[00:00:00] is he's like nowhere. No. Zen is set in float tank or something. I don't know.
The cops are like taking pictures of that car out. Which one?
which car is it? A navigator? Oh yeah. I saw that when I parked, I didn't recognize it.
no 5 7 4 7 6 2 900. And then that video I sent you this morning, he needs that right away.
okay. So we're going to get started. This week's webinars, this particular topic is is a very important topic actually, because one of the things that happens is a lot of attorneys do make a decision many times to go and house and 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. And so today I'm going to go over some of the reasons that going in house can be 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's a, [00:01:00] it goes in a lot more depth than it's called why going in house is the worst decision any attorney can make.
And and that's also something you may want to look at now I'll say at the start that I do make in-house placement, so I'm not saying it's necessarily a horrible thing for everybody, but there, there are a significant problems with it. And so what I'll do is I'll do the presentation this isn't a super long presentation, but it is there, there is a bit of depth to it.
And then after 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. Oh, so I'm going to talk to you today about insight 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 and at the outset, I it's important to understand that a lot of attorneys believe that going in houses is, was a very good decision for them. But a lot of them believed the opposite.
And and I say that for the past, 20 plus years I've been reviewing hundreds of [00:02:00] resumes every day. And 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 in 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 it 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 in a law firm, if you play it out and get business and because you're a cost center and then 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.
So there's. Problems many times with going in house and in, in my opinion, it's an extremely significant decision. And many people go in house when they would probably better off just going to another law firm. And honestly it's probably among the most significant decisions that most attorneys will ever make.
It's it's that important and drastically affect your future and [00:03:00] it could do so in a positive way. I If you wind up in the correct in-house position you often are going to be much happier and 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, so 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 also work for a company or a public interest or you could also say the government and in just different types of legal environments that typically aren't charging the public for the services.
And th the problem is when you work for a company th 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 and that's just kinda how that job works. And in different in-house jobs have different responsibilities.
In, some of them will deal with corporate law of mergers and acquisitions some deal with litigation, real estate healthcare in other practice areas. If you're in a large [00:04:00] company, you tend to be working on smaller matters more discrete matters. So you'll work on one aspect of tax law or one aspect of mergers and acquisitions in a larger company.
And the same thing with patents and intellectual property and real estate. And then in smaller companies, you may work on multiple different practice areas. And and that's just, and you may be a Jack of all trades in a smaller company. So you may handle things for the company, founder, you may their personal matters, you may handle pretty much everything that the company does.
And what happens in that situation is 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, what would be brought in and as an in-house attorney you're doing really the work that the You know that they're not that they don't think that they would brother that they don't think is serious enough to bring in a law firm, if anything gets as sophisticated you're typically pulled out and someone else has given the [00:05:00] work to do the reason a lot of attorneys go in house is because it, depending on where you work you could have a much shorter hours. A lot of companies there's some companies that I drive by I, sometimes I, when I w when I leave my office, I drive by companies and there are companies that, if I drive by at six o'clock at night, the they're practically empty and they might have, hundreds of people working there that I'm thinking of a one big software company with, huge office park and you drive by at six and they're gone.
And so that can be a lot of people will enjoy working in 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. In-house company and have stock options that are worth, two to 3 million or even more 4 million within a few years and then cash out and [00:06:00] have other options.
So 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. And and and also you're on the business side of things. So when you're in 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 making getting in the way of the firm making money and so forth. So there's just issues without because attorneys, jobs are typically the, counsel employer, they're, they're the people that they're working for and helping them avoid problems.
But for you, it may be a good idea but there's a lot of factors that you need to understand about going in-house that may make it a very bad career move. And and I just, I hate to say this because there's really so much to going in house. And 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 I [00:07:00] reviewed resumes all day long and and I have been again for 20 plus years. And 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 a personal injury. It could be workers' compensation, litigation, corporate immigration. I'll probably be interested in talking to you and have something for you that I, or at least jobs I can send you.
It's just, it's 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 you're 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.
So there's plenty of jobs out there. If you, 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 [00:08:00] crowded markets, but if you get out into the suburbs and stuff, there's plenty of openings and there's just jobs everywhere for a law firm attorneys.
