you can always get a job at another law firm.
 
If you're not able to get a job in a law firm, you just don't know what you're doing, and you should watch videos that I've done about it. Anybody can get a job in a law firm. There are law firms in any state you're in. There are thousands of law firms or tens of thousands. Just in Los Angeles, there are new law firms starting probably every hour of every day. There are thousands and thousands of them. These law firms have work, and they need people to help them. They have all different cultures and sizes and things about them that make them good and bad.
 
Attorneys are contacting us all the time that have been in-house and many times want to go to a law firm again. If they're coming from an in-house position, most law firms aren't interested. They don't care that the person went to some incredible school or worked at this major firm before. If the person is a year or two out of a major firm and in-house, they might not care, but for the most part, law firms don't want them because they're just sending the message that they're going to leave again, that they don't like this environment, that they're showing their skills have probably deteriorated, that they're not as interested in being in a law firm compared to other places. Everyone in a law firm knows when someone goes in-house, that person is going to leave again and doesn't like working in a law firm.
 
That's fine. It's not that you don't like working in a law firm. I would say it's probably the type of law firm you're in. If you ever go in-house, the odds of you getting a job in a large law firm again are very slim. You need to be aware of that. You can get a job in a smaller law firm if you have skills, but the problem is most attorneys that go in-house typically will be doing a bunch of different things and work that's not as sophisticated as what a law firm does. That's not always the case, but it is a lot.
 
During the late nineties to the first part of 2000, there were so many attorneys that went in-house. It's sort of going on again now, but I would say that one of the things that I saw was probably 65 to 70% of those attorneys who left law firms during that period lost their jobs in 18 months. Most of those people who tried to return from those in-house jobs, I would say 60% had all sorts of reasons why they believed they made a mistake. Out of those attorneys, and we're talking about tens of thousands of people, very few of them ever landed jobs at the same prestige level. I would say less than 50% were successful at getting a job at another law firm at all. These were graduates from top law schools and coming from the best firms that had done this many times.
 
You need to think about this very carefully because if you go in-house, you're going someplace with, in most cases, unless it's a huge company, an unproven business model. Even General Electric, which used to be one of the safest places in the world to work, I remember a couple of years ago it was letting go all of their attorneys. You just don't know. Things change rapidly. Think about just in the span of the past few years, the companies that you've seen emerge and with the way things have happened, whether it's electric cars or different types of computer companies or cell phones. The world changes, and when it does, companies go out of business. Law firms typically just keep plugging along, and nothing changes.
 
If you're going to work for a company, you better be prepared that at some point it's probably going to have problems, and you're going to lose your job or it's going to get new management. It's very difficult to get back. Most attorneys that leave always think that the company they're joining is going to be great and they think it's going to be the next big thing. Every year, accomplished attorneys leave large law firms to go in-house, and then they have a bad experience and try to return. Even in the best of times, companies will cut back on their legal departments, go out of business, or merge. When the CEO of a company or a general counsel of a company comes into a new role, or when that switches over, companies always come in and want to bring their own legal people.
 
So, I've known people that have been hired as a general counsel of a company. And then the CEO is replaced and that general counsel just sits there. The new CEO brings in his own general counsel, and then eventually they let the general counsel go. This kind of stuff happens all the time. And this sort of politics certainly exist in law firms, but it's just something to be aware of.
 
Even if the economy isn't in bad condition, you're going to have a difficult time returning to a large law firm. It's just kind of how it works and you need to understand it and you need to understand how law firms work if you want to be part of them. And you need to understand that if you do work in a law firm and you choose to stay with it that you literally can have a career easily into your eighties.
 
I have an attorney representing me right now that I think is probably at least 85. And he's doing a good job. You have plenty of opportunity in a law firm. You don't find 85-year-old attorneys working in-house. If you go to a large law firm you have to understand how most law firms work and the expectations on why that's a good business model and what typically happens that's good for your career.
 
If you go into a law firm you're expected to specialize, especially in large law firms fairly quickly you're expected to become an expert in your practice area. You can do it in five years, but it typically takes a long time to really know what you're doing as a corporate attorney or a litigator. Most of us, most of the times, it takes about five years just to even understand what you're doing.
 
So going in-house before that time is usually a big mistake. Really have a lot of variety and challenges and things coming at you to develop good habits. And typically, the better the firm you're at, the better habits and work habits you'll develop. But you're expected to work hard for seven to 11 or more years to develop skills.
 
