Law firm vs. in-house counsel: Which is better for legal professionals?
Between 1997 and 2020 the number of in-house lawyers in the United States increased from about 35,000 to more than 115,000. According to experts, the explosion in the number of lawyers working in-house is due to rapid growth in the business sector in the last 30 years. When it comes to legal issues, many of these firms choose to hire in-house lawyers to handle routine matters, while more specialized matters are sent to outside counsel.
In comparison, according to a Legal Evolution report, 146,500 lawyers are working in the country’s top 500 legal firms. This doesn’t mean that there has been a drop in the number of lawyers who are employed within law firms. Whether it is partners, associates, regular attorneys or paralegals, law firms continue to attract a large number of qualifying attorneys every year.
This article will look at the fundamental differences between practicing in-house and in a law firm, and also how you can get into both lines of work. It is important to understand these things because they guide the trajectory of your career.
The difference between working in-house and in a law firm
In-house lawyers
An in-house lawyer is employed as an attorney for a business. Their sole focus is on the business itself and they don’t involve themselves with any other matters.
Many businesses, especially big corporations, have a dedicated legal department. They hire lawyers to deal with all legal matters, including routine issues like employee contracts, pensions and supplier contracts, and other less routine matters like lawsuits.
These lawyers are paid directly by the company and they often sign contracts stipulating that they will not take on any outside legal work (it may be a distraction that keeps them from carrying out their duties within the company).
In-house lawyers are consulted in almost every high-level business discussion so that they can offer input on the company’s legal position and let senior management and the board know if there is any exposure for the firm.
Lawyers in law firms
A law firm attorney, on the other hand, is a legal professional who works within a law firm. The simplest way to describe a law firm is a group of lawyers who come together and create a business that provides legal services.
Law firms are usually made up of partners – who are usually at the top of the hierarchy – and associates and then junior partners and other lower-level lawyers, including paralegals. To rise within a law firm, lawyers have to prove their worth by bringing in business. This means they must do their best to attract well-paying clients and represent their interests so well that they bring in significant income. The more income a lawyer can bring into their firm, the higher they are likely to rise, and the more likely they are to become a partner. Partners usually have some equity in the firm.
Unless you start a law firm immediately after you graduate you are unlikely to become a partner in the next few years. It usually takes hard work, dedication and experience. If you have a JD program online degree you will most likely start as a junior associate and then move on to senior associate. As you become a better lawyer, you will eventually inch closer and closer to a partnership position.
In-house counsel vs. law firm: is one better than the other?
It isn’t possible to categorically state that one is better because they both have their pros and cons. Certain benefits come with working in-house that are absent for lawyers who choose law firms and vice versa. The important thing is to understand the pros and cons of both so that, when the time comes, you can make an informed decision.
The pros of working in a law firm
Once you have graduated with a JD, it will be time to choose which direction to take for your first job so it helps to know what you can expect.
The first thing you should know is that it is extremely competitive to get into the best law firms in America, so be prepared to fight for a position. They only take the best from the top law schools in the country and many firms often limit the number of hires every year. If you are lucky enough to be offered employment at a law firm, there are several benefits you can expect.
You get a consistent volume of work
Most law firms work on many cases at once, and they make sure all their lawyers are busy at all times. You will be consistently occupied, and you may find yourself often working on several cases at the same time. If you prove yourself, you will be allocated more and more work. As you bring more income into the firm you will also be compensated monetarily and with promotions.
You have resources at hand
One of the most challenging things about starting a solo firm is access to resources. Legal work is all about research and, if you don’t have access to the right resources, you will struggle. It can be expensive to give your clients adequate representation. If you work in a law firm, everything you need is provided. You have access to a law library, experts, knowledge bases and everything else you need to make sure you research each case thoroughly.
You get plenty of experience
As you practice within a law firm you will be working with all sorts of clients and that allows you to gain a vast amount of experience. In just a few years you will have enough experience and know-how to open and manage your own law firm.
You have a consistent income
This may vary from firm to firm but, in most legal firms in America, junior associates start with a fixed income and as they rise the ranks it increases, as do their bonuses and perks. If you decide to go solo you will have to find a consistent stream of clients which can be difficult. Many who have opened law firms will tell you that there were months when they didn’t see any significant income.
The cons of working in a law firm
You work long hours
Law firms are extremely competitive and, to maintain an edge, many junior associates find themselves working quite long hours. This leads to a loss of work-life balance when you are still young and it can also cause stress and anxiety.
You may often handle the work no one else wants to do
Most junior associates get the jobs that no one else in the firm is willing to do. They handle research and it can be a tedious job. They are tied to desks all day, they prepare files for the senior members and they are there to assist any time they are needed. If you want to get straight into representing clients, this can be off-putting.
You have to put in billable hours
This means that you have to prove how many hours you worked each week or each month, and the number of hours you register often dictates how much you earn. You may have a base pay level but the more you can bring in through billable hours, the more your take-home pay. As a new lawyer who doesn’t have much experience and who is working in a competitive environment, you may find this challenging.
You will be closely supervised
The dream of every lawyer is to have the freedom to practice law as they see fit. Unfortunately, when you work in a law firm that is not possible because you are constantly supervised by senior lawyers. They track what you do and how you do it, and some may not be open to your ideas.
The pros of working in-house
Finding a job as an in-house counsel may be a little easier than getting employment in a top legal firm and it can also come with certain advantages.
You know what to expect
Since you are handling in-house matters, you will have a good idea of what you are dealing with on a day-to-day basis. There are no surprises, and you are always well-prepared.
You could have a good work/life balance
This is one of the main attractions of this choice of career. Most in-house lawyers work 8-hour days. They come to work in the morning, can afford to take one or two breaks during the day, and they can afford to go home at the end of the day. This makes the career particularly attractive to those who plan to start families or who already have young families.
You enjoy guaranteed pay
Remuneration differs from firm to firm but most in-house lawyers are well compensated and they don’t have to present billable hours. They are usually considered part of senior management and they also get pretty good perks. Big corporations regularly pay their lawyers six figures and they get benefits like paid leave, the use of company resources, and they can make claims on expenses.
However, it is important to note that in-house lawyers often earn less than lawyers in law firms, especially those who are partners or senior associates. The difference is that, in law firms, lawyers have to show billable hours; in-house lawyers are paid their salaries regardless of how much work they do each month.
You may find anything outside your expertise goes to outside counsel
If the company finds itself facing a matter that is outside the expertise of the in-house team, it is likely to bring in outside counsel. The in-house team may then work as back-up or they supervise the lawyers who have been hired. This means that lawyers don’t have to struggle with topics they are not familiar with, which eases their burden of work significantly.
If they were working in a legal firm, for example, they would have to research whatever cases they are assigned whether they are familiar with the subject matter or not. When a company brings in outside counsel it also doesn’t change how much the in-house lawyers are paid. They still get their contractual salary and benefits regardless of any outside assistance they may receive.
You can specialize in your area of interest
If you specialize in environmental law, you can seek employment with the state, the federal government, or private organizations that deal with environmental matters. If you choose health law, you can work within a hospital or any other large medical organization that appeals to you. Those who opt to work in law firms or open a private practice aren’t so lucky. They often have to handle whatever comes their way and, in some cases, they find they have to push their passion aside to handle whatever cases they receive.
You may find it easy to get into a supervisory role
If you’d rather not work in the competitive atmosphere of a law firm, you should consider working in an in-house department after you complete your JD program online. Many times, lawyers who work in big businesses find themselves solely in charge of picking and supervising outside counsel, reviewing their billable hours, reviewing legal strategy as suggested by outside counsel, and liaising about company policies and procedures.
The cons of working in-house
You have just one client
This is both a pro and a con. It is a pro because you become very familiar with the subject, but it is a con because it leaves you susceptible to job loss. If you are fired, you have to start afresh and that can be difficult.
Your work/life balance isn’t always what it seems
Some in-house attorneys are overworked because they deal with multiple departments. They may find themselves responding to dozens of queries a week and, if they don’t have the support of a team, it can be quite tedious.
You may find it curtails opportunities
Whatever career opportunities may arise are usually not available to in-house lawyers because they are locked down by contracts. They may watch their colleagues steadily climb the career ladder while they are stuck in the same position for years. It pays to examine in-house employment contracts closely before you sign; look for terms that favor career development.
You miss out on billable hours
Imagine you work for a large corporation and every week you put in 40 or 50 hours. How much, if you consider the prevailing rates, would you be making if you put in billable hours? This is one of the most common complaints among in-house lawyers. They may be well compensated but they miss out on the opportunity to be paid even more.
You have to answer to others in the corporation
It isn’t always easy to have to explain what you are doing and why, and why you chose a particular strategy. Unfortunately, most in-house lawyers have to report to senior management, the board and other stakeholders. If things go well, they receive accolades but, if they don’t, they have to take the blame and justify their position.
The advantages of choosing a direction at the start of your career
If you are in the process of completing a JD program online or are thinking of enrolling in one, you may have already thought about where you would like to work and why. The online course offered by Cleveland State University equips students with skills that are vital, whether they go on to work in-house or choose to work within law firms. It covers topics like torts, state regulation and legislation, constitutional law and evidence.
By the time students graduate they are familiar with core legal concepts, can do legal research and analysis, are good problem-solvers and have a good idea of ethics and standards within the profession. Students can also specialize in their area of choice and specializations include health, business, corporate compliance, criminal law, and even cybersecurity and space law.
What you choose to specialize in could determine where you eventually work. If you choose to practice criminal law, for example, you are most likely to end up working within a law firm; businesses don’t have much use for criminal lawyers and when they need them, they hire them. However, if you choose health law you can decide to become legal counsel in a hospital, or you can work within a firm that needs health law experts.
As you prepare to join the job market these are important considerations to take into account. If you know what you want to do with your law degree you can choose the right combination of courses to get there, and when you graduate you will not waste time trying to figure out where you’d like to practice. You’ll immediately start applying for jobs that suit your preferences.
Conclusion
A JD program online is an excellent way to go if you plan to practice law. However, it is important to think about how you want to practice your craft after you graduate.
There are pros and cons to being an in-house lawyer and working for a law firm, and you have to weigh them up to see which option makes the most sense for you.
