In-house Counsel Layoff Protection

If you are about to be downsized from your corporate legal department, all traditional bets are off. The in-house market is grim, as the latest Altman Weil survey data suggests that almost one-third of legal departments will shed headcount in 2009. Finding an acceptable lateral in-house position may be impossible this year.

While moving to a law firm may not be your first (or second, or third) choice, I encourage you to focus on this option immediately. The challenge, of course, is that law firms are not exactly in hiring mode either. If you only offer your talents and experience, then landing softly at a firm may be even harder than finding an in-house job.

Law firms will do almost anything for new revenue streams, however. So, here are your objectives: 1. Turn your current and soon to be former employer into a client. 2. Draft a business plan outlining action steps for turning your network of in-house contacts into clients.

Before I elaborate on this advice, I wish to give credit where credit is due. Fellow recruiter Frank Michael D'Amore of Attorney Career Catalysts offered the intriguing idea of trading severance for work.

Most companies provide reasonable to generous severance packages to in-house attorneys, especially at senior levels. Six months of salary plus expensive--and in my opinion completely worthless--outplacement service is not unusual. It's a costly write-off for the company. Offer your company a win-win alternative. Tell your employer it may keep the six figures in severance costs, if it will promise a threshold level of outside counsel work for 12 months to a law firm that you will be joining. By taking this narrow "book of business" to a firm, along with a plan for developing more business, you can negotiate a reasonable one-year contract with the law firm, perhaps two. Hopefully this will be enough time to either build additional business and stick with the firm or to ride out this macro-economic storm and return to an in-house role. Your employer saves money on severance and puts it towards outside counsel services that it would buy anyway.

Conceptually, it's a phenomenal idea. But it won't be an easy sell.

To get a sense of how receptive companies and law firms might be--or not be--to the severance for work trade-off, I approached my new friends at Legal OnRamp for feedback. Legal OnRamp has quickly become a fabulous venue for thought leadership. With an invitation-only membership weighted heavily towards in-house counsel, Legal OnRamp offers extraordinary web 2.0 opportunities for sharing best practices, collaboration and referrals.

General counsel on Legal OnRamp noted that the quasi-business role of inside counsel may not readily transfer to becoming the outside advisor or worker bee. Put differently, your boss may struggle on the question of what work to send with you. GCs were most comfortable with the prospect of sending additional assignments to an existing law firm provider that "takes in" one of their downsized attorneys. They want to help their attorney(s) make a soft landing into a new position. I think more importantly, GCs acknowledged the logic of the severance-for-work trade off. Still, the concept of guaranteeing new work makes them uncomfortable. My translation: You will really have to push hard to reach an understanding that you can take to a law firm.

To complicate this arrangement, your narrow book of business will be most attractive to a firm that is not already doing business with your company. Current outside counsel will view the arrangement as an imposition or favor in exchange for work they were likely (as they see it) to get anyway. The law firm may push back and say no.

How will a new law firm provider view your candidacy? I spoke with partners in charge of vetting lateral candidates at several law firms of various sizes, and all viewed this proposition with an expected amount of cynicism. Would the new lawyer really fit into our firm culturally and be happy here? Would the book really be large enough for a potentially short-term deal to make sense? And one contact of mine was willing to express an old school bias--that the lawyer "probably won't be very good."

Nonetheless, every partner admitted that he or she would seriously look at any candidate who promised to bring a meaningful new client in tow. According to one, "the real win would come if we can turn the relationship into something more meaningful, where the company also starts using some of our other attorneys. We would be willing to consider the laid off counsel with business in hand as a starting point."

So yes, while there are several hurdles to jump, the endgame is viable. The first obstacle is your own willingness to forego a severance package. On this first step, discuss the job market with any of your attorney friends who have been looking for work. Step two is finding a law firm that makes sense for your soon-to-be-former company, in terms of rates, capabilities and culture. It's best if you identify a firm where you have an influential friend who can get you in front of the managing partner quickly for a serious conversation. Everything needs to come together quickly. Once you believe you have a likely home for your new book of business, it's time for step three.

Step three is the conversation with your GC and anyone else who must sign off on this non-traditional approach to the employment separation. Be prepared, as this meeting will require both a compelling business argument and all of your personal powers of persuasion. You are going to ask your company to send at least $500,000 worth of outside counsel work with you to a law firm that is new to the company, plus a soft promise of more work if the company is happy with the new firm. In exchange, the company saves well over $100,000 on severance and outplacement costs. It gets a terrific lawyer who understands the business--you. And it is money the company would be spending on outside counsel anyway. Will it be difficult or uncomfortable for your boss to take that work away from a current provider? Sure.

But consider, whenever a GC has to lay off an attorney who is valued and respected, he or she will inevitably say, "If there is anything I can do to ease the blow, please let me know." Now you will have something meaningful to request if that conversation occurs.

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