by:
Albert Tawil, Founder & CEO of Lateral Hub
I had a conversation with someone last week considering an in-house move and thought this blog post would be helpful for many.
For many BigLaw associates, in-house is the promised land. “I’ll work here for a few years, then go in-house.” You may want a more relaxed work schedule, even if that means less money than the BigLaw scale. (As I’ve written about before, money is not a motivating factor in a job and almost never cited as a reason someone loves their job.)
But, here’s the thing. In-house jobs come in many shapes and sizes. They are not all 9-to-5. Some pay well. Some don’t. Some are fun, with cool and interesting work. Some are not. Some come with less grunt work than BigLaw. Some come with more grunt work than BigLaw (believe it or not). The key is finding the one that is the right fit so you are not looking for a job again soon after.
Here are some things to consider:
1/ The Work
To me, the most important thing in a job is that the work is enjoyable, challenging, and fulfilling. We spend most of our time at work – if that is not enjoyable, it can lead to serious unhappiness and makes it hard to be motivated to go to work in the morning.
The actual work you’ll be doing in-house highly depends on the role. It is not at all like comparing BigLaw jobs – being an M&A associate in one BigLaw firm versus another generally looks the same. Yes, cultures are different, colleagues are different, but it is comprised of the same basic tasks and same types of deals.
In-house is different. I like to think about in-house roles in four buckets. (Yes, there are more buckets, but to keep it simple and provide a framework, I’m focusing on these four.)
- True Generalist – This requires you to be a jack-of-all-trades, and is often the day-to-day of a company’s General Counsel. Handling whatever legal issues comes up, issue-spotting, managing outside counsel, and learning on the fly. Even if your law firm hyper-specialty is buy-side private equity M&A with a focus on the consumer products sector, specifically for beauty products, get ready for a change. Even if you are not a GC (yet), this type of role can exist – for example, on a small legal team where you are reporting to the GC. This type of role is appealing to many people (like me). You learn new things every day and flex your muscles as a lawyer. However, if you want to focus your legal practice on a specific area that excites you, then this is something to consider before taking the job. You may be frustrated dealing with issues that you never wanted to work on.
- Contracts Specialist – At many large companies, there are in-house attorneys dedicated to contract negotiation. This experience can vary widely between companies. At some companies, this is fun and fulfilling – you are reviewing and negotiating agreements and helping the company grow. You may be putting together the company’s templates, thinking strategically about how to streamline the contract negotiation process. You have the flexibility to be creative and find solutions to get deals done within the risk profile of the company.
- Product Counsel – This type of role exists at many large companies, especially tech-focused companies. This role is focused on understanding a certain product or feature with the tech or leadership team and weighing on legal risks. For example, looking at a new feature and analyzing the privacy risk and compliance related to data collection. Or looking at product advertisements or social media posts and weighing in on compliance with marketing regulations. You may be required to think creatively to merge the legal considerations with the business considerations – there is the question of what is compliant, and there is the question of what is the risk.
- Legal Subject Matter Specialist – This bucket is the catch-all for in-house attorneys who are focused on a specific practice area and therefore don’t fit into the other categories. For example, a patent attorney at a pharmaceutical company. A securities lawyer at a company planning an IPO. A litigator at a large company in a highly regulated or litigious industry. An M&A lawyer working in-house on strategic acquisitions at a large serial acquirer. These roles are focused on the particular practice area you specialize in – the type of work you do may be more similar to your work at a firm, except that you have the ability to work with outside counsel to do some of the heavy lifting (drafting, turning comments, etc).
However, at some companies, this is churn. You have a constant stream of contracts to review and negotiate. Most are on the company’s form (constructed before you got there), and you are marking up the same provisions based on the company’s established negotiation playbook. You are at the mercy of the sales team, who view contracts as a roadblock to them getting deals done. You feel like an offshore customer service agent, working through requests, getting them done, and moving on to the next one. Sometimes the hours are more manageable than BigLaw, but sometimes this type of role can include late-night drafting to catch up on requests (since you may be on calls during the day), and you start to feel like a law firm associate, just making less money. I’ve heard this feedback firsthand from in-house attorneys I’ve worked with on commercial contracts matters. “I’m marking up agreements at 11pm like a law firm associate, but I’m not getting paid like one.”
If you are looking into a role like this, it may be wonderful. It also may not be what it’s cracked up to be as the dreamy in-house job.
This type of role rarely involves hours of focused contract drafting. The day-to-day usually involves a lot of phone calls, emails, escalation, project management, and coordination.
If you like drafting and negotiating contracts, this is not the role for you. If you like learning new things, getting involved in the business details, and juggling a few different things at once, this can be an interesting role for you.