The problem is the law firm attorneys typically are not going to be as interested in-house attorneys. And there's just 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 law firm attorney or in-house attorneys is just because a law firm attorney w is working for paying clients.
And there are certain standards that are required and they're used to hours and deadlines and and and getting, doing a work that people are actually paying for. There's certain people that work in law firms, certain people that work in house, and then people know that you typically, if you leave a a law firm you're most often going to leave again.
And and so they just that's not something that the law firms are that excited about hiring. So I, 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 they'll have either worked with them or have a recruiters where the people in house that are in certain practice [00:09:00] 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's a lot more jobs for lawyers and law firms, and there are in house. And the other thing is most attorneys, when they do go on house. Ever get these economic windfalls.
It's actually very rare. No, it depends on your practice area, but most of them end up going to established companies. And so if you go to an established company, you're typically which, which is going to have the higher salary more prestige, you're typically not going to get, make a ton of money.
Now you may, if you take a huge risk and go to some place in Silicon valley or New York that starting up and ends up being successful, but most startup businesses aren't successful. So it's just, it's it's a risk. And and it's a risk you may decide to take, but it's a, you have to do your homework and do your diligence and really believe in the company that you're going to.
And it's 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. And I've known attorneys that have, and [00:10:00] it can be a great thing when it happens. And also the other thing is it's very difficult to move to another in-house job.
Most attorneys, like I talked in attorneys in New York city and, Silicon valley and stuff all day long. And and a lot of them will spend, years trying to get their first in-house job there, and it depends on your practice here at Carter's, but they'll spend a lot of time.
So it's actually much easier to get an in-house job. And 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 hungry or you're going to you're going to have a transferable skills. You're not going to, you're still going to be hungry and and in house jobs are not able really to train attorneys as well.
So there's just, so once you go in house it's much more difficult to get an in house job and other in-house job than it is to get your first in-house job. So 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.
And they can't believe how things are going. And I [00:11:00] would say that happens to about 10% of the people another 20 to 30% don't last more than six to nine months. And then 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 and it's just, it becomes very difficult to get another position.
And then the next thing is and then, and move to different states. And I see things all the time where people do stuff like, they move to, some weird area of color or. And or some weird area of the state and they get up and they move their whole family and then they get there and the company closes or they lose their jobs.
It's just, it's difficult. Typically you're working for a company and the company has a CEO and the company has a COO and people that don't like, you they'll just get rid of you. They don't, they want people that are going to help them grow the business. They don't want people that they feel are adverse to them, and there's just all sorts of other issues.
And the other thing is your legal skills are likely to deteriorate once you go in house. And so what that means is, again, like law firms are working on [00:12:00] 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's been done and then you're working for paying clients and they expect a certain type of work to be done.
And you need to be on top of different trends and things in order to get clients and to impress clients because it's a campaign market. And 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.
So pretty much every in-house attorney that I've ever hired. That's been an in-house attorney before his base. Just have all these relationships with law firms. And all they're really interested in doing is rewarding in giving them 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 that is from a law firm that law firm that they don't have all those relationships with law firms and they're more [00:13:00] eager to do the work themselves. And that's actually better for the company because we say money and all sorts of things. But th there's just different skills that an in-house attorney has.
And over time they become experts in giving away work as opposed. And it becomes very political as opposed to doing the work and it doesn't necessarily, and it doesn't help you. And that's one reason that law firms, don't always in-house attorneys. And then the final thing is in many companies you actually work much harder than you did in a law firm.
You could work incredible hours in house. And and you may, you're suddenly working for, the founders of the company or this, the, the high, a high level executive team. And you're working for people that are even more aggressive than the most aggressive attorneys in the largest firms.
And they expect you, it's not uncommon for people to be expected to show up. I have people showing up and 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. And you actually may work as hard in house many in-house companies also [00:14:00] attract their employees, their hours of their people that they're their companies.
So they don't always give the attorneys the type of freedom that they would get in a law firm, they may have software that records how much time they were getting if they work remotely and so forth. So it can be difficult. So that's an introduction to some of the issues with going in house.
