For law firms, the “Of Counsel” designation makes a difference, even though it can signify several different circumstances of the particular lawyer. For in-house lawyers, the differences are meaningless.
Of Counsel lawyers might not make capital contributions, but in-house counsel couldn’t care less.
Of Counsel tend to be senior lawyers, but in-house counsel should care only about value delivered in relation to billing rate, not years out of law school.
They are not expected to bring in clients, but in-house counsel might enjoy the reprieve from practice promotion and cross selling.
They are not equity partners, sharing in the net proceeds at the end of the year, but this has no relevance to in-house counsel.
In short, the arguments are the same as those for the meaninglessness to general counsel of the title “non-equity partner” (See my post of Sept. 5, 2005: non-equity partners.). Treat them as partners for purposes of managing firms.