These skills involve relating to clients, communicating with people, making partner, taking a counsel position, or moving to a smaller firm as a partner, associate, or a counsel. That's just kind of how the world works in most large law firms. There's not a lot of opportunities. And when you're in a law firm you're expected to constantly become better and better at your work and rise to better and better challenges.
 
A litigator will first maybe do discovery, then move on to writing parts of briefs, then they may write a whole brief, then they may go to do a deposition, then they may go to court and argue as part of a motion, then they may go to court and examine a witness in a trial, and then they may do their own trial.
 
And then they may bring in clients. And, there's a whole kind of developmental framework of how you develop as an attorney inside of a law firm and there are greater and greater challenges. And it's the same thing with corporate and every other practice area you're constantly being challenged to become better and more proficient and getting an increased responsibility.
 
And developing your skills and so forth. And as you do that, your billing rate increases, you're supposed to get closer to clients. You develop more contacts and a larger Rolodex of people you can leverage into portable business. You're developing management skills, training younger attorneys, and as you train them, you'll learn more about yourself and what you know. And then in each step of the way, you're growing and the firms are set up to make you grow.
 
And then if you stop growing or you just can't cut it, then you have to leave. But even the largest law firms may require you to bring in a giant public company in order to become a partner or stay a partner. So, you have to keep growing—the bigger the firm and the more prestigious the firm, the bigger the challenge.
 
And so growing is not bad. I don't understand sometimes why people want to quit growing. Growing is a good thing for you and people pay money to be put in positions where they're growing. You're on this webinar right now because you're trying to grow and you should be. This is very smart of you, by the way, to be on this webinar. Anybody that's trying to learn from someone that understands anything.
 
It doesn't have to be me. You could go to someone else to learn how to get business. You go to someone else to become very good in your practice area, other people, but learning about this stuff is important. And learning is important. And that's what a law firm does. And law firms will try to make you the best you can be.
 
And it's in their self-interest and yourself. Young associates may work with mid-level to senior associates, and then those senior associates are being supervised by partners. Everything is being funneled up the chain of command and you're getting better and better as a consequence.
 
And you don't even see it. If you're with a large law firm right now, all the stuff that's coming at you, that's annoying you and upsetting you and keeping you up at night is just trying to force you to be a better attorney. That's all it's doing. If you want to get off that path, that's fine.
 
You can do that in a firm that maybe isn't as harsh or where you're a better fit, but everybody's trying to make you become a better attorney. And that's one of the things that law firms do for you. And becoming better at something is a tool you can use if you're 25 years old and frustrated by being in a law firm, think about all the stress and stuff that you're learning and how good you're going to be.
 
30 years from now or 40 years from now and 40 years from now, at 65 years old, most attorneys are still working. So, all of these systems in a lot of law firms, attorneys are still working at 65. Every step of the way there are checks and balances to ensure you have the best work product.
 
This is creating good lawyers. And then, once you go in-house, you're just on your own and all of that stops. If you're working right now at a major law firm, say, you're working at a good law firm, a good law firm, Sidley and Austin's a good law firm.
 
For example, if you're working at Sidley and Austin, they're going to have all these checks and balances for their major clients. And they're going to make sure that to the extent they can, that the best work is done. And that's going to over time create a good brand in the marketplace and make good lawyers.
 
And people know what an attorney that comes out of that firm, or another good firm, Mayer Brown, another good firm, people know what it means to come out of one of those good Chicago firms, for example, and they know the quality of work and they know if someone's been there five or six years, what they're going to be like.
 
Unfortunately, that same thing does not happen in-house. No one has any idea what it means to work at a certain startup or the type of work that you're doing in-house. There are no checks and balances in most of them. You may say my department is led by a former partner of Skadden Arps.
 
It's such a great department that I work in in this in-house company. And that may be true, but unfortunately, there's just not that hard and fast rule. And the thing is, your work quality what's funny about going in-house is the job of the outside counsel is to make the in-house attorney feel good about themselves because then they'll get more work.
 
So even if you can turn in the biggest piece of crap work as an in-house attorney to your law firm, many times that law firm will praise it and say how good it is. They'll tell your bosses what good work you do and stuff. So, your work is not going to be criticized and you're not going to be held to high standards.
 
