Moving in-house – what are the challenges for managing partners?
Law firm managing partners who have become general counsel say the transition is more challenging than it may appear.
August 14, 2018 at 07:00 AM
9 minute read
The original version of this story was published on Corporate Counsel
Leading a law firm is hard work – long hours, office politics, plus the challenge of keeping both clients and fellow partners happy. For those top firm lawyers tiring of the grind and looking for a second wind in their legal careers, could becoming a general counsel be a good next step?
It's a transition that a handful of high-profile lawyers have made in recent years, bringing their experience with how outside counsel operate to organisations that prove much more budget-focused and hierarchical than the partnerships they left.
Among those making the move, Gregory Jordan left Reed Smith to lead legal at PNC Bank, Marianne Short went from managing partner at Dorsey & Whitney to UnitedHealth, Susan Levy left Jenner & Block for Northern Trust Corp, and C. Allen Parker went from Cravath, Swaine & Moore to Wells Fargo.
Though the number of managing partners turned GCs might not add up to a major hiring trend, a lot can be learned from their experiences.
For those individuals, time spent as managing partner can lead to some significant advantages once they cross into the legal department, even though in-house life differs in some very real ways.
Why it makes sense
Rohan Weerasinghe is the general counsel of Citigroup, where he oversees a department of more than 1,000 members spread across more than 100 offices around the world. It's not too far off the 900 lawyers in 20 offices he oversaw during his time as senior partner with Shearman & Sterling.
Weerasinghe became the bank's top lawyer in 2012, even though, like many others interviewed for this article, he didn't have any previous in-house experience. He had been a senior partner at Shearman for seven years and spent more than 30 years total with the firm. He made the leap in-house by happenstance, after a contact from Morgan Stanley reached out.
Weerasinghe says that, while it's hard to give advice on such a career move, "if you have experience managing people and you're interested in learning new things, it's a leg up".
Thomas VanKirk is now legal chief at Highmark Health but was formerly with Buchanan Ingersoll & Rooney as its COO and later CEO.
He says his decades of management experience at Buchanan were unquestionably beneficial, as they prepared him to move to a GC job more effectively than a regular law firm partnership would have. Being involved with the business of a law firm, "you understand those business aspects [of practice]", which he says "helps you in your corporate role".
Plus, in his time as a corporate litigator, he says he had "another advantage not everyone would have", which was the exposure to top executives and boards of directors – with whom he now regularly interacts as the general counsel when spending time on corporate governance matters.
Jordan, of PNC Bank, thinks the transition would work well for a lawyer in his or her second act. In his case, he found it appealing to take a position that includes a seat at the executive table.
While the managing partner role is "a great job", Jordan makes it clear that "it's definitely a 24/7/365-type of thing".
"You can't do a job like that forever," Jordan says, because it "can become stale, and that isn't fair to you or the firm".
Jordan had been managing partner with Reed Smith for 13 years and wasn't necessarily looking to go in-house, but he felt the managing partner position couldn't last forever for him personally.
"Ten years is a long time to be managing partner," he says. "Twenty years would be an incredibly long time."
A new role
Despite some similarities, including the importance of business chops, most lawyers say the roles of managing partner and GC are fairly different.
For starters, unlike the managing partner, the general counsel isn't the top boss, as the lawyers learned upon making the transition. "After running a law firm, you have to get used to not being the captain," Jordan says. "You're not the captain, the CEO is."
The lawyers agree that the managing partner role requires a lot of time dedicated to building consensus among partners. VanKirk says the managing partner role is a lot of "massaging egos", and he's glad not to have to worry about that in his current business setting.
While it appears more common for a general counsel to be selected after having managed the entire law firm function, even having a background with a regional office can add useful skills. About 25 years ago, Michael Roster made the jump from managing partner in Morrison & Foerster's Los Angeles office to leading the legal department at Stanford University.
At the time, he knew of only one other lawyer who had shifted from managing partner to general counsel – Ben Heineman, the former general counsel of GE.
"It was much more rare back then," Roster says. "It's becoming more widespread." Still, VanKirk says the move is uncommon enough that it's tough to think of more than a handful of lawyers who have made it.
One of the biggest changes in mindset for Roster, who later went on to lead the legal function for Golden West Financial Corp, was related to budgeting and headcount. At a law firm, the managing partner's budget for rent and salaries is important, he says, but that role also focuses on increasing headcount when the firm wants to grow a certain practice. With companies, he says, "budgets aren't guidelines", adding: "You have to meet that budget. There's much more pressure. If they tell you to bring a cost down, you sure better bring that cost down." At a corporation, "it is very unpopular to have your headcount increase without real justification", Roster says.
Inside-out relationships
Walking into the office one day as a general counsel instead of managing partner can be a strange experience, especially when it comes to working with outside counsel. Roster says every one of his in-house colleagues with law firm experience has inevitably come to him after six months or so with a realisation about their relationship with vendors, as he calls them.
"'Mike, they're not very good,'" the lawyers have all told him about outside counsel. "'I get stuff that's irrelevant. They don't seem to even focus on what's correct. I'm correcting their work all the time, and they're billing me for correcting their stupid mistakes.'"
Knowing the lawyers' jobs inside and out means that the general counsel knows exactly what they're doing wrong. It also means that the general counsel is in a unique position to get exactly what their company needs and not pay for anything else.
"You understand those bills. You quickly see who's using a heavy pencil, which partners are staffing with huge numbers of people and who's doing it largely on their own," Roster says. "You start comparing that with the quality of work you're getting and very quickly you start making decisions."
That level of confidence can lead a general counsel's company to become one of a law firm's favoured clients once the right law firms are selected, he says, and the benefits will come rushing in. A general counsel who can go straight to a firm's chairman – because he or she is comfortable dealing with chairmen after years as a managing partner – has a distinct advantage.
"You can do away with a lot of things and get down to brass tacks," VanKirk says. And being able to cut through the noise that sometimes exists in the firm-client relationship tends to be in the best interests of both sides, it turns out.
"I find that outside counsel, in approaching me, generally have a great deal of respect for the fact that I do know the way they operate," VanKirk says.
A new trend?
Recruiters in the legal profession seem unconvinced that the shift from managing partner to general counsel is a trend that has taken off dramatically or will in the future, but they don't deny the skillsets can match up well for the right candidates.
In Deborah Ben-Canaan's experience with the in-house practice group at Major, Lindsey & Africa, "law firm partners often want to go in-house, but it's a challenge because they are less likely to have the practical business experience, leadership and management skills or experience with a board and c-suite environment that companies are looking for in a general counsel".
She adds: "Managing partners have a much easier time because they are familiar with strategic planning, hiring and firing, and budgetary responsibility. In some cases, companies specifically seek out law firm candidates, although it is rare. We don't see a major trend in managing partners moving to the GC role, but a managing partner is a much easier sell than a law firm partner who lacks management experience."
Citibank's Weerasinghe says he is very content with the decision he made six years ago to go in-house, but it may not be for everyone. He considers this type of move to be best suited for someone "with an interest in doing something different".
"If you get the right opportunity with the right company that fits what your interest is," he says, "you may find you want to have a different challenge".
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