For these roles, the culture, hours expectations, and compensation vary by company. You will need to do your due diligence to make sure you are comfortable with the role.
2/ The Team – Understanding what the team looks like is critical. Are you joining a large company with a huge legal team, that operates like a law firm? Will you be reporting to the GC, or to your manager, who reports to her manager, who reports to her department head, who reports to VP Legal, who reports to the Assistant (to the) General Counsel, who reports to the General Counsel? Or are you joining a small legal team, where everybody works together on a lot of issues, with open communication from top to bottom? This can be great, but the downside is that more responsibility can fall on you. Is your team “lean” or understaffed?
Although the previous paragraph was partially in jest, lawyers have different preferences. Some prefer to have a clear role and work within that. Others want to be on a team where the communication and requirements are fluid, and are ok taking the risk of a role that is not as clearly defined.
3/ The Future – Even if you are not sure if you will stay at the company forever, it is important to think long-term. What does your future look like at the company? If your goal is to be a GC, is there a way for you to grow into that experience? If your goal is to use this as a way to move somewhere else in a few years (either another in-house gig or a firm), will you get the experience to do that?
One thing to consider is the ability to go back to a firm. Although many in-house attorneys go back to a firm (we’ve had in-house attorneys get hired from firms through the Lateral Hub job board), it is not as easy as lateraling from one firm to the other. When firms hire laterals from another firm, it is a known commodity – they know generally what it means to work at a firm and have a good idea of what your experience is. For in-house, even if you are a fantastic candidate, the unfortunate reality is that the firm does know what you did for the last few years. You can get over this by putting together a strong cover letter explaining your killer experience, and having a compelling interview. But it is something you have to fight against in the application process. The proof is in the pudding: for law firm lateral roles on Lateral Hub, count how many ask for “x years of experience at a top law firm” and don’t mention in-house.
If you decide to move in-house, especially early in your career, it can be a really great move. But you need to make sure you are comfortable with the idea of carving out a career as an in-house attorney from that point (which can be a great thing) without relying on the definite idea of going back to a big firm.
As I mentioned above, it is definitely possible to go back to a firm, especially in a strong lateral market, and depending on the in-house role you had. But it is not the same as moving from a firm.
The Comp
There are some (definitely not all) in-house jobs that can compete on salary for junior associates. They are looking for someone smart and hard-working, and have the budget to pay a $200K+ salary. Because junior associates bonuses are not thaaatt high compared to mid-levels/seniors, the in-house pay can be competitive, even without a large bonus.
Where in-house pay often deviates from BigLaw pay is higher up the scale. 5th-year associates on the highest BigLaw scale make over $450K all-in (including salary and bonus), a 70% increase from all-in 2nd-year associate pay. Although an in-house job may be able to pay $200K+ to you as a junior associate, it is highly unlikely that the in-house job will have the same annual raises of a BigLaw firm.
Another element of compensation is equity. There is a big difference between equity in a large, established company, especially one that is publicly traded, and equity in a smaller, growing company. I know multiple in-house attorneys who lost a significant amount of compensation when the stock price of the company plummeted. The most common scenario is that the stock price increases at a normal pace or stays the same. Unless you joined Nvidia six months ago, it is unlikely to join a company with equity comp for publicly traded shares and see it grow by leaps and bounds.
Now, take a growing startup, maybe Series B stage. You might be the first or second legal hire with nice stock options. There is a lot of upside here – if the company continues to grow and exits (by being acquired or going public), you make a significant amount of money on that, since you got in on the ground floor. However, with upside also comes risk – the company may not survive until exit, and the stock option portion of your compensation may end up being worth nothing. This is the risk in that sector of the market, and given the upside involved, and maybe it means you take a shot with 3 or 4 fast-growing startups throughout your career. (This is a completely different conversation, but be careful jumping in-house to a startup working on the “shiny new thing” – many attorneys who joined Web3 or blockchain startups in 2021 likely did not see their equity compensation grow, and the company might not even exist anymore. AI is that thing right now – even if AI is the future, there is a lot of VC money being pumped in right now, and it remains to be seen which AI companies actually survive.)
The risk-reward of equity comp depending on the stage of the company is a strong consideration when it comes to compensation.
If you are disgruntled in your current job as a junior associate – maybe you are working too much, or feel like you are not maximizing your strengths – it is easy to make the jump to in-house and worry about tomorrow’s compensation… tomorrow. Depending on your long-term financial goals and personal plans, this is something to strongly consider, to make sure your salary is not stunted lower than you want it to be later in your career.
