By Katie Lowe, January 2014
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1 From Private Practice to In House & Back: The Emerging Third Step in a Lawyer's Career & Lessons Learned By Katie Lowe, January 2014 One of the traditional career paths for a lawyer consists of two steps. The first step involves joining a law firm as an associate who will toil her way up the associate ladder for six or more years and wait for the proverbial tap on the shoulder from above. This simple act determines whether the associate is on track to partnership or if she should begin considering whether a more suitable employer for her unique skill set exists for her elsewhere in no rush, of course. Following the tap precious few associates will continue to partnership, while many more will continue to work at the firm without the promise of partnership or elect to lateral to another firm. Still more associates decide reassess their law firm careers. These associates ask themselves: What do I want to do for the rest of my life? Why did I become a lawyer? Should I consider a move in house? While there are other alternatives to in house work government, business and other non legal work the step in house is time honored and a natural extension of a lawyer s professional development. This move from a firm to a corporate legal department represents the second step in one of the traditional paths of a lawyer s career. A few years ago, a new trend was witnessed in the US and the UK with senior in house lawyers, who were formerly law firm lawyers, moving back to law firms as partners or consultants. This development is now also seen in Asia, and it denotes a new, third step in a lawyer s career. Let s take a look at what may be driving this third step, and what law firms can learn from this seemingly new candidate pool. The Second Step: Moving from Private Practice to In House Why Make the Move? Most people understand that the majority of newly qualified lawyers join a law firm as the first step in their career. However, there comes a time in many associates careers when they believe they have become a commodity. Consequently, unless a firm offers the associate progression, they tend to believe that other firms will do so, and so they make a lateral move hoping for a better chance of upward mobility. For other lawyers, especially corporate lawyers whom often have been working on transactions without the benefit of seeing the entire process from start to finish, a desire to move to the business side of the desk is planted and a move in house, the second step, comes into play. So when does a law firm lawyer jump to make that change? Some argue that waiting until his sixth year is wise. Why? At that point in his private practice development he will have attained a solid skill set, but will not be so set in his ways that he cannot be molded into the form desired by the corporate employer. It depends on the opportunity, of course. There are multinationals who routinely seek junior associates for their teams, but for those seeking more senior in house positions with greater responsibilities, a bit more seasoning at a firm is usually in order. 1
2 For those lawyers who stay in private practice beyond their sixth year or so and wonder if they have missed their chance to move in house, they can take solace because they have not. Today, many senior private practice lawyers (including senior equity partners) make the move in house. Why would these senior lawyers make this move after years in the bumpy upward spiral that is the path to partnership (and to some extent, Counsel), when they have reached the arguable pinnacle of private practice? For many practitioners in today s increasingly global law firms, the changing nature of law firm partnership itself may be the catalyst. In earlier days, partnership consisted of career long labor at a firm, building and fostering relationships (internally and externally) until making equity partner. Today, there are various reasons why partners might decide to make a move in house which include among others 1) pressure from new lateral partners joining their firm, 2) the recent flurry of law firm mergers in firms quests to increase their global footprints, or 3) yearning to be free of the billable hour. Reasons 1 and 2 often create a mixed set of standards for the firm and perhaps dilute the original firm values that a particular partner held dear prior to the new change, whereas anyone familiar with law firm practice is aware of unrelenting time keeping responsibilities. Amongst these myriad mergers and culture shifting lateral hires, lawyers seem to be looking to greener pastures with more conviction than ever before. They seek a place that will value their solid law firm practice skills, critical business connections and hard earned gravitas. This is where a move in house begins. The Third Step: Moving from In House back to Private Practice as a Partner Why, and What Lessons are Learned? Having navigated their way into an in house role, what fuels the move back into private practice? And what lessons and skill sets are acquired from an in house position that can be used in private practice? Some partners who made the jump back to a firm report that they felt they were losing an element of commerciality by remaining in their in house position. They also share that they sensed that they were losing touch with the market and the direction in which it was moving. Some of these partners felt that they had become isolated and to a degree began to feel alienated from some of their once core practice skills which were not fully exercised in house. They state that their perspective narrowed, and they craved to see the bigger picture again and to continue to broaden their legal skills. These sentiments were more deeply felt by in house lawyers who had greater exposure working with law firm lawyers/external counsel. In house lawyers viewed private practice lawyers with some envy as the law firm lawyers were seen as able to close a matter and move on to the next project, whereas the in house counsel just moves down his list of priorities or moves on to the next fire. Moreover, these inhouse counsel felt removed from the prospect of practicing on the cutting edge of the law which is a difficult prospect in house. Outside of the purely professional, there may be softer elements at play in the move back to private practice. Status, prestige and autonomy often are softer concerns that influence the return to a firm. This is unsurprising given the importance of the social position in Asian cultures. A lawyer working inhouse, because she is not a direct revenue generator, is a cost for her employer. This reality seems to 2
