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Some see benefit of leaving law firms for corporate jobs

By DOUGLAS S. MALAN

The number 8.66 hung over attorney Anthony Kornacki’s head in oppressive fashion, dictating how he spent each day and with whom. It was the average number of daily billable hours he needed to log in order to meet his law firm’s annual requirement of 2,100.

Newly married in August 2007, Kornacki often missed out on dinner with his wife. He packed his PDA on vacation to keep in touch with the office because any amount of time he spent not billing had to be made up when he returned. And after he left the office at 7 p.m. most nights, there often were bar association and chamber of commerce functions to attend to generate business leads. The thought of starting a family and then missing out on time with his kids while at the law firm was too much to consider.

So when he was one of 26 associates laid off firmwide by Thelen this past March, Kornacki, who worked in the Hartford office, considered how his professional and personal goals could be more in synch. He decided going in-house for XL Insurance in Hartford was the best career move.

“It’s all of those stressors that factored into the equation to go in-house,” said Kornacki, 33, who is claims counsel for XL and defends private companies in employment disputes around the country. He is part of a legal team of 25 attorneys that manages litigation.

Increasingly, going corporate seems to be a rite of passage for frustrated associates who have spent five or more years at a law firm. When economic times are good, maybe the law firm stress is worth the paycheck. But perspectives change when law firms get battered by Wall Street. And seeing law firms that were once worth hundreds of millions of dollars going up in flames in a matter of months—such as Thelen—can cause lawyers to seriously consider their options.

“In a down economy, when you start to see large-scale layoffs and offices closing their doors, you start to think that maybe my position isn’t as secure as I thought it was,” Kornacki said.

“I am absolutely” hearing of other lawyers considering a move in-house, he added. Most of them are associates with five to eight years of law firm life under their belt. “They’re very inquisitive about working in-house and how I found the position, and they’re very interested in positions like mine that are out there.”

Serious Considerations

But as many recruiters and some in-house attorneys say, the decision to leave a firm for corporate position is no slam dunk. Economic pressures can be even more acute in businesses than in diversified law firms, and when companies look to make cuts, often the in-house lawyers are at the top of the list because they’re overhead costs rather than revenue-generating positions.

“[In-house] lawyers are not considered critical to a company. They’re a luxury,” said Stewart Michaels of Topaz Attorney Search in New Jersey. “It really is false hope that attorneys have that [going in-house] is the panacea for them. Law firms may have problems but they’re a lot more stable than corporations.”

Then there’s the salary discrepancy.

Vanessa Vidal, who is president of Atlanta-based ESQ Recruiting with offices in New York, said that lawyers transitioning from large national and international law firms can expect salary reductions of 50 to 70 percent. She noted that median base salaries for in-house lawyers with at least five years’ experience is between $100,000 and $150,000.

This is often a shock to lawyers who were at firms that paid $160,000 to first-year associates, York noted on her blog. Several years of escalating rookie salaries “have done little to provide law firm attorneys with a realistic understanding of their worth in the corporate legal market.”

James Kaiser, of Kaiser Whitney Staffing in New Haven, said he isn’t yet noticing increased movement by attorneys from law firms to companies but believes it’s “likely” that such switches will occur in 2009 as financial struggles intensify at law firms.

The attorneys who come to Kaiser often are “bored of doing the same thing and generating revenue for the firm,” and they would rather put their skills to use for a company. His clients include “people wanting to get away from the firm culture,” he said. “It can be an associate who is delayed on the partner track and doesn’t want to subscribe to the [law firm] politics anymore.”

Attorney Greg Holness desired a legal role in which he could get more involved with the business end of a company and affect the company’s direction.

Earlier this year, he joined the Permasteelisa Group as general counsel at its global headquarters in Windsor after leaving Thelen. His new position with the engineering and architectural firm provides exposure to a breadth of areas of the law, including employment, commercial and banking.

“I was looking to join a good company,” Holness said. “It was really not a long-term plan [to go in-house] as much as it was a matter of serendipity. Actually, it’s the only job that I applied for. It’s nice to step out [of law firm life] and get a change of pace.”

Belt-Tightening

One of the main attractions of in-house life is the predictability of hours and compensation, but that usually doesn’t equate to a cushy position.

“I actually work more,” Holness said, with 11- and 12-hour days being the norm. But he has no qualms about the hours relative to his compensation.

Kornacki is logging about 10 hours a day, but he knows his days will end at 6 p.m. followed by dinner with his wife. There are no billable hour pressures or requirements to glad-hand at a social function.

“I know a lot of attorneys who don’t [go home for dinner] or can’t do that or they come home for dinner and then have to go back to work for two hours to reach their billable hours for the day,” Kornacki said. “I love the practice of law, but I just didn’t enjoy the business of it. I think many others are in the same boat.”

That common thread ran through this year’s associate survey conducted by American Lawyer, sister publication of the Law Tribune. Increasingly, associates are disenchanted with the intense demands on business-building that are required to become and remain equity partner at many law firms.

“Partnership is no longer the lifetime guarantee that maybe it once was,” one Dechert associate told the magazine on an anonymous basis.

And given the right situation, attorneys certainly can find happiness in-house, according to numerous blogs and chat rooms discussing the matter. Kornacki agrees, and notes that the right in-house opportunity can provide assurances that a law firm can’t.

“In this climate, that steady income becomes more important to people,” he said.

Kenneth Bunge, a former in-house attorney with United Technologies Corp. and current president of the Connecticut chapter of the Association for Corporate Counsel, said this might not be the best time, in general, to consider going in-house because of companies’ budget concerns. He hasn’t heard of much hiring activity from his membership.

“The problem I see with 2009 is that law departments and companies are going to go through some pretty tough belt-tightening for the first time in 10 years,” he said. “It won’t be too uncommon to see hiring freezes.”

But Kornacki says lawyers burned out on law firm life should consider moving in-house if they can find an opportunity. “I can’t imagine going back” to a law firm, he said. “I’m singing the praises of in-house to everyone I see.”•