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featuredbyGuest

Part 1 is here - https://www.legallyindia.com/convos/topic/394522-whats-wrong-with-law-firms-and-is-in-house-better-part-1#comment-394522

Part 1 dealt with the issue of what is wrong with law firms. TLDR; what makes law firms problematic is that they do little to address some very fundamental things that make a workplace sustainable – certainty and visibility of workflows, better client expectation management and real and effective rest and recovery programs. These are real systemic problems.

So is in-house better? In-house roles too have real systemic problems. The first and possibility the most important one is the compensation disparity. In house roles generally don't pay as much as your plain old law firm job. Certainly not at junior to mid levels; & while senior roles at good companies you get you hefty sums, it may never match up to compensation level of some law firm partners.

Lawyers are also used to a very straight forward compensation structure. Month on month, your in-hand salary = Fixed- 10% TDS. But in-house even in a small startup doesn't work like that (if you are an employee & not a contractor). You will see something called the CTC in your offer letter (which could be a huge on-paper number). But a good rule of thumb is to deduct ~25-32% to calculate your monthly in-hand salary. Some might experience shock at the amount of tax they are paying upfront along with all the other deductions.

Some companies also offer ESOPs. ESOPs are tricky. There is a tax incidence when they vest & when you sell them. For the former, your company will most likely deduct some ESOPs from your monthly vesting - which means each month, you might receive a lower than expected share of ESOPs. Share value can fluctuate & you can't just keep holding on to ESOPs in perpetuity. Beyond a certain value, you will have to liquidate out of commercial prudence (particularly if they are foreign stocks). The other problem is that in new and upcoming start-ups ESOPs could basically be worthless or too cumbersome to liquidate. Their issuance process could be defective & any grants effectively unenforceable. All this is difficult to verify when you join.

So compensation is a real pain-point in in-house roles. There are perks for sure. Generous health insurance, fitness and wellness programs, cabs in IT companies, and subsidized food is not uncommon. But different people perceive value differently - so for some this overall value proposition may be less attractive.

Then there is the question of stakeholder relationships. In law firms, lawyers are often coached to be subservient to the client. Subservience with a little bit of tact and risk management will get you far in a law firm. In in-house roles - you simply can't operate that way. There are times when you have no choice but to stand firm and disagree to save your job. Sometimes you have to communicate subtly to make stakeholders understand the risks in terms they understand. Relationship management is way more complex and constant in in-house roles. When and how to 'escalate' becomes as important a skill as any of your legal skills. Not everyone might be good at this and this can become as a source of much stress. But this relationship building can really ground you, help you understand the pulse of the business (the actual one, not the one that law firm lawyers proclaim to know) & make you feel involved in a project or business in way that as an external counsel, you can rarely feel. It can lead to high level of satisfaction.

The way lawyers are perceived also varies from company to company. The common view of lawyers being a 'cost center' is often held but usually only by those stakeholders who don't have much experience of a legal issue gone bad. Mature companies (including many startups) these days seem to understand the value that lawyers bring to the table. Sure you may not be as important to the business as a techie or a sales person - but many in-house lawyers are able to become trusted business advisors in the true sense. Pro-tip: It is helpful to start out in an established in-house legal department to learn the ropes - since your legal skills become somewhat secondary in your day-to-day job.

And yes. Work does get monotonous and concentrated in a few buckets. But while you might not achieve much in subject breadth - you will certainly go deep in the sector your company operates (including non-legal stuff) , assuming you are interested in the business, your company is doing well and growing and has a good business team. The flip side is that as a law firm lawyer -you run the risk of doing shallow work most of the time - particularly, if you do advisory work, where you actually rarely get to see the business implementation of your advise. As a law firm lawyer, you might have better luck of doing deeper and impactful work in high-stakes litigation or investment transactions - but these come with the associated high personal cost - which made you hate law firms in the first place. It's pretty much a Hobson's choice.

And yes, in-house work can be as hectic as that in a law firm. Be sure to vet your company's culture before you join. In some cases, there could be lesser flexibility in in-house roles. Job security is also less certain than in law firms - where large scale layoffs not linked to performance issues, for all means and purposes don't happen. Yet.

So which is better? The anti-climatic answer is that it depends on you and your personal experience. My two cents, understand the pitfalls and benefits of working in either, but don't seek simple answers for complicated questions like this. It is your life we are talking about after all. If your starting point in your career is at a law firm & you feel disillusioned or doubtful, try out the other side of the grass. Maybe switch several times (if you are not satisfied). Only then will you subjectively see which side looks greener to you. And never forget: "What are your choices when someone holds a gun to your head? You do what they say or they shoot you, right? Wrong! You take the gun or pull out a bigger gun or you call a bluff or you do any of the other 146 other things”"