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Depends what you want. If you want to be in house, staying longer in a firm doesn’t help.
If you want to be a firm lawyer, a stint in house doesn’t really make you more attractive.
I disagree with the above poster. It depends on what type of in house role, but one example is a counsel level cyber specialist is much more valuable than a 3rd year associate. Same concept could be applied to most in house roles. Check high level in house positions on LinkedIn and they are usually filled by people who had multiple years of experience/companies in house, and often even those people are passed over for partner or counsel level in house converts. To your boxed in question, if you start off in a generally unknown or not highly respected company, you may feel boxed in even when compared to juniors or mid-levels going in house and your in house lateral opportunities will be much more limited than someone who started at a well known startup, fund, F500, or Mag 7. You'd probably also have less opportunities than someone who stayed at a firm. General point I'm trying to get across is there is a lot of variance. You need to be very strategic, otherwise you may end up in an inhouse wormhole with minimal raises, low equity refreshes or matches (if lateraling), and generally an unfulfilling career when compared to lock step progression and peers who stayed at a firm.
I’ve found that companies with large in-house legal departments can allow and even encourage their in-house lawyers to switch “practice groups” every few years. You could start out in the IP group and then get recruited to the investigations team or get assigned to provide legal support to a specific brand or product. If you prove yourself to do good work, and have the right connections, you can move around and explore new areas. At law firms, you tend to specialize and stay in one area.