It's not all about the money. And it's not about work-life balance either. The true reason behind several senior in-house lawyers' recent return to private practice lies in nothing less fundamental than the maturing of the Chinese economy itself. ALB China's Zhang Yun explains
When Mao Rong, former director of legal affairs for Asia-Pacific at Eastman Kodak, decided to take on an of counsel role with Reed Smith's Beijing office last year following her decade-long in-house stint, many of her lawyer friends asked her why she would want to give up a relatively comfortable position with set working hours and switch to a law firm environment with more work, more hours and more pressure. Mao's response was simple and clear - returning to private practice meant more opportunities to work on exciting and challenging transactions, where her passion truly lies.
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Senior in-house counsels who have made the move to private practice recently
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Mao joined Kodak in 1998 as the second in-house counsel of the company in Greater China. Prior to that, Mao had spent ten years practising in a number of US law firms. Initially, she and her team were busy with establishment and operation of almost 20 joint ventures and foreign invested enterprises (FIEs), but as the company became well established, the pace of new investment and M&A naturally slowed. That's when Mao started contemplating new career progression options.
Several partners who have recently left their in-house roles at multinationals tell another story - when in-house legal work becomes routine and less intellectually challenging, job satisfaction emerges as a major concern.
"After decades of fast expansion, many MNCs have now entered into a stable stage, and the legal work handled by their in-house teams is mainly regarding risk management, and day-to-day and operational issues. So when boredom sets in, people are likely to see themselves as just a cog in a machine and decide to seek greater job satisfaction and personal fulfilment in law firms," said a partner of a top-tier Beijing firm who previously served as the China GC for a Fortune Global 500 company.
He pointed out that the key rationale for his return to private practice was the opportunity to build and manage his own practice and business - and get a better sense of ownership and achievement.
"During the global downturn, some MNCs had adopted cost-cutting measures, including lay-offs. Although their legal teams were less directly affected compared to other departments, the decreased morale, policy changes and regular management reshuffles have created a more difficult environment for in-house legal functions. Therefore, a number of GCs have been attracted to join private law firms, which are, in contrast, growing with strong momentum and offering more diverse and interesting projects," he added.
Relearning and transitioning
With 10 years of private practice experience before her in-house career, it only took Mao a short period of time to fully adapt to the demanding law firm environment again. But she sees the transitioning process as a tough task for most in-house lawyers, particularly those without any private-practice background. "It's more difficult for an in-house lawyer to make the transition to private practice than vice versa. In-house counsels are usually generalist and they only need to work for one client. Making the transition to develop business, dish out the work, service a wide range of clients across different industries and advise on different areas of law appears to be challenging," said Mao.
However, she noted that even though developing technical and business skills posts certain challenges, the in-house experience is advantageous when it comes to marketing and understanding clients' needs.
In addition, the experience of selecting and working with external counsels also gives lawyers a good grasp of what quality of services clients are generally seeking from external counsels.
Prior to joining Han Kun as partner in August 2010, Stanley Guo worked at Huawei Technologies for 14 years, and most recently served as the global director of the telecom giant's corporate legal affairs department. During his time in Huawei, Guo built up the company's internal legal management system and compliance procedures, and led a team of more than 160 in-house lawyers (60% are foreign lawyers) as well as coordinated more than 100 law firms in China and overseas. He and his team were also involved in hundreds of investments and projects globally.
"I see in-house experience as a competitive advantage for private-practice lawyers because it gives them an insightful understanding of clients' way of thinking and main concerns. Therefore, they are able to approach the problems with a more solution and commercial-driven mindset," he said. "At the moment, that remains a weak point of most domestic lawyers."
Indeed, the legal industry has started to recognise the benefits of having a normal level of personnel movement between the two sectors.
"There's a free two-way flow of lawyers between private practices and in-house departments in developed countries. A healthy flow can help spread valuable knowledge and experience across the entire legal profession and enable efficient exchange of perspectives and opinions between law firms and corporations," said Guo. "China's legal market needs such a flow to further improve and advance." ALB
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Senior (≥6 yrs)
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Middle (3-5 yrs)
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Junior (<3)
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Large global firms (with foreign bar)
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1,186,970
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760,130
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651,890
|
|
Smaller foreign firms
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635,540
|
314,390
|
133,600
|
|
Upper market domestic firms
|
385,660
|
204,550
|
119,030
|
|
In-house counsel – MNCs
|
872,680
|
251,170
|
121,310
|
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In-house counsel – PRC enterprises
|
477,430
|
202,320
|
122,430
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