And then I will now talk a little bit about a few of the the issues that you know, that you know, the, these issues that I've brought up. But the first thing just be really aware of is it's very difficult once you go in house to get a job with another law firm.
And th the thing I say to people all the time is, in, in most states regardless of where you are, I don't care if you're in, rural, and it doesn't matter. There's tons of law firms that, I their law firms are in every city of the country. There's litigators and, law firms, cities are 3000 people.
The law firms everywhere. There's legal work everywhere. If you want to work in a law firm, it's just, it's so prevalent. It's unbelievable. And the [00:15:00] laws for getting a job in a law firm aren't really that difficult. You either need to have a specialized scale, 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 trust in the states. You could do insurance defense. You could do a 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, may not want to work in, 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. I You can keep working, you can do this law firm game forever. It's it's in companies, wow. You're talking about a whole different set of rules, but, and then if you want to stay in a large law firm or a sized law firm, at some point, you probably need to get business and 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.
I'm telling you it's, if you're not [00:16:00] 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, but it's anybody can get. In a law firm, there's law firms in any state you're in there's thousands of law firms or tens of thousands it's in, just in Los Angeles.
It's there's new law firms starting probably every hour of every day. It's there's thousands and thousands of them in every, there's so many of them and there's, and these law firms have work and they need people to help them. And it's just and they have all different cultures and sizes and things about them that make them good and bad.
But the thing I want to say is that attorneys are contacting us all the time that have been in-house and many times want to go to a law firm again. And 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 they worked at this major firm before.
Now 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 [00:17:00] firms don't want them because you're just sending the message that you're going to leave again, that you don't like this environment that you're, that you're showing them that your skills are probably deteriorated.
That you're that you're not as interested in being in a law firm compared to other places and everyone in a law firm knows. And when someone goes to in-house, that person is. Going to leave again. And doesn't like working in a law firm and that's fine. It's not that you don't like working in a law firm though.
I would say it's probably the type of law firm you're in. And so if you ever go to in-house the odds of you getting a job in a large law firm again are very slim. And and so you just need to be aware of that. Now 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 now. That's not always the case, but it is a lot. Now during the late nineties to the first part of 2000 there's so many attorneys that went in house and in sorta going on again now, but I would say that, one of the things that I saw was probably [00:18:00] 65 to 70% of those attorneys who left law firms during that period of time.
And this was during the, when there was a.com boom, and all this stuff was going on, plus a significant percentage of the attorneys left during that time lost their jobs in 18 months. And most of those people that tried to return from those in-house jobs. And and I would say.
60% and had all sorts of reasons why they believe they made a mistake. And I would say out of those attorneys, and we're talking about tens of thousands of people very few of them ever we'll land at the jobs at the same prestige level. And I would say less than 50% were successful at getting a job at another law firm at all.
And these were, graduates from, top law schools and coming from the best firms that had done this many times. You just 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, unproven business model, even general electric which is he used to be one of the safest places in the world to work.
Let you know, I remember a couple of years ago it was letting go, like all [00:19:00] of their attorneys. I There's, you just don't know things changed rapidly. Think about just in the, in, in your, in this, 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 and just the world changes.
And and when it does companies go out of business, law firms typically just keep plugging along. They have, and nothing changes. So if you're going to go to work for a company you better be prepared that, that. At some point is going to probably have problems and and you're going to lose your job or it's going to get new management.
So it's very difficult to get back. And so 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 I don't know about seeing the next Yahoo cause who is not doing that well, but it's just the, the it's just every year accomplished attorneys leave large law firms going house, and then I have a bad experience and they had time to try to return.
And even in the best of times companies will cut back on their legal departments, go [00:20:00] out of business. They'll merge. The company will, when they, when a CEO of a company or a general counsel of a company comes into a new role, or when that switches over companies always, they come in and they 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 kinda how it works and 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 [00:21:00] 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 what most law firms, how they work and on the expectations on why that's a good business model what typically happens in a 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 be, become an expert in your practice area. You can do it in five years or, but it typically takes a, and this is another thing to be, to really know what you're doing as a corporate attorney, as a 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, it's 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 from 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 develop skills.
These skills involve relating to [00:22:00] clients communicating with people make partner, take a council position or move to a smaller firm as a partner associate or a counsel. That's just kinda how the way the world works and 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 rise to better and better challenges.
You, you litigate her will, first maybe do a discovery and then they'll from discovery, then move on to writing parts of briefs, and then they may write a whole brief, and then they may go to do a deposition and then they may go to court and argue as part of emotion. And 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 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 and getting an increased responsibility.
[00:23:00] And developing your skills and so forth. And as you do that, your billing rate increases you'll get supposed to get closer to clients. You develop any 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 you're the firms are set up to make you grow.
And 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're bringing in a giant public company in order to become a partner or stay a partner. So it's just, 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. You don't, growing is a good thing for you and and people pay money to have be put in positions where they're growing. I I have a 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 [00:24:00] on this webinar, anybody that's trying to learn from someone that understands anything.
It doesn't have to be me. He could talk, go 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 and learning is important. And that's what a law firm does. And and law firms will try to make you the best you can be.
And and it's in their self-interested yourself. Young associates may work with mid level to senior associates, and then those senior associates are being supervised by partners. And in sheer kind of 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 offer firms do for you. And and becoming better at something is a tool you can use if you're [00:25:00] 25 years old and frustrated by being in a law firm, think about all this 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 65 years old, most attorneys are still working. So all of these systems of a lot of law firms, attorneys are still working in 65, every step of the way there's checks and balances the law firms are trying 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 all of that stops and and there's no, if you're working right now at a major law firm say, you're working at a good law firm, a good law firm, Sydney, 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 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, mayor brown and other good, from, people know but you know what it means to come out. I don't [00:26:00] 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, but they're what they're going to be like.
And how. Th the expectations, but 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's no checks and balances in most of them. And 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 that just doesn't, 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 lawyer outside counsel to make the in-house attorney feel good about themselves because then they'll get more work.
So even if even you can turn in the biggest piece of crap work and as an in-house attorney to your law firm, and many times that law firm will praise it and say what good it is. And they'll tell your bosses what good work you do and [00:27:00] stuff. So your work is not going to be criticized and you're not going to be held to high standards.
In-house attorneys really represent people to be flattered and to a threat, to getting worked for being 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 I'd like to ask for your ego, but at the same time, you're not going to be challenged as much.
And. There's a lot of exceptions many major companies and in New York Silicon valley and Midwest, there, there's hedge funds and all sorts of people that need very specialized types of attorneys and and that's perfectly fine and they do hire specialized attorneys.
And so there are exceptions and that is. There's real estate companies that hire people that only do leases and, 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.
Like I can, there's a lot of practice areas. There's something like, in terms [00:28:00] of the ones that I just look at when I classify an attorney, I have over 75 and there's probably there's even more than that. But the idea of being a generalist means they don't, that's just not going to appeal at a law firm.
So law firms want specialists because if you're a specialist, that means 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. And and 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. It's not good use of their money. They may not have interest in the practice area. They can be outmaneuvered by attorneys that are specialist as opposed to generalist. I If I go up against a patent attorney with no knowledge of patent law, I'm going to just.
Di, I'm going to lose whatever, patent competition or, it just doesn't make any sense. While you may believe it's interesting 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 [00:29:00] you'll understand something in a lot of depth. And 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. And so that 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. And and it doesn't demonstrate that commitment demonstrates a lack of understanding of the importance of specialists, specialization of being trained of a challenge in your stuff and growing. And you're just putting yourself and on a path that frankly lawyers or in law firms don't respect as much, and there's nothing wrong with that.
And I'm not saying that, 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. But and there's tons of people that go and have some go back to law firms and just some example.
Prosecutors. I played from in-house to law [00:30:00] firms constantly. I have them interviewing every week. I have real estate attorneys. I have corporate attorneys are less rare, but it does happen. There's people from healthcare that are in hospitals and things can do it sometimes.
There's there's lots of people that can do it in different types of roles. And there's some very important general council rule roles. Where, you may be a Disney or general motors or something along those lines where you could potentially go back.
But in most cases it's very difficult and and it's not as easy, but if you have very good contacts you know that then you can potentially do it. So 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 it, this is just 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. And just make sure you understand that the economic windfall argument I bring up because I think a lot of people believe that they are going to.
Have economic windfalls and I know several [00:31:00] attorneys that I hired one once that went in house and got, I think $4 million. And he was in, and worked there for two or three years and and wound up with two after taxes, but, and so stories like that become very appealing to an attorney.
And and a lot of the reasons for the salary increases when I was back in the nineties the salaries of attorneys and the big firms were, I don't know, they were around 85 of the starting salaries up until around 2000 then, oh, 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 raise her salary to one 20 and then all the other firms followed. And then and then some point along the line, they raised them to 1 35 and the salaries just kept increasing because there was all this competition for men house jobs, because people did want to have the opportunity to participate in this lottery of stock options, which could, it is a good thing for a lot of people and you can do well.
And and [00:32:00] so the story. Circulate very widely the Sur the stories of people that don't do well, when that happens, don't circulate as wildly, but these stories certainly just circulate and then everyone is jealous and wants to be part of it. And they'll say, oh I was a better attorney than that person.
Why did they happen to them? And and so it happens. And and it's still happening. I I we don't do a lot of in-house placements here, but I have attorneys that, you know, that I placed and that I know other people have that have gone in house and have done well with with stock options.
Now it's rare, but it does happen. It happens a lot more often now that someone gets a multimillion dollar wind in a law firm and I went to caves, but people don't talk about that as much. You actually can do very well. I've had people work for me that the only people that I had actually worked for me that had had these multi-million dollar wind poses.
I had one guy come to work for me that he was an in-house litigator and he decided he wanted to set up his own practice and went to personal injury law. And he's done, hundreds of millions of dollars in settlements. Now, how much of that is clear, but he's done very well. I'll hold it just according to his website.
And which is [00:33:00] much more than anybody would do in house. Assuming he's getting 40% of that. And I and just the statements he's making are true. Which I believe they are. He's probably doing very well. And then again, in the, corporate attorneys are the ones that are always most at risk.
Corporate attorneys become very marketed to law firms when the economy is doing well and they become marketable because companies want them and then law firms want them. And and they often are receiving just lots and lots of calls from recruiters. And if you're a corporate attorney listening to this during a good economy, how active things are.
And a lot of times these corporate attorneys would go in house and and they'll flock to the startup companies, a belief that their skills were rich. And but the problem is these stories are not as common as people would like to believe. And I'd say, probably one in 50 attorneys that leave a prestigious law firm ever end up making more money in house and 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 [00:34:00] very well. I'm not in any way discounting it because you can do well. And I'm not a, but it's tough.
It's tougher than a law firm because a lot of it is dependent on luck. It's not dependent. It's dependent on the luck of the company being the right company, having the right man. Whereas if you have a big book of business, you can go to work at most law firms and do that. And it doesn't, it's not just dependent on luck, it's dependent on you being able to bring in the business.
And so just 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 and and you can make it again. I don't want to in any way just kinda cause I've seen it. And if you're one if you stick with your law firm job your whole career and and you enjoy practicing law, then you probably don't want to retire because you'll just like work.
And 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 liar, salaries keep rising. They keep going up. They've [00:35:00] more than doubled over the past 20 years.
So over the next 20 years if starting attorneys are making, at the high end $200,000, now there'll be making $400,000 in 20 years. And and so just think about that. And the fact that things keep going up in law firms and the opportunities keep going on there. And I would say that most people that stay in law firms are in a position to be financially independent after a couple of decades.
I You can do well in a law firm. And and the thing is with the law firm is you typically could stay there so you can stay in the law firm as long as you, if if you were forced to leave a major law firm, you can always go to a smaller law firm or a smaller market and get a job.
And you just can't do that when you're in house. I You don't have necessarily the same skills and and very few attorneys ever make money with stock options and that sort of thing inside of law firms. And and and it's just there's just a lot of money to be made in a more firms.
