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For the past 30 years, Altman Weil, Inc. has conducted and published its annual Law Department Compensation Benchmarking Survey (the Survey). The Survey is an important tool that allows corporate human resource departments and CLOs to position lawyer compensation based on relevant benchmarks. Altman Weil’s 2004 Edition of the Survey consists of salary, bonus and total compensation data earned by in-house lawyers in 2003. The Survey also reports specific information related to stock options and other incentives. Surveys should never be the sole tool in determining lawyer compensation. They do, however, provide important benchmarking information to be used in conjunction with an individual’s performance, professional background and specialty area, as well as other factors. This article focuses on the salaries of in-house lawyer positions. Medians, rather than averages are the statistical measure of comparison used in this article. Some averages tend to have large outliers, particularly on the high end, which may distort comparisons. The good news for in-house counsel is that overall salaries increased from 2002 to 2003 for most lawyer positions. The upturn in the economy appears to have resulted in positive increases in lawyer salaries. Unlike law firms that generally have up to four levels of lawyers, law departments can have seven or more different levels of lawyers. Positions in a company range from the Chief Legal Officer (CLO) or the General Counsel to the staff counsel, