Introduction to the profession of in-house counsel
The in-house counsel is a licensed Rechtsanwalt who works as a permanent employee in a company, organization, association, or other institution. Unlike independent Rechtsanwälte, they do not practice in their own law firm, but rather take on legal tasks for their employer. The role combines legal work with internal company structures and the requirements of business, administration, or associations.
Basics and Legal Framework
Definition
In-house counsels are Rechtsanwälte who focus on providing internal legal advice and representation for their employers. They advise company management, specialized departments, and often act as an interface with external Rechtsanwälte and authorities. The term was defined by law after years of discussion and is now firmly rooted in German law.
Statutory Basis
The activities of in-house counsel have been comprehensively regulated since the Act for the Reorganization of the Law of In-house Rechtsanwälte (Syndikusgesetz, 2016) came into force. The key legal basis is in particular § 46 of the Federal Lawyers’ Act (BRAO). Accordingly, admission as an in-house counsel is subject to certain prerequisites, especially a clear separation between legal and non-legal tasks within the company. Unlike traditional Rechtsanwälte, the in-house counsel is generally subject to instructions and acts exclusively for their employer.
Admission and Scope of Activities
A dual admission is generally possible, so that a person can work both as in-house counsel and as an established Rechtsanwalt. Admission requires, in addition to passing both state law exams, an application to the relevant lawyer’s court and proof of legal activity within the company. This includes the independent handling of legal matters but is not limited to litigious activities.
Historical Development
The role of in-house counsel has evolved over the course of the 20th century. Originally, Rechtsanwälte practiced only in their own law firms. With increasing economic and societal complexity, the importance of legal advisory functions within companies, associations, and organizations grew. For a long time, the recognition of the activity as a legal profession by professional bodies was contested, especially regarding entitlement to the title “Rechtsanwalt” and access to professional pension funds. In 2014, the Federal Constitutional Court ruled that in-house counsels could, under certain conditions, have access to the legal pension fund. The subsequent legislation created clear framework conditions and helped establish the profession.
Requirements for In-house Counsels
Education
The path to becoming in-house counsel requires the same qualifications as admission as a Rechtsanwalt. This includes studying law with the First State Exam, the legal clerkship (Referendariat), and the Second State Exam. Afterwards, admission to the legal profession follows, supplemented by the application for special admission as in-house counsel.
Personal Competencies
In addition to legal expertise, working as in-house counsel requires business-oriented thinking, strong communication skills, and negotiation abilities. Since many tasks are carried out independently—but always in the context of the organization—analytical skills, business acumen, and sound judgment are advantageous.
Independence and Subordination
In-house counsels occupy a special position. On the one hand, professional independence and confidentiality obligations apply; on the other hand, as employees, they are integrated into company hierarchies. The legislature has recognized these particularities and enables in-house counsels both to maintain legal independence and to consider the legitimate interests of the employer.
Typical Areas of Responsibility
Legal Advice to the Employer
In-house counsels cover a broad spectrum of legal issues. This includes drafting, reviewing, and negotiating contracts, labor law advice, data protection issues, and support in compliance and governance matters.
Litigation and Out-of-court Representation
They represent the company in legal disputes, especially in out-of-court negotiations. Representation before German courts is generally limited to the employer and varies depending on the type of admission.
Committee Work and Association Activities
In associations and organizations, in-house counsels handle legal matters related to association law, articles of association, policy advice, and representation of interests.
Interface Management
In-house counsels regularly coordinate cooperation with external law firms, tax advisors, and authorities. They prepare facts, assess risks, and develop legal courses of action.
Compliance and Corporate Governance
In many larger companies, there is a strong focus on developing and monitoring compliance programs. Adherence to statutory and regulatory requirements is among the core tasks, as well as advising on strategic risk management.
Perspectives and Career Paths
Opportunities for Advancement
With increasing professional experience, in-house counsels often take on management roles, such as Head of Legal Department, Chief Legal Officer (CLO), or executive positions. They can also assume additional responsibility as Compliance Officer or Data Protection Officer.
Transition to Independent Practice
The transition from working as in-house counsel to traditional private practice is legally possible. Professional experience as in-house counsel is fully recognized for acquiring specialist lawyer titles and other qualifications.
Positions in Associations and Public Institutions
In particular, in advocacy groups, chambers, or non-profit organizations, in-house counsels are in demand. They work at the interface of law, politics, and business.
Working Conditions and Remuneration
The remuneration of in-house counsels depends on industry, company size, and experience level and can vary considerably. In international companies and in the financial or technology sectors, salaries are often above average. Working conditions are usually characterized by structured environments, regular working hours, and extensive social benefits. Remote work and home office are also becoming increasingly important.
Frequently Asked Questions (FAQ)
What distinguishes an in-house counsel from a traditional Rechtsanwalt?