In-house attorneys represent people to be flattered to get work being given to the law firm, but also an opportunity to get more work. Once you go in-house, you may be in an authority position and that's good for your ego, but at the same time, you're not going to be challenged as much.
 
There are a lot of exceptions—many major companies in New York, Silicon Valley, and the Midwest, hedge funds, and all sorts of people that need very specialized types of attorneys. And that's perfectly fine. They do hire specialized attorneys.
 
There are exceptions. There are real estate companies that hire people that only do leases and different types of companies. But for the most part, once you go in-house, the odds are that you're going to be more of a generalist than a specialist. And as I said to you earlier, the reason law firm attorneys are most often marketable is because most of them have some sort of specialty.
 
There are a lot of practice areas. In terms of the ones that I just look at when I classify an attorney, I have over 75 and there's probably even more than that. But the idea of being a generalist just is not going to appeal to a law firm.
 
Law firms want specialists because if you're a specialist, they can go to their client and say, this person does this branch of healthcare law. And that's why they're worth this amount of money per hour. They're going to save you time and they understand that clients want experts.
 
They don't want generalists and generalists take time to learn. It's not a good use of their money. They may not have interest in the practice area. They can be outmaneuvered by attorneys that are specialists as opposed to generalists. If I go up against a patent attorney with no knowledge of patent law, I'm going to lose whatever patent competition or case it is.
 
While you may believe it's interesting to participate in different types of work, this is just going to make you increasingly unmarketable and it's going to make you have less service to your clients. You're always better off being a specialist because you'll understand something in a lot of depth. When you go up against competing attorneys, you'll be able to get a better edge and then get a better result for your clients. When you go in-house, you're really jeopardizing the growth that law firms expect attorneys to demonstrate throughout their careers.
 
Law firms want you to be committed to the way they practice law. It doesn't demonstrate that commitment. It demonstrates a lack of understanding of the importance of specialization, being trained, challenging yourself, and growing. You're just putting yourself on a path that, frankly, lawyers in law firms don't respect as much. There's nothing wrong with that.
 
I'm not saying you should feel like you're making a mistake because I think going in-house is a great opportunity for a lot of people, especially if it's for the right firms. There are tons of people that go in-house and go back to law firms. Some examples are prosecutors. I've placed prosecutors from in-house to law firms constantly. I have them interviewing every week. Real estate attorneys, corporate attorneys are less common, but it does happen. There are people from healthcare that are in hospitals and can do it sometimes.
 
There are lots of people that can do it in different types of roles. There are some very important general counsel roles where you may be at Disney or General Motors or something along those lines where you could potentially go back.
 
But in most cases, it's very difficult and it's not as easy. If you have very good contacts, then you can potentially do it. Those are just some things to think about and why giving up a law firm can be a mistake for you.
 
And it's something to realize. Everybody listening to this, you're making a very good decision use of your time because you need to understand these things and need to weigh the decision to go in-house against all these things. Just make sure you understand that the economic windfall argument I bring up because I think a lot of people believe they are going to have economic windfalls. I know several attorneys that I hired once that went in-house and got, I think, $4 million. He worked there for two or three years and wound up with two after taxes. Stories like that become very appealing to an attorney.
 
A lot of the reasons for the salary increases when I was back in the nineties, the salaries of attorneys in the big firms were around 85 starting salaries up until around 2000. What happened is there was a firm in Silicon Valley called Gunderson that was losing all of its associates to in-house companies because of this promise of potentially making all this money.
 
So, they raised their salary to 120, and then all the other firms followed. At some point along the line, they raised them to 135, and the salaries just kept increasing because there was all this competition for in-house jobs because people wanted the opportunity to participate in this lottery of stock options. It is a good thing for a lot of people and you can do well.
 
The stories circulate very widely. The stories of people that don't do well don't circulate as widely, but these stories certainly circulate and then everyone is jealous and wants to be part of it. They'll say, "Oh, I was a better attorney than that person. Why did that happen to them?" It happens.
 
We don't do a lot of in-house placements here, but I have attorneys that I placed and I know other people have placed that have gone in-house and done well with stock options. It's rare, but it does happen. It happens a lot more often that someone gets a multimillion-dollar windfall in a law firm.
 
But people don't talk about that as much. You actually can do very well. I've had people work for me. The only people that I had actually work for me that had these multi-million-dollar windfalls, I had one guy come to work for me. He was an in-house litigator and he decided he wanted to set up his own practice and went to personal injury law. He's done hundreds of millions of dollars in settlements. How much of that is clear, but he's done very well according to his website.
 
Much more than anybody would do in-house. Assuming he's getting 40% of that and the statements he's making are true, which I believe they are, he's probably doing very well. Corporate attorneys are always most at risk.
 
Corporate attorneys become very marketable to law firms when the economy is doing well and they become marketable because companies want them and law firms want them. They often receive lots and lots of calls from recruiters. If you're a corporate attorney listening to this during a good economy, you know how active things are.
 
A lot of times these corporate attorneys go in-house and flock to the startup companies, believing their skills will be enriched. But the problem is these stories are not as common as people would like to believe. I'd say, probably one in 50 attorneys that leave a prestigious law firm ever end up making more money in-house than they would have made if they stayed in a law firm.
 
But some of them actually can do very well. You can make as a general counsel of a big company millions of dollars a year, more than you probably would make in a law firm. So, you can do very well. I'm not in any way discounting it because you can do well. But it's tough.
 
It's tougher than a law firm because a lot of it is dependent on luck. It's dependent on the luck of the company being the right company, having the right management. Whereas if you have a big book of business, you can go to work at most law firms and do that. It's not just dependent on luck, it's dependent on you being able to bring in the business.
 
The point is to think about from a cost-benefit analysis that you have this big risk of going in-house to make all this money. You can make it. Again, I don't want to discount it because I've seen it. If you stick with your law firm job your whole career and enjoy practicing law, then you probably don't want to retire because you'll just like work.
 
If you find something you enjoy going in-house for five, six years and maybe making a lot of money or not, but not being able to go back to a law firm, participate in that is a big risk because lawyer salaries keep rising. They keep going up. They've more than doubled over the past 20 years.
 
Over the next 20 years, if starting attorneys are making, at the high end, $200,000 now, they'll be making $400,000 in 20 years. Just think about that. The fact that things keep going up in law firms and the opportunities keep going on there. I would say that most people that stay in law firms are in a position to be financially independent after a couple of decades.
 
You can do well in a law firm. The thing is with the law firm is you typically can stay there. If you are forced to leave a major law firm, you can always go to a smaller law firm or a smaller market and get a job.
 
You just can't do that when you're in-house. You don't have necessarily the same skills and very few attorneys ever make money with stock options and that sort of thing inside of law firms. There's just a lot of money to be made in law firms. There's a lot of opportunities to be made. I know people that, and just so you understand how much money you can make in law firms, I know people that are just, and I don't mean this in a disrespectful way, but they're nerds. There are people that you wouldn't think would be that. You would get together with them and they would want to play video games.
 
They have skills. They network with a few people and they're able to bring in business. If you bring in business, it's really not that hard. Once you learn the skills, you can take some courses, you can watch webinars that I've done. If you bring in a few million dollars in business at a firm, you typically can be, and it's not that hard.
 
Even if you're in a mid-size firm, you bring in a couple of million dollars in business, you're guaranteed in most firms to take home. The range is 20 to 50% of what your billable, what you're doing. But typically, the average is about one-third. If you have a $2 million book of business, you're making six or 700,000, but you may be making a million dollars.
 
If you get 3 million, you should be making over a million. And then if you're an equity partner, you can make a lot of money working in law firms, a ton of money. It's not that hard. One litigation case can pay for a lot. One of the things I've seen a lot of people do, and I'm just trying to get you guys thinking about how to think about all this, but I've seen a lot of commercial litigators become divorce attorneys from big firms.
 
A divorce can cost millions of dollars just for one client. A trial in a divorce is typically 250,000 to 500,000 and a good portion of that is legal fees. Divorce is one. Trusts and estates is another. There are so many practice areas that anyone can go into.
 
I know someone who's an immigration attorney that went to a local law school in Los Angeles, Southwestern, and couldn't get a job after she graduated because she was from Southwestern and not at the top of her class. She has a $5 million a year immigration practice doing very well, makes a lot of money.
 
So, it's not that hard if you learn this law firm game, you just have to learn it. If you're trying to make money, the odds of making money as a lawyer in a law firm are huge, or running your own law firm, you can do unbelievably well. There are all sorts of ways to learn these practice areas.
 
There are courses on how to be a trusts and estates attorney. There are courses on how to, you can do it on your own, you can do it in a law firm. We used to do a lot more in-house attorney placement. We still do, and I don't mind doing them, but I don't think they're bad. I just think it's important that people understand what a law firm offers compared to an in-house job.
 
When did I say that story about an in-house job that the gist is just a meeting with a startup company? It's not an atypical type of story. There's just a lot of short-sightedness and people need to understand the consequences.
 
In 2000, I was invited to a very important Bay Area law firm to come to a meeting that was being held by one of its clients. This was a long time ago, but the company was looking for a general counsel and invited me to the meeting as a recruiter to learn more about the company and to help them with a search.
 
They dealt with the accounting industry and were started by a guy from Russia who had made a bunch of money illegally importing cigarettes without stamps on them and then creating fake stamps stating that he paid taxes, if you can believe it. This company had recently received $10 million from a venture capital firm just on the idea that he was going to have some sort of virtual accounting firm. I don't remember what it was.
 
The meeting started early in the morning and throughout the day a former U.S. Senator and a major partner of a major international accounting firm and several partners in this particular law firm enthusiastically talked about the company, exchanged ideas about how it could take over the world.
 
The law firm, of course, was also charging this guy by the hour. They were all sitting there just trying to keep the meeting going and they had significant stock options. Everyone in the room did too. I was going to get paid in stock options as well. They even hired someone to write a business plan and gave him stock options. But about six hours into the meeting, and again, I'm very young at this time, I'm in my twenties, listening to this and thought the whole thing was ridiculous after about six hours.
 
And I said, if I understand correctly, the idea was it's going to be a reversed bid system for accounting. So, I said, if I understand correctly this company is going to allow anybody in the country to post the fact that then your tax returns done and accounts are going to bid on the right.
 
And whoever gets the, has the lowest price is going to be the one that, that gets to do it. And then you're going to charge a fee. And the guy that founded it said yes, and he was very enthusiastic about it. And you said the people will put their credit cards in a charge, but the attacks turned immediately once the auction is over and they'll take a 5% fee or something, the other 95.
 
To the account and then they'll make money off this float. So, they were anticipating that this thing would just take over the world and this float was going to be millions of dollars a year and that 5% of the people with access to computer and, we'll use it. And then I said are people going to have the right to choose their accountant?
 
And they said, no, it's a free market. The lowest price account would be the one who does the work. And people will also have to enter the ability to set the highest price they're willing to pay. If you think about that the idea was is that the lowest price accountant was beginning to be the one that does the work.
 
And for me if you think about it, that actually makes no sense. Why would you hire the cheapest accountant to do, have an auction site that you know, where the people are bidding down the price of your tax return until you get someone that's willing to do it at the lowest possible rate, you obviously get someone that's not very good and needs work.
 
And it didn't make any sense. So, I didn't believe whatever work. I explained that to them and then a fourth-year attorney that was inside the firm at the time ended up going privately. The founder begging for the job. And he worked as a general counsel with stock options, he took the job for $60,000 a year.
 
At the time. He, I think he was making maybe 130,000 four months later, the company reduced the salary to 30,000 because it told them it no longer had the money because no one was signing up for the service. And then with nine months he was let go of the company. We're not a business. And there were no stock options, no tax returns.
 
And I don't think a single person ever participated in this thing, even though they spent, millions of dollars in advertising this thing is stuff still happens all the time. I have candidates, I had a candidate just a few months ago that got a very well-paying job doing patent work in a law firm in Silicon Valley for, I don't know.
 
It was patent litigation, a $300,000 year plus job. He got an offer from his friend who was starting a company to go work there. And within four months the company was out of business and he had the same idea that the company was such a great idea. It wasn't take over the world. But the same attorney then tried to go back and get a position with the law firm.
 
He couldn't get a position with the law firm because no one was interested in an attorney that had just left like that and basically taken his firm's client and gone to work with them. He wasn't successful and then he accepted. A part-time contract position with a company, with a publishing company doing in-house work for $35 an hour.
 
And then and then several months after that he moved back to work with his parents in, I know it was Vancouver, I believe in to basically be a real estate agent. And this is someone that was had gone to an Ivy league law school and was on the fast track. And this kind of story is not unique.
 
It's, this is I see these stories all the time. And so, I just, I want you to be aware of like, when you see these great ideas and things that sound good you have to be very careful because a lot of people get in trouble this way. And it happens with astonishing regularity and law firms do not welcome you back after you make this mistake.
 
