I've heard that working in labor and employment law with a big firm can provide a good path to in-house. How true do you think this is? I realize you touched upon this somewhat above but are there any other practice areas that provide an easier pathway to in-house positions? Also, I'm fairly interested in doing litigation earlier in my career. Would this tend to shut me out of in-house jobs later on? For someone with no business background, are there any upper-level classes you would highly recommend as useful in your career path? If I were to take any classes in the business school, are there any that might be useful?
I think that in-house jobs for basic litigation are less common than corporate jobs. For most companies, there's not enough ordinary-course litigation activity to justify employing a full-time in-house lawyer, whose main job would be supervising outside counsel and local counsel. A lot of companies might have one litigator compared to 10+ corporate lawyers.
Labor/employment law is arguably a little different. There are some companies whose employee bases are either sufficiently complicated or geographically dispersed to warrant having an in-house employment lawyer. This would be particularly true if there's a lot of immigration work or hiring/layoff activity. But I think there's a philosophical divide between companies that would prefer to have the legal department oversee this work and those where the HR departments want to own it. In the latter case, outside counsel would do a lot of the actual work, but this is an area where companies can negotiate cost-effective retainers with law firms. Obviously, the bigger the company, the more likely that it would have an employment lawyer.
If by "labor" you're referring to union work, that's a different story. Companies with collective bargaining agreements will definitely pay lots of attention to the legal/regulatory issues involved. But I don't have lots of insight into this area.