As experts in legal recruitment we regularly support candidates as they look at their options transitioning between private practice and in-house positions. There seems to be a common perception that in-house involves a greater variety of work and work-life-balance. In today’s blog we explore if this is really the case and uncover what the main differences between the two are including scope of work, working expectations, career progression and salaries.
In any hiring decision there needs to be a business case for it. Lawyers working in-house are a cost to the business whereas lawyers working in a law firm are fee generators. In the market this translates as in-house legal teams recruiting after a role has already been approved with a position description and understanding of the cost to the business. In contrast, law firms may not be actively recruiting but are more likely to consider an opportunistic hire if a quality candidate is presented, as they will be a revenue generator for the firm adding value to a firm’s service offering. We don’t often see a position description for a private practice role, usually that is set in stone once someone has been hired.
Team structure & workflow management
Within a private practice environment you have the ability to hone in on specific skillsets under the mentorship of experienced lawyers and partners. Regular feedback and performance / salary reviews are built in enabling continual upskilling in a structured manner.
Workflows tend to be directed by the Partners, where the lawyers complete the work and it then gets reviewed by the partners. The variety of work comes from the various clients the firm works with including across a range of industry sectors.
Legal teams in organisations are often leaner. There is less structure as to how work comes in and advice provided to the business e.g. someone from the operations team may come over to the lawyer’s desk and ask a question around privacy and advice could be given on the spot without the need for a legal opinion.
An in-house lawyer will typically work with external lawyers when unique legal issues arise or due to a lack of internal capacity. In these situations the role of the in-house lawyer is to apply the external legal advice to the business in a commercially pragmatic manner, effectively communicating the recommendations / options to key stakeholders.
Scope of role and work
For in-house, the scope of work will be different and dependent on the business operations and required areas of attention. Within a large corporate; eg: bank or insurance company, there may be a larger legal team and you may be in a more specialised area eg: enforcement team, corporate or the Claims team. Within a small or medium sized business (or an international business with a smaller presence in NZ), you will find the legal team may be just you, or yourself and one other where you would be working across a wider range of areas e.g. commercial contracts, privacy, IP, employment law matters, corporate governance and disputes management.
These roles usually have a broader scope than those working in a specific team in a law firm, not just in terms of legal practice areas, but also relationship management, governance and the commercial pragmatism expected from stakeholders.
There is a general perception that working in-house provides a stronger work-life balance. This can be true in many cases, and traditionally in-house has offered greater flexibility and hybrid working models, which has contributed towards the elusive work/life balance. Where we see longer working hours in-house is when there are tight budgetary constraints and lack of external legal support, so in-house lawyers can become constantly very busy with pressure from the business to deliver results - so it really just depends on how well-supported the in-house legal team is.
Due to client demands, turnaround times and time recording targets, law firm hours can sometimes be longer than in-house. Law firms are however increasingly offering hybrid working models, flexibility in start / finish times and looking at ways to manage workflows better for the well-being of those in the teams. With greater focus on achieving a balance from the leadership team, the difference in hours is starting to become more similar between in-house legal and law firm teams.
As law firms can have peaks and troughs in work, we are seeing more firms allow their lawyers to have downtime and time off when there are troughs to make up for the longer hours during peaks e.g. after a major transaction ending or at the conclusion of a litigated court case. Whether a firm is large or small, the level of work/life balance really depends on the team you’re in, how well resourced it is and the support in place.
Progression looks different in-house vs in private practice.
In law firms, career progression has a well defined structure and pathway. There is greater certainty around when you might be promoted from e.g Solicitor to Senior Solicitor. This is typically based on years of experience, while also taking into account the level of client and file management as well as other responsibilities you are able to take on.
Working in-house, there is room to progress upwards from e.g. Legal Counsel to Senior Legal Counsel but often the timeframes are less certain and less based on years of experience. Upwards progression may, for example, depend on someone more senior moving into a new role to create a gap, or a business case being made to create a new senior level role. Career progression in-house can also be considered as expanding the scope of your role and work e.g. going from Legal Counsel to Legal and Commercial Manager.
Salaries & benefits
In house salaries are generally fixed in their banding. Junior lawyers have tended to get paid higher when working in-house but the increases are often not as high year on year, and there will be a bigger salary jump when moving into a new role or more senior role rather than it being based on experience (this is due to the set banding for each role so once a ceiling in the role is reached, a higher level role is needed to have salary progression).
Aligned to career progression, salary reviews are typically reviewed yearly in law firms. Led by larger law firms, we have seen salaries increase significantly (compared to previous years) at more junior levels in firms which has had a flow on effect to more senior level lawyers and smaller law firms too. This has helped bridge the gap between in-house legal and law firm salaries where they are now a lot more comparable whereas in the past in-house salaries might have been noticeably higher.
Law firms don’t typically set a band for a role as there usually is openness to the level / background of the hire (e.g a firm might be hiring for a 3-6 year Corporate lawyer). The salary will depend on the relevant skills / experience, future potential, how much the firm will want the person and there is usually more scope to be flexible on the level of salary offered.
In the public sector, there have been pay freezes in many in-house legal roles and while junior level roles have paid higher than in law firms, getting increases in salary are typically not as high as the increases seen in the private sector year on year.
Typically there is a stronger benefits package associated with corporates including insurance and medical discounts, greater working from home days, paid parental leave benefits and of course no pressure of billable hours. Having said that, law firms have now also started offering some of these benefits (such as extended parental leave benefits) and we are starting to see time in lieu and compensation introduced if lawyers work longer hours.
What you need to consider
If you are considering your options to move in-house we recommend thinking about the following:
• Your level: A majority of in-house legal roles we’ve seen are at a 5-8 year level (or more senior) as that’s when lawyers have built up their technical legal skills to a certain level to be of value to an organisation and can work with a greater degree of autonomy. If you’re a junior lawyer interested in a move in-house then we recommend finding out what support there will be for your ongoing learning and development with an in-house role. Will you be the sole legal counsel expected to turn your hand to a wide range of practice areas? Will you have external legal counsel resources to rely on?
• Transferability: some areas of practice e.g. corporate and commercial legal experience transfer naturally into many in-house legal roles. If you’re working in an area that is more specialised or a solely disputes focused role, then a larger organisation with a bigger in-house team might suit best as they are more likely to have lawyers with various specialised skill-sets in the team.
• Career goals and working environment: those that prefer a more structured work environment, with a more defined pathway for progression and growing your technical legal skills as part of a team of legal experts, might be best suited developing their career in a law firm. Lawyers that enjoy working closely with a business, with a keenness to understand business drivers and risk, agility to deal with ad hoc queries that come up and having a role that is often broader in its parameters, might prefer in-house.
• Once you make the move in-house, it is possible to return to a law firm and we have seen examples of senior lawyers successfully make the transition back to a firm taking along with them commercial nous developed while working in-house. It will depend on the areas of experience gained while in-house and sometimes how long you’ve been working in-house (i.e. the longer it’s been, the more difficult that transition back may be).
If you are considering the in-house vs private practice route give @Pippa or @Anand a call to discuss what opportunities will fit in with your drivers and career goals.