MYTHS ABOUT IN-HOUSE PRACTICE FLOURISH, BUT THE REALITY OFFERS MANY REWARDS
By Jean M. H. Fergus
New York Law Journal, Monday, March 8, 1993
Many law firm attorneys have fixed ideas that in-house legal work is more routine and less demanding than work in law firms; that in-house attorneys have easier hours; and that job security is inevitably part of the deal. These beliefs, however, are more myth than reality. Lawyers considering in-house positions must understand that in-house practice has changed and that the role of the legal department lawyer has necessarily been transformed.
A revolution is taking place in corporate management that is as fundamental a change in the contemporary work environment as the introduction of mass production was to the industrial revolution at the turn of this century.
Increased global competition, access to new markets, changes in the work force, new alliances abroad, government regulation and technological developments have all contributed to the need for fresh ideas about management and organizational structure. Accordingly, in-house attorneys must master a new vocabulary to communicate with those running modern corporations.
Terms such as total quality management; benchmarking; value chain; value-added; entrepreneurs; linkages; and the latest, boundarylessness, from Jack Welch, chief executive officer of the General Electric Company, are the buzzwords for the 1990's. The Harvard Business Review is as much a part of the in-house lawyer's library as is the Harvard Law Review.
Moreover, in-house departments are being defined differently and in ways that debunk the myths that many lawyers hold about them. The reality is that there is a unique opportunity for attorneys who choose to build their careers in the corporate environment.
No Longer Routine
Myth One: Routine Work. The fact is that in-house work is no longer routine.
In the past, in-house departments were viewed merely as necessary evils, part of the overhead. The development of in-house capability was prompted primarily by cost considerations.
Corporations reasoned, first, that if more work was done in-house, legal expenses would decrease and, second, that the in-house lawyer could function as a manager of legal services, monitoring costs and ensuring lower bills.
But legal services now have entered the value chain as part of the company's overall activity. In 1984, Ronald Gilson advanced the controversial idea that lawyers should be viewed as "transaction cost engineers," that is, that their work should be viewed as contributing to the final product or service in the same way that the work of other professionals in the business is viewed.
The growing complexity of domestic and international business helped end the old debate as to whether or not in-house lawyers added value. Corporations began to recognize the importance of having a lawyer close at hand. Companies also recognized that a competitive advantage can be gained by integrating legal services with business activity to achieve business objectives.
Moreover, when the major law firms downsized, corporations were able to hire the top legal talent made available. Thus, corporations could bring in-house matters that had traditionally been handled by outside firms.
As the quality of in-house lawyers continues to improve, legal departments will become better able to attract and handle most of their corporations' business. As these departments become more knowledgeable, it will not be uncommon for in-house lawyers to be the lead attorneys on matters, looking only to outside counsel for the complementary services that the departments cannot provide.
In addition, technology has contributed to the ability of in-house lawyers to handle complex legal work. Law departments have made tremendous investments in sophisticated technology, eliminating the edge that outside law firms once had in this area. The in-house attorneys now can process and generate information and documentation on a par with the outside lawyers.
Myth Two: Easier Hours. The reality is that everyone in business is working harder in the 1990's. In-house attorneys are no exception.
Management's contemporary theme emphasizes that individual contribution is the key to success. Every person counts. The imagined lure of in-house positions as the path to major lifestyle change is readily negated by management's 1990's focus.
G.E., for example, adopted a program called "Work-Out." One business-school guru called this program "one of the biggest planned efforts to alter people's behavior since Mao's Cultural Revolution."
In essence, the program implemented the company's corporate operating objective by intellectually and emotionally involving every employee in its mission. The cornerstone of this and similar programs is to build employee trust and encourage workers at all levels to take on more responsibility. By mid-1992, nearly two-thirds of employees, numbering 200,000 individuals, had participated in the program.
The relegation of in-house attorneys to routine assignments and a role as a conduit is inconsistent with these values, as is the idea of a more relaxed schedule. But compared with the schedule in many major law firms, corporate life, even in these more demanding times, is not more time consuming.
The corporate world, however, has eliminated layers of middle management, resulting in productivity levels at an all-time high. In 1987, two years before this restructuring reached full tilt, The Wall Street Journal reported that 88 percent of top executives surveyed worked 10 or more hours a day and 18 percent worked 12 hours or more. And the work did not stop on the weekend. Ninety-four percent worked at least one hour every weekend, 33 percent worked six or more hours. Vacation time was also down from 16 to 14 days a year.
Myth Three: Job Security. Although corporations are not built on the up-or-out model of most major law firms, they are not lifetime employers. The concept of job security has been redefined, with corporations no longer guaranteeing employment, only employability. The idea is that the skills learned during employment will be transferable to other employers in the general marketplace.
In the terms of today's management, job security comes from the real value that the lawyer brings to the corporation in helping it meet its objectives. With the growing complexity of in-house legal work, in-house lawyers will develop sharper skills that meet a marketplace demand.
Myth Meets Reality. As a frontline player in the new corporate paradigm, the in-house lawyer has the opportunity to be a key part of the revolution in corporate management. The enlightened lawyer can add real value to his or her client's business while maintaining and improving professional skills. Although the hard reality is that these opportunities will demand a significant time commitment, in the end the legal work will be more challenging and satisfying.