And there's a lot of opportunities to be made. I know people that, you know, and just so you understand how much money you can make in law firms. I know people that are just, and [00:36:00] I don't mean this in a disrespectful way, but they're nerds. There are people that you wouldn't think, would be that that you would get together with them and they would want to, play video games.
They have skills. They know how to, they, they network with a few people and they're able to bring in business and and 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. But if you bring in a, 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. So if you have a, 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, so you can make a lot of money working in law firms, a ton of money. And and it's not that hard. One, one litigation case can do pay for a lot. One of the things I've seen a lot of people do, and I'm just trying to get you [00:37:00] guys thinking how to think about all this, but I've seen like a lot of commercial litigators become divorced divorce attorneys from big firms.
A divorce can cost for someone it can cost millions of dollars just for one client. A trial in a divorce is typically 250,000. 500,000 and a good portion of that is legal fee. There's divorces one trust in the states is another, I there's so many practice areas that anyone can go into.
I know someone who's an immigration attorney that has a she went to like a, I think a local law school in Los Angeles Southwestern and couldn't get a job after she graduated because she was from Southwestern and and not at the top of her class. And 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 to this law firm game, you just have to learn it. And so if you're trying to make money, the odds of making money as a lawyer in a law firm or huge, or run your own law firm, you can do [00:38:00] unbelievably well. And there's all sorts of ways to learn these practice areas.
You can there's courses on how to be a trust in the state's attorney there's courses and how to, you can do it on your own, you can do it in a law firm. And we used to do a lot more in-house attorney placements. We still do, and I don't mind doing them but but and and I don't think they're bad.
I just want to think it's important that people understand what a law firm offers compared to an in house job. I when did I tell it. Story about an in-house job that, the gist is just a meeting with a startup company and it's not an atypical type of story. And and there's just a lot of short-sightedness and so people need to understand kind of the consequences.
So 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. And this was a long time ago, but the company had been, was looking for a general counsel and and had invited me to the meeting as a recruiter to, to, to learn more about the company and to help them with a search.
And they dealt with the the accounting industry and they've been started by a guy from Russia who had made a bunch of money illegally importing [00:39:00] cigarettes and direct without stamps on them. And then creating fake stamps that were stating that he paid taxes. You can believe it. And but 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. But the meeting started early in the morning and throughout the day a former us Senator and a major partner of a major international accounting firm and several partners in this particular law firm, enthusiastically talked about the company exchange ideas about how it can take over the world.
And the law firm of course, was also charging this guy by the hour. So they were all sitting there just trying to keep the meeting going and they had significant stock options and and everyone in the room did too. And and I was going to get paid in stock options as well.
And and they'd even hired someone to write a business plan and given him stock options. But about six hours in the meeting. And again, I'm, in this meeting, I'm very young. So I'm in, it doesn't matter how old I was, but I was certainly in my twenties and listening to this and and thought the whole thing was ridiculous after about six [00:40:00] 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 gonna 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 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 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 [00:41:00] 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 and it didn't make any sense. So I didn't believe whatever work. I explained that to them and and and 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 [00:42:00] 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 got a very well-paying job doing patent work in a a law firm in Silicon valley for, I don't know.
It was patent litigation, a $300,000 year plus job. He got a 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 [00:43:00] 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 and it happens with astonishing regularity and 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 [00:44:00] 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 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 [00:45:00] law firm goes out of business, it's 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 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 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 [00:46:00] 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 dunno like a delivery service or something, and 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 models. 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 if it's 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 teams. You just need to look out for. I just want you to really consider the stuff cause I'm trying to [00:47:00] 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 gonna, they're gonna, 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 [00:48:00] 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 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 [00:49:00] the idea of bringing these people in, they know, and trust is great. So they, th 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 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 [00:50:00] 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 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, and think about how often CEO's changed and so forth. The other day with with I dunno, the CFO of a big auto company.
And 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 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 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 [00:51:00] 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 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 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 [00:52:00] 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 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 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 [00:53:00] 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 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 [00:54:00] 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 example. 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.
In-house person to do a patent litigation for them because they were they made these toys and then the toys were, it was a toys. I don't know, they made this movie, it was car parts, but anyway, they made something and then people would