MORE LEGAL EAGLES LANDING IN-HOUSE JOBS ON WALL ST.: EQUAL PAY, BETTER LIFE LURE BIG-FIRM STAFFERS

It wasn’t too long ago that Goldman Sachs Group had fewer than a dozen lawyers in its legal department. But after a hiring spree, the Wall Street investment firm now has 75 in-house lawyers and is still hiring aggressively.

Throughout Wall Street, securities firms are rapidly bulking up their law departments. Merrill Lynch & Co. Inc. and Morgan Stanley Dean Witter Co., for instance, boast more than 200 in-house lawyers each, making their corporate legal departments among the largest in the country.

The lawyers are being tapped to work on increasingly sophisticated regulatory matters and complex financial transactions. They are being used to litigate arbitration disputes with customers, to work with derivatives and commodities traders, and to deal with general compliance and regulatory issues.

To staff their in-house departments, brokerage houses and money managers are raiding some of the city’s biggest law firms for young attorneys. These lawyers are making the switch because the pay is just as good on Wall Street and the lifestyle is better.

“Historically, there was a great gap in pay, but that’s no longer true,” says Alisa Levin, a principal in legal recruiter Greene Levin Snyder. “To get high-caliber people, you have to pay for them. The financial institutions are building tonier law departments.”

While there’s nothing new about corporate attorneys abandoning the profession to become investment bankers, until recently few lawyers envisioned life as a counsel on Wall Street as anything but a dead-end job.

But over the past two years, one recruiter estimates, at least 50 corporate lawyers have left top Manhattan law firms for in-house legal jobs with Wall Street companies.

“Once you’re in a law firm for several years, you start thinking, ‘Am I getting what I should be getting out of this?’ ” says Cynthia Low, who left Shearman & Sterling for Scudder Kemper Investments Inc. “There were a couple of partners who said that going in-house might be kind of boring. But the work that I’m doing here has great variety.”

Unlike corporations that have bulked up their legal departments to reduce outside counsel fees, the investment banks are adding lawyers in order to keep up with customer demand. Lawyers with Wall Street firms say the move is an attempt to provide immediate advice to traders on active desks. They say legal work has grown exponentially with the rise of the Dow.

An attorney at one major Wall Street firm says traders and brokers feel more comfortable seeking advice from a lawyer who is intimately familiar with the brokerage business. The attorney, who declined to be identified, says outside law firms often don’t have the same appreciation for the kind of work that commodity traders and derivatives brokers do.

Meanwhile, the allure of Wall Street is growing among young corporate lawyers because in-house work offers more regular hours than the daily grind at a big law practice. While counsels at investment banks can put in long hours, weekend work is rare, and attorneys are not expected to bill thousands of hours each year.

That is a compelling lure for young lawyers at large firms, where job dissatisfaction is rampant. A recent New York Law Journal poll found that more than 40% of the associates working at big firms said they did not intend to remain lawyers throughout their careers.

Lawyers are also increasingly making the jump to Wall Street because large law firms are naming fewer partners each year.

One benefit of working downtown is that lawyers get to partake in the huge bonuses that investment banks traditionally dole out in good times.

Norman Clark, a principal with legal consultant Altman Weil Inc., says a common refrain he hears from corporate lawyers who have gone to work at brokerage houses is that they are looking for a lifestyle change.

“They say to me, ‘I have a chance to practice securities law, and I don’t have to put up with a lot of business-related things like time sheets, collecting fees and billable hours,’ ” says Mr. Clark, who is currently advising the legal department of a major investment firm.

Crain News Service