Are the pay packages in your legal department keeping up with the Joneses? The new “In-House Counsel Compensation Report” from General Counsel Metrics LLC and Major, Lindsey & Africa, a legal search firm, deciphers the trends in compensation by compiling data from over 1,700 in-house lawyers at approximately 480 U.S. and Canadian companies. The information used for the report includes: base salaries, cash bonuses, law school graduation years, primary practice areas, company revenues, and company industries.
“It’s data that we all deal with a lot, but we never collected it all at once and analyzed it,” said Rees Morrison, president of GC Metrics. He says the report provides a “roadmap for roughly figuring out where [counsel] sit on [the compensation] spectrum.”
“There’s so much hype around lawyer compensation in general, and I think the expectation is that it’s very high,” Bob Graff, vice president of global business development at ML&A told CorpCounsel.com. In reality, he noted that in-house lawyers and GCs probably work more predictable, shorter hours than their Big Law counterparts, and thus salaries are “in a much tighter, realistic range,” says Graff. “They’re not as high as people may think.”
Just how high are they? From company revenue to practice experience, the report found five major trends:
1) Experience matters in-house. “Median base salaries for in-house lawyers cross the $180,000 mark at about 20 years experience, and peak at about 30 years out of law school,” the report says. The median salary for a lawyer who graduated law school in 1975 is $195,000, whereas the median salary for a lawyer who graduated in 2010 is $75,000. Not surprisingly, bonus levels for all in-house lawyers peak at 25-30 years of experience.
2) The size of the company and industry correlate to the size of a GC’s bonus. The report found that general counsel’s bonuses “do not appear to be highly correlated with years of experience.” For GCs, the size of the company and the industry were more relevant to their bonuses. For GC base salaries, the years of practice experience were pertinent, but the report found that regardless of experience, “the bulk of GCs . . . make a base salary of approximately $250,000.”
3) Extractive/mining/chemicals is the most lucrative industry for in-house counsel. The extractive/mining/chemicals category is the highest-paid sector for general counsel, followed by the food and beverage industry. For in-house counsel at all levels, the medical device and pharmaceutical sectors join the extractive industry to round out the highest-paid industries. For both GCs and in-house lawyers, not-for-profit is, not shockingly, the lowest-paid sector.
4) Salaries are comparable for in-house lawyers across company sizes. The report found that “across all company sizes, median total cash compensation for all in-house lawyers is in a remarkably tight range.” The median total compensation, which includes base salary and cash bonuses, for in-house lawyers working for companies with revenues of less than $1 billion is $170,000. The median salary for lawyers working at companies with revenues of more than $5 billion is $205,405.
“It’s as if Corporate America has hit upon roughly . . . the value in-house lawyers bring and then tend to coalesce around that value for the total cash compensation,” says Morrison. There is a similarly tight range with respect to in-house bonuses — with the exception of lawyers practicing in the securities industry, whose median bonuses were $48,000, compared to $28,000 bonuses in the second-highest industry, mergers and acquisitions.
5) Past $1 billion in revenue, GC salaries stay in a tight range. For general counsel, once the company’s revenue passes the $1 billion dollar range, base salaries stay in a comparable range. GCs who work for companies with less than a billion in revenue can expect a median salary of $245,000. At the $1 billion revenue mark, salaries start at a $320,000 median, and then bump up to $350,000 for those working at a company with over $5 billion dollars in revenue.•