3 confer a drop in status and/or prestige (real or perceived) for the in house lawyer, as well as a general silencing of the lawyer s voice at least in terms of driving business forward. Another reason cited by some in house lawyers for their desire to move back to a firm, includes a yearning to integrate what they have learned in house back into a law firm having seen the full cycle of a deal or matter from both the client side and the outside counsel side. This experience uniquely positions an in house lawyer moving back to private practice to serve multinational and financial institutions (future clients) with better overall legal service. In addition, skills that a senior corporate counsel moving back into private practice has, include an indepth and, presumably, granular understanding of an industry and the ability to work as a better advocate for corporate clients along with a visceral understanding of what it means to receive cost effective legal service. Finally, it is not unprecedented that a law firm will gain the business of its newly hired lawyer s former employer. The exposure that in house lawyers have to broader corporate business practices can offer a future law firm employer novel ideas about streamlining operations and potentially putting in place more efficient operating practices as law firms, arguably, are old and anachronistic institutions. And while firms have varying degrees of demonstrated successes, compared to some multinational companies, law firms still need significant improvement in operating strategies. To put it bluntly, some law firms would do well to run like a business rather than like a law firm and who better to speak to these efficiencies than someone who has worked with corporate management. In house lawyers returning to firms can draw upon their experience in often highly organized corporate structures to bear upon their new law firm environment. For example, law firm management structure is simple equity partners for the most part are all equal, and each partner in theory has an equal say in the running of the law firm. This model worked better years ago when law firms were smaller, but in today s larger and often multi cultural (merged) firms, which may span a number of geographies, partners increasingly find that their voices are not heard or perhaps are deemed inconsequential note the number of new boutique firms sprouting up as a result of partner defections from partnerships who elected to merge with another firm. What was once a transparent firm seemed to become more opaque. In contrast, in multinational companies and most financial services providers there generally exists a clear chain of command; decision makers are known, and processes are in place for making decisions which can be more efficient and less political (though certainly not devoid of politics). In multinationals there is always someone to whom one reports and is accountable. This reporting structure can be new to senior lawyers who make a move to in house positions. Although there may have been a Managing Partner or a Head of Asia at their firm, many Asia based partners are at the top of their practice and manage down. These partners and senior lawyers make the strategic decisions about the evolution and direction of their practices. In practical terms, these partners will have not had a boss for a number of years. Therefore, exposure to accountability when working in house creates a different mindset which is more focused on the we rather than on the I or my practice that existed in the law firm. This mindset may produce a greater team orientation and consensus building, which contrasts to the silos of talented and highly successful law firm partners. More importantly, the byproduct of a proper team environment can create a stronger culture. 3
4 There is a smaller point to be noted. The more enlightened multinational companies and financial service providers tend to have more defined career progression, with clear milestones and identifiable resources to reach the next level of progression. They also offer their employees annual performance reviews and hold them to clear and achievable goals. Each position has a job description with defined responsibilities and objectives. Support and professional development programs are in place to assist employees progress to the next step in their career. While career path and organizational structure is for the most part quite clear at law firms, the path a lawyer has to navigate at the firm to move up remains inconsistent and is not readily transparent. As recruiters, we often find ourselves advising associates and even partners on how to get noticed and climb up the rungs at the firm. While associates will move up every year and will receive an annual performance review with a remuneration package that corresponds to it (or not, in the case of lock step US law firms where a bump is essentially guaranteed), the best case scenario for most associates is that they will be taken under the wing of a partner who will act as an advocate for the associate. However, this is highly unusual and unlikely; associates without this good fortune are left to figure it out for themselves. As a group, multinationals tend to be better at training and developing their professional staff, including lawyers, to take the next step in their career. However, at most law firms, associates who have a chance at partnership and who are in the process of trying to develop a book of business will find that it is common for firms not to offer formal or even informal training to help them develop these necessary business development skills. Even most partners, despite their seniority or experience managing teams of lawyers, will receive only the faintest of business development training, and management training will be nearly nonexistent. Firms surely must improve on this front, and that is where a seasoned in house lawyer returning to private practice can have some impact and potentially change the culture. The days of firms operating as a cohesive body of like minded and culturally aligned legal professionals has been over for some time. A law firm is a business and many are beginning to be run like one. Lawyers who have spent a significant period of time in house provide insight into the way other forprofit enterprises run their operations. Their re entry into private practice as a partner or consultant means they can not only educate their firms on ways to implement greater efficiencies brought to bear by someone with experience on the other side of the desk, but they can likely offer suggestions on slight restructuring of the firm itself and how it can or should evolve to stay in step with other business who are much faster to adopt change. On top of all of this, the unique perspective taken from their tenure inhouse might just help these lawyers view themselves as having regained some of the status they may have lost during their in house term; with the upside benefit that their voices will be heard more and their ideas possibly implemented. A promising start following their third step. Katie Lowe is a Consultant in the Hong Kong office of Major, Lindsey & Africa where she works in the Partner Practice Group. She has lived in Asia since Katie specializes in partner level search which includes the establishment of Asian offices for international law firms. She covers the legal markets in Hong Kong, China and Korea. She originally qualified as a Barrister before making the transition into legal search in In her search and recruitment career, Katie has placed partners both in and out of leading US and UK firms in London, Russia and Asia. She has a particular expertise in placing partners with corporate or litigation backgrounds. Katie also has helped a number of international law firms develop new practices in the Asia Pacific region which include litigation, shipping, insurance, and intellectual property. Moreover, she has assisted a number of US firms in establishing their Hong Kong 4
5 law practices. Katie represents law firm partners looking to make lateral moves in the region. Her deep knowledge gained as a member of MLA s global Partner Practice Group gives her insights into the firms based in Asia which locally based recruiters cannot match. This unique access to global law firm leaders coupled with her local market knowledge provides Katie s candidates with unparalleled legal market intelligence. She can be reached at and klowe@mlaglobal.com. 5
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