In-house counsels are employed by a company or organization and advise only their employer, whereas traditional Rechtsanwälte work independently or in law firms and advise or represent clients.
Are there continuing education requirements for in-house counsels?
Yes, there are continuous continuing education requirements for in-house counsels as well. They must stay informed about current legal developments and business-relevant issues.
Can in-house counsels appear in court?
In court, in-house counsels generally represent only their employer. They are not permitted to represent third parties in court unless they are also admitted as Rechtsanwalt and their admission for private practice is not revoked.
Is access to the legal pension scheme possible?
Since the amendments to professional law, in-house counsels also have access to the pension fund. A prerequisite is admission under § 46 BRAO.
Which industries employ in-house counsels?
In-house counsels are in demand in almost all industries—for example, industry, commerce, banking, insurance, IT, health, and energy sectors, as well as in associations and public institutions.
Are there special liability regulations?
Liability is based on the underlying employment contract and professional regulations. As a rule, the employer is liable to third parties, while special agreements can establish limitations of liability internally.
The profession of in-house counsel offers a wide range of development opportunities and is a significant career path that combines demanding legal tasks with business practice and strategic management.
Frequently Asked Questions
Is a license to practice law absolutely necessary for an in-house counsel?
An in-house counsel must be admitted as a Rechtsanwalt in order to work in this special capacity. According to § 46 para. 2 BRAO (Federal Lawyers’ Act), admission is the basis for exercising legal activities, even if these are performed within a fixed employment relationship with a company or association. Admission ensures that the in-house counsel can uphold the professional duty to act independently, on their own responsibility, and without instructions. In addition, only admitted in-house counsels are authorized to use the professional title “Syndikusrechtsanwalt” and to claim the privileges of a Rechtsanwalt, such as professional protection, confidentiality, and right to refuse to give evidence. Without admission, working as in-house counsel cannot be lawfully performed.
What professional duties apply to in-house counsel in companies?
In-house counsels are subject to the same professional duties as traditional Rechtsanwälte. These include, in particular, confidentiality under § 43a para. 2 BRAO, the prohibition of representing conflicting interests (§ 43a para. 4 BRAO), as well as the requirement of independence (§ 43a para. 1 BRAO). Despite the employment relationship with the employer, the in-house counsel is required to perform their duties for the company independently, free from extraneous instructions, and in compliance with applicable laws and professional rules. Violations of these duties can result in professional consequences, such as reprimands up to revocation of the license.
To what extent is the in-house counsel exempt from statutory pension insurance?
In-house counsels can, upon application, be exempted from statutory pension insurance if they are members of a professional pension fund, as provided by § 6 para. 1 sentence 1 no. 1 SGB VI. However, the exemption only covers those activities that meet the admission requirements and professional duties of a Rechtsanwalt, i.e., typically legal advice and representation as part of a fixed employment relationship. It does not cover activities that are purely administrative, entrepreneurial, or managerial without substantial connection to legal practice. An exemption must be applied for each employment relationship and professional activity individually and is subject to approval by the German pension insurance authority.
Can an in-house counsel practice as an independent Rechtsanwalt on the side?
According to § 46a para. 1 BRAO, in-house counsels are generally permitted to work as independent (freelance) Rechtsanwälte alongside their company position, provided there are no specific conflicts of interest—especially mandate conflicts under § 43a para. 4 BRAO. The condition is that admission for both the position as in-house counsel and as a “traditional” Rechtsanwalt must be applied for and granted separately (“dual admission”). Both the Rechtsanwalt and the employer are responsible for ensuring there are no conflicts of interest or violations of professional independence. Additionally, the part-time legal activity must comply with the employment contract and any internal company compliance policies.
What liability provisions apply to in-house counsels in their work for the company?
Unlike self-employed Rechtsanwälte, in-house counsel are generally integrated into company structures. Therefore, liability is primarily governed by the principles of employment law: For errors in legal activity, the company as employer (“statutory representative”) is usually liable, not the in-house counsel personally, as long as there is no intentional or grossly negligent conduct. However, in cases of severe breaches of duty, personal liability may arise, especially for intentional misconduct or blatant violation of professional duties. Professionally, liability insurance is required for in-house counsels (§ 51 BRAO), the minimum coverage and terms of which may differ from those for private Rechtsanwälte.
Are in-house counsels allowed to advise or represent clients outside their company?
In-house counsels may, under § 46 para. 5 BRAO, only represent and advise “their employer” or affiliated companies. Handling external mandates—that is, advising or representing third parties—is expressly forbidden as part of their role as in-house counsel. Such mandates are only permissible if the in-house counsel is also admitted as an independent Rechtsanwalt (dual admission) and there is a clear separation between the fields of activity. Any mixing of company and external mandates violates professional regulations and may result in disciplinary action.