I You can take this risk and maybe going to work for this this company would have been smart for people, but so many people have this result. And so, I just, I really want to warn you because you need to understand that this can happen. And it happens a lot. All the time.
 
I'm always working with attorneys and I get them great jobs and they say, I'm going in house. And then invariably, they come back not invariably, a large percentage at a time. And they say something along the lines of, oh, the company lost funding or the company or the co.
 
And you can get this. Think about all these companies that are out there and the fraud you're reading about in the papers all the time, every day I read about some company fraud or something, some company thing happened and it can be very scary. I knew an attorney at General Motors that was part of a litigation group.
 
And they fired a whole, 10 or 15 attorneys because there was some problems with seatbelts and they had nothing to do with it, but they but they were in charge of responding to an early lawsuit or something. And didn't, I don't know, I all sorts of things can happen. And those people couldn't get jobs either.
 
So at least around Detroit. But the point is a lot of people seem still seemed to want to go in house and think they're going to make a lot of money and it's just very dangerous. And it's just something you need to understand that it doesn't always end well and most large law firms, by the way people, when attorneys are in large firms, they'll say things like, oh, the Mo the morale's really low or there's problems with the firm, or they just lost this client, or all the partners are leaving, but you.
 
These law firms have been around in many cases for a hundred years or decades. They'll, there'll be fine. I Law firms do go out of business, but when a law firm goes out of business, its front-page news, because it's so rare. They're selling basically labor at a huge markup and the, when a company goes out of business and when companies go out of business every day, and, but it's very rare for law firms.
 
Most of them don't, especially with the larger law firms. In full-service law firms are also very good places to work. One of the reasons law firms are set up the way they are is because clients need the service, but also because they support each other during slow time. Litigation could be slower.
 
Bankruptcy could be slower IP; it could be slow. And then other practice areas pick up the slack and then there's a diversity of clients. So, there's, there's not just one or two clients, it's a bunch of clients. And so that, that diversity of work can help, but think about companies that you may be aware of that have gone out of business during your lifetime.
 
And that had been eclipsed by new business models and new ways of doing things. The business model, the law firm hasn't changed. I don't think there's going to be any major changes and it's just the way it is. And it's a much safer career off. It's just a monumental event when things go out of business.
 
When a law firm goes out of business. So, I just would say that, as you're evaluating in-house with the opportunities, as people are asking you to work in-house companies just remember that anything that produces a lot of economic value and does generally does.
 
So, over an extended period of time. You can't come up with an idea for I don’t know like a delivery service or something, and some small idea and not expect that someone else is going to be able to wipe it out and take it off them, take it off the map very quickly.
 
Most businesses that survive like law firms and companies have a tried-and-true business model. And there's the thing like with Amazon, for example, like if Amazon sees someone emerging in their space, I they'll just start a business and take them out. If it's a business that makes something or does something that they believe is competitive they'll do it themselves.
 
And so, you just need to be very careful, especially about companies that aren't well-funded and don't have a very strong management team. You just need to look out for. I just want you to really consider the stuff cause I'm trying to help you just because of what I've seen.
 
And that's one reason I'm talking so much about this. Cause I care about the people that I help and you don't have to get a job for me. You can get anywhere you want, but I just make these decisions through it, through the lens of knowing that there was a lot of danger in it and knowing the positives of a law firm.
 
And then, finally this is a very important part too. I think an attorney believes that, there's two types of ways. Two places you can work in house or you can work in a law firm or you can work in the government or something else. But most people believe that once they go in house, they're not going to, they're going to, it's going to be easy to find another in-house job.
 
And in just think about if you've been looking for an in-house job where, you know, people that have, think about how long they've been looking most people take a long time looking for in-house jobs or at least finding the right one. And but it's much harder to get an in-house job after you've been in house than it is when you're in house.
 
Now there are some exceptions to that. If you're in the same industry and they need someone like you, then, it may be good. Like for example, if you're like a privacy attorney at Facebook and Google needs a privacy attorney in house, and then that may be a little bit easier to move if you have some sort of scale like that.
 
But for the most part, it becomes very difficult. The law firms want to hire people. In-house companies want to hire people from law firms. The reason is because their skills are fresh and the people know what they're doing, and they're not, they don't have this kind of a mentality of giving work to other people outside the company yet, which they pick up.
 
