Difference between an in House and Private Practice Lawyer

The main difference between an in-house lawyer (IHL) and a private practice lawyer (PPL) is that the former works as a paid employee within a business, and the latter has a multitude of both business and personal clients whom it charges for providing legal advice.

In-house Law

An IHL generally has one client, but will sometimes advise a number of businesses in the same group. The main advantage is that an IHL will generally have the time and incentive to get to know the internal workings of the client – both in terms of the business it carries on, and the people that make the decisions. Understanding what drives a company, its products and the risks it is willing to take allows the IHL to provide more targeted and relevant commercial advice.

Ideally, an IHL will have thick skin and good commercial acumen. Their primary role is as guardians of risk in the business. The managers and directors of a commercial concern need to be advised on the risks in taking a desired course of action. The legal advisors role is to enumerate those risks clearly and concisely, so that those directing the business can make an informed decision on the appropriate path to take.

Unless an IHL works for a large legal department, they tend to work as generalists who have one or two areas of expertise. Given that many areas of law are constantly changing, an IHL will usually instruct an external firm of PPL’s on more complex or specialist matters. In addition, IHL’s usually have smaller budgets and fewer resources at their disposal for legal materials, which means any detailed research on the finer points of law usually needs outside input.

However, an IHL is much more than a postbox for external advice. A key role is to manage external legal suppliers, agree rates for their work, and “dumb down” technical legal advice for dissemination to internal clients. The IHL also has a role in refining any instructions to external clients to ensure that queries are targeted and relevant to the matter at hand.

Working hours for an IHL are broadly the same in comparison to their PPL counterparts, but working conditions tend to be more flexible. However, the flexibility comes at a price, as PPL lawyers tend to earn more and have a more structured career path. That said, IHL’s do receive tangible benefits that may not be available to PPL’s, such as company shares and company cars and intangible ones, such as more time to spend with family and a wide variety of interesting work.

Private Practice Law

A PPL generally works for a law firm (some jurisdictions, such as the UK, Canada and Commonwealth countries have a separate, barrister profession) and normally charges (on an hourly basis) for researching, writing and delivering advice or acting on behalf of clients in negotiations, disputes and/or court proceedings. Working in a law firm is much more structured, with a clear career path from trainee (or junior assistant) to partner, with a number of levels of partnership within the partnership structure.

The PPL will be responsible for bringing in and advising a large number of clients and will be set an annual billing and marketing target as part of their formal objectives. As such, filling in time sheets (which account for every six minutes of activity in the working day) and billing clients are integral to their daily activity. Most larger firms have sophisticated IT systems for document retention and retrieval and time management to assist in these day to day tasks, as well as dedicated printing and secretarial services. IHL’s rarely get this kind of support internally. A junior PPL’s primary responsibility will be to generate fees for the firm’s partners, a driver that can unfortunately cause conflict if this is not strictly in the client’s interest.

The structure of law firms allows PPL’s to develop expertise in specific niche areas of law,  and ultimately, become recognised leaders in such areas and developing a client following. PPL’s are generally encouraged to publish on such topics, in both trade journals and books, to raise their own personal profile and that of the firm. Large law firms now have dedicated professional Support Lawyers (PSL’s) who do not have a fee-earning client-facing role, but rather concentrate on developing the firm’s know-how, organising seminars and delivering training to external clients.

It is common for many IHL’s to start out in private practice law, both as a means of developing the know-how and skill-set needed to be able to operate independently, and because law firms provide much-needed structure early on in a legal career. It is not uncommon for a PPL to move in-house with the firm’s blessing, as if done right, it strengthens the client relationship.

Both roles have their advantages and disadvantages. In summary, the IHL tends to work for a single client (as an employee), is more commercially focussed with an intimate knowledge of the business he or she works in, and acts as a generalist with a good working knowledge of many areas of law. In contrast, the PPL has many clients, is more focussed on the delivery of specific legal advice, and specialises in specific areas of law.