Inside and Out

To a casual observer, the role of in-house counsel and outside counsel may seem identical. Both provide legal advice to an entity, one on an ad hoc basis, while the other is employed full-time. This perspective, however, misses the very real qualitative differences in the roles. Lawyers often don’t appreciate that inside counsel approach problems in a fundamentally different way than outside counsel. This disconnect is, in my opinion, one of the primary causes of dissatisfaction with outside counsel.

Cost vs. revenue- In a firm, the lawyers are the revenue generators; their value add, whether measured in billed hours or clients retained, is the raison d’être for their entire enterprise and the infrastructure of their business is built to support their efforts to achieve this value. Inside law departments, however, are cost centers, and don’t usually have the same support systems. As such, in-house counsel must approach their role with a mindset that puts a premium on economy, efficiency and ingenuity. Yes, I know that inside counsel can generate all sorts of metrics to impute dollar values and returns on investment and that they often do drive revenue (as least in a supporting role); but the simple fact is law departments must continually justify their value rather than having it taken for granted. Personally, I view this burden as a blessing because it forces law departments to be more creative in developing service delivery models.

Proactive vs. reactive- Outside counsel typically is made aware of an issue only after it has ripened enough for the client to believe it merits legal attention. In many cases, the issue will be over-ripe or even rotted. The best part of working as inside counsel is that the deep intimacy with the business allows us to see around corners and to head off issues before they become big problems. It is imperative that inside counsel cultivate this proactive mindset, otherwise the corporation might as well save the salary costs and simply engage outside counsel on an as needed basis.

Deciding vs. opining- While outside counsel can make handsome livings offering opinions, inside counsel must translate those opinions into decisions. While opinions can be nuanced and multifaceted, decisions are usually rather binary. To the extent that outside counsel can assist with the deciding process, as opposed to the informing/opining process, their value to in-house counsel will grow immeasurably.

Generalists vs. specialists- The old saw has it that a generalist knows less and less about more and more until they eventually know nothing, while the specialist knows more and more about less and less until they eventually know nothing. In-house lawyers tend to be on the generalist side of that equation, so must be highly attuned to when they should reach out to the specialists.

I’d be curious to know if any readers see other distinctions between private practice and in-house law.