And then the people they really like to hire are the people that are inside the law firms already doing their legal work. So, if you're a company and you're paying your attorney in a law firm, $800 an hour, and you can get them to come to work for you for I don't know, $200,000 a year, that's a pretty good deal, right?
 
You're saving $1.4 million in getting another legal, doing all the work. That, that is how companies think, and they want to hire people that they're familiar with that they have established relationships with and that they already trust. And they think are going to provide them the same level of service in house as they did when they were in the law firm.
 
And the idea of bringing these people in, they know, and trust is great. So, they, the this is the most common hire, by the way, it's the, company's hiring people from their law firms. And that's and if you're not getting a job that way then you may wonder then that it's also a little bit riskier and that by the way, is typically the best way to get a job, because if you do go to work for a client and That client is more likely to protect you.
 
You're already going to have a relationship. You're going to have a better understanding of the work styles and things are just going to go better. But the problem with going in house is companies go out of business all the time and in business models change, there's this process of creative destruction.
 
And look at just, what's happened to malls, look, it's what's happened to. All these businesses when things change. I Movie theaters, like different businesses are just always changing and they'll always be changing. And so, if you go to work in a certain type of company then the outside of that company is going to have problems.
 
And you just can't rely on staying with a certain in-house company in your career. LA in-house companies want typically to hire people from the law firms are working with, or if they don't, they want to hire people coming from law firms that have fresh skills and that are hungry.
 
And that's typically the way it works, if you take a job with people, you don't know it can be very risky especially if the company is not established and, and think about how often CEO's changed and so forth. The other day with I don’t know, the CFO of a big auto company.
 
And she was telling me how that there, this auto company had, three C CEOs in the past, 18 months. Companies have to get their direction. And then when a new CEO comes in, they want to bring their own people and it's just, it's very dangerous. And so, if you lose your job in house, you're often going to need to start tracking down new jobs on your own.
 
And that's tough. If you move to wherever you move, people might move to, Sacramento, California, or you might move to on Maha, Nebraska, which actually has some good companies and you ha you'll buy a house. You have kids in the school and so forth.
 
If you take a job in house, you have to be pretty confident that you're going to be there a long time, because it's not going to be easy for you to find another job in Omaha, Nebraska, or Sacramento, California, if you lose your job and then you'll have, your kids will be in school, you may have a mortgage.
 
And it's scary. So, a lot of attorneys that go in house and not with their clients many, spend years searching for jobs before they find one and it can be very difficult. So, it's just something to think about. In addition, a lot of attorneys that are. The associate level are often very eager to, work in house.
 
And so that's just something else to think about. And they're much more enthusiastic than you may be, may appear when you come in. The level of enthusiasm and bright eyed and bushy tailed, and when you're young is much different than, when you're in your, when you start gaining older in your competitive market where your skills aren't as fresh, where you're a little tired and so the law firm attorneys are much more interesting to most in-house companies.
 
And just think about it. I see all of these and I, I hate to bring it up, but I see all of these stories that in my opinion are just terrible. It's when people, leave these huge law firms, she's great law firms, and then they take these in-house jobs and they move their whole family and they get there and the company closes or they get fired, or, and this happens so much.
 
I It certainly happens with law firms too, but then at least if you lose your job in a law firm, it's usually you can find a job fairly quickly. You should see when you look for jobs on job boards, you'll always see a lot more law firm jobs than in house jobs.
 
There's N if a law firm a hundred to $200,000 people, if it's a city, I'm sorry, I went that big. There's going to be more than a hundred law firms, typically much more than that, of more than 10 attorneys. There's just a lot of law firms out there. But then there'll be maybe as few as 10 companies that employ in house attorneys and the number of attorneys that they hire is going to be pretty low.
 
And they don't know how to manage attorney if they don't know how to hire attorneys. They don't understand it. I understand hiring attorneys cause I'm an attorney and I run know placement firm, but at the same time most firms don't and then most companies don't. And then the other thing is once you go in house your skills are likely to deteriorate.
 
And I brought this up earlier, but it's actually a very serious problem. Most in-house attorneys learned very early on that they can convince their supervisors and others to allow outside people to do the work. This means that they don't have to work as hard and it also means that they can take response to that.
 
They don't have to worry about getting in trouble for things being done in properly. And so, they really become experts in giving work. Law firms and the law firms are flattering them and so forth when they give them work and taking them out. And they give them more and less and less work is done.
 
