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When all other metrics between candidates are somewhat equal, most companies will prefer the candidate with relevant industry experience. It’s just one less thing the new lawyer has to get up to speed on.
It can count for a lot. You're right that the legal work, or at least much of it, might be transferable. There's still a lot of knowledge gained by working within an industry and that can't be discounted. On the simplest level, someone within an industry will likely be favored just because it would be considered a "safe hire."