Articles Posted in Talent

The Canadian Corporate Counsel Association, in partnership with the law firm of Davies Ward Phillips & Vineberg, asked its members about the advantages of working within a company over working in a law firm. It gave the respondents a dozen items and asked them to rate the items from 0 to 10.

Here are the dozen, from the 2007 In-House Corporate Counsel Barometer, at 7, and the percentage of the 722 respondents who ranked the item in their top three choices. Being an active part of business decisions (72%), applying legal training to a business environment (64%), enhancement of business skills (62%), variety of legal work (57%), working for one client (55%), work hours (48%), non-legal career advancement opportunities (43%), benefits package (39%), variable compensation (bonus/stock options) (29%), prestige of the organization (24%), perks (21%), and legal career advancement opportunities (12%).

It’s worth heeding that the lowest-ranked five have to do with money, whereas the top three choices each integrate legal and business capabilities.

A disturbing finding surfaced in the Canadian Corporate Counsel Association survey of its members for the 2007 In-House Corporate Counsel Barometer, at 4. Based on 722 responses, the report concludes that “in-house corporate counsel are still on the fence about whether or not they are losing touch with the practice of law by working outside of a law firm (51% think they are, 49% do not think so).”

It is disconcerting that the survey sponsors, the law firm of Davies Ward Phillips & Vineberg, even thought that it was appropriate to ask the question top. Even more upsetting is how many in-house lawyers perceive that their legal skills erode once they go in-house. The unstated presumption is that to practice law in a private law firm is to practice real, genuine and authentic law.

Data from the Inside Counsel, April 2000 at 60, shows that general counsel compensation rises steadily if you compare positions in companies that have increasing amounts of annual revenue. From an average of $291,000 for companies with revenue of $300 million or less through $380,000 for companies with revenues of one-to-three billion, average pay rises to $674,900 for General Counsel at companies with more than $10 billion in annual revenue.

What the data does not show, and I have never seen analyzed, is the correlation between the years of experience of general counsel and the size of the company that employs them. My hypothesis would be that larger companies hire more experienced general counsel, so the real driver of general counsel compensation is more their years out of law school than the size of the client.

Corporate Counsel reports that Accenture’s legal department has teamed with DLA Piper, one of its 25 primary law firms, “to share several summer associates this year, and give them a taste of in-house life.” This sentence from Corp. Counsel, Vol. 14, May 2007 at 96, makes me wonder whether Accenture is paying for those summer associates who work with it, or whether the company is to some extent drafting behind its relationship with DLA Piper.

The article also implies that the summer associates can’t choose to join the law department upon graduation from law school. (See my post of Dec. 21, 2005 that refers to Lucent Technologies’ law department and Orrick Harrington jointly interviewing for new lawyers; and Sept. 18, 2006 about Citigroup and some New York City law firms.).

At offsite retreats or for special occasions, law department members often receive items that memorialize the event (See my post of Sept. 22, 2005 on memorable retreats, and my article.). During my consulting odyssey, I too have collected my share of these corporate trinkets.

Some that come to mind, and which I still wear, see, or enjoy, include my Timberland wallet, Emory t-shirt, Boeing Lucite pyramid, Colgate-Palmolive toothbrush-and-toothpaste tie, Diageo wine, Pharmacia notepad, Lucent Law Conference pullover, MetLife warmer, and Arthur Andersen shirt.

Underpaid in-house lawyers who retain highly-paid partners marvel at whopping figures of profits per partner (See my posts of March 6, 2006 on international comparisons; and Aug. 26, 2006 about “Law firms make too much.”). Aside from income envy, many people attribute high intelligence to those with high earnings. That’s not so smart.

Consider research from Ohio State University as summarized in Bus. Week, May 7, 2007 at 79. The study analyzed data on 7,403 Americans who took part in a Bureau of Labor Statistics study begun almost 30 years ago. The BLS has collected data on income, net wealth and IQ. “While those with the highest IQ scores tended to earn more than others, they seemed just as likely to wind up in dire financial straits and no more likely to acquire great wealth.” Apparently brainier people do generally have higher incomes, but they don’t save as much of what they earn. One speculation is that the unusually clever are more likely to take financial risks. Thus, income does not necessarily indicate intelligence.

When you reflect on small law departments, ones with fewer than five lawyers, you realize that their hiring practices differ markedly from those of large law departments. Consider the law department of the real estate investment trust, COPT, which has four lawyers, as described in GC Mid-Atlantic, March 2007 at 8. Each lawyer is a generalist, able to handle nearly any matter that comes through the office.

To bring aboard an additional lawyer, which the COPT department is in the process of doing, intrudes on a delicate balance of incumbent personalities and abilities. Growing the number of a department’s lawyers by one-third or one-quarter with a single hire is a major decision, a budget bender, and untested waters for client relations. Just as a new member of a musical quartet needs to mesh far more finely than one more musician in an orchestra, the new lawyer of a small department is a drop in a tiny thimble compared to a drop in a large department’s bucket.

I heard a new twist on sources of hires (See my post of March 26, 2007 with statistics on various sources.). A company I know is a major player in a health-care industry. Its general counsel has found it too difficult to recruit lawyers from the few other law departments in the industry, both because of non-compete or confidentiality limitations and because the lawyer would have to relocate.

As a result of these difficulties, for the past several years the department has hired from local law firms and trained those fifth-to-seventh year associates in the company’s business and legal nuances.

Ironically, once hired, the same reasons that make hiring difficult make the decision of a lawyer who wants to leave hard. Where can you go? The situation is similar to a company whose law department is located in a remote or small city. Though hard to attract people to the outpost, once there, few choices exist for them to pursue locally.

A piece in Business Week, May 21, 2007 at 88, bemoans the penchant for many hard-working Americans to forego chunks of their vacation days. The article cites statistics about what percentage of executives bank more and more vacation days – or lose them – as they pride themselves on being irreplaceable.

My assumption, supported I regret by no metrics, is that most in-house attorneys are entitled to three to four weeks of vacation a year, plus the usual assortment of personal days and holidays. How many of those vacation days (called holidays in Europe) they take is to my knowledge an empirical void. It’s still probably true that, with some regularity, the most senior lawyers take less than their allotted days.

Even when someone takes a vacation, the article notes, the person is probably tethered to the office by laptop, blackberry, cell phones, and express mail packages. Vacations not taken or vacations marred by electronic leeches cannot effectively relieve stress (See my posts of April 16, 2006 on stress and solo in-house lawyers; Aug. 2, 2006 on Scottish stress management; June 5, 2006 and June 12, 2005 on stress among in-house lawyers; Feb. 8, 2006 on litigation stress; Dec. 12, 2006 on “extreme jobs”; and May 2, 2007 on stress after promotion).

A managing attorney from an insurance company’s law department explained at a panel a recent initiative. Her department undertook to identify 20 activities that lawyers were doing but which they could pass on to a paralegal, administrative assistant or other support person. To the surprise of management, it proved easy to identify 20 opportunities, so they set their sights higher.

At last count, some 68 tasks or responsibilities had been spotted and reassigned. What energized this initiative was the enthusiasm with which the staff members sought the additional responsibilities, variety of work, and learning experience. Lawyers may not have wanted to do certain tasks, such as tracking UCC continuation statements, but to someone else that task was refreshing and challenging.