So, it's not to say that in-house attorneys don't work because a lot of them work extremely hard. As a matter of fact, I've seen in-house attorneys hired by major law firms that they were doing work for because the law firms were just amazed at how hard they work, but it's rare and it's not as common and most companies are smart enough to know that if they have a serious matter, which would be an IPO serious litigation bet the company serious transactions and things happening.
 
They're not going to use their in-house attorneys. They're going to use law firms that they trust and that they believe are going to do a good work. And if there's some significant litigation in almost all cases, it's going to go to a big firm or someone that's an expert. And there's just a lot of learning and refinement that comes in a law firm.
 
And so, I, I just bring this up just very quickly because most in-house attorneys that the problem is, I'll tell you some examples. I'll just tell you one interesting example. So, I had a company that was I don't know, down south somewhere, I think it was maybe Mississippi or something, and they were looking for.
 

---

About Harrison Barnes

Harrison Barnes is a prominent figure in the legal placement industry, known for his expertise in attorney placements and his extensive knowledge of the legal profession.

With over 25 years of experience, he has established himself as a leading voice in the field and has helped thousands of lawyers and law students find their ideal career paths.

Barnes is a former federal law clerk and associate at Quinn Emanuel and a graduate of the University of Chicago College and the University of Virginia Law School. He was a Rhodes Scholar Finalist at the University of Chicago and a member of the University of Virginia Law Review. Early in his legal career, he enrolled in Stanford Business School but dropped out because he missed legal recruiting too much.

Barnes' approach to the legal industry is rooted in his commitment to helping lawyers achieve their full potential. He believes that the key to success in the legal profession is to be proactive, persistent, and disciplined in one's approach to work and life. He encourages lawyers to take ownership of their careers and to focus on developing their skills and expertise in a way that aligns with their passions and interests.

One of how Barnes provides support to lawyers is through his writing. On his blog, HarrisonBarnes.com, and BCGSearch.com, he regularly shares his insights and advice on a range of topics related to the legal profession. Through his writing, he aims to empower lawyers to control their careers and make informed decisions about their professional development.

One of Barnes's fundamental philosophies in his writing is the importance of networking. He believes that networking is a critical component of career success and that it is essential for lawyers to establish relationships with others in their field. He encourages lawyers to attend events, join organizations, and connect with others in the legal community to build their professional networks.

Another central theme in Barnes' writing is the importance of personal and professional development. He believes that lawyers should continuously strive to improve themselves and develop their skills to succeed in their careers. He encourages lawyers to pursue ongoing education and training actively, read widely, and seek new opportunities for growth and development.

In addition to his work in the legal industry, Barnes is also a fitness and lifestyle enthusiast. He sees fitness and wellness as integral to his personal and professional development and encourages others to adopt a similar mindset. He starts his day at 4:00 am and dedicates several daily hours to running, weightlifting, and pursuing spiritual disciplines.

Finally, Barnes is a strong advocate for community service and giving back. He volunteers for the University of Chicago, where he is the former area chair of Los Angeles for the University of Chicago Admissions Office. He also serves as the President of the Young Presidents Organization's Century City Los Angeles Chapter, where he works to support and connect young business leaders.

In conclusion, Harrison Barnes is a visionary legal industry leader committed to helping lawyers achieve their full potential. Through his work at BCG Attorney Search, writing, and community involvement, he empowers lawyers to take control of their careers, develop their skills continuously, and lead fulfilling and successful lives. His philosophy of being proactive, persistent, and disciplined, combined with his focus on personal and professional development, makes him a valuable resource for anyone looking to succeed in the legal profession.

About BCG Attorney Search

BCG Attorney Search matches attorneys and law firms with unparalleled expertise and drive, while achieving results. Known globally for its success in locating and placing attorneys in law firms of all sizes, BCG Attorney Search has placed thousands of attorneys in law firms in thousands of different law firms around the country. Unlike other legal placement firms, BCG Attorney Search brings massive resources of over 150 employees to its placement efforts locating positions and opportunities its competitors simply cannot. Every legal recruiter at BCG Attorney Search is a former successful attorney who attended a top law school, worked in top law firms and brought massive drive and commitment to their work. BCG Attorney Search legal recruiters take your legal career seriously and understand attorneys. For more information, please visit www.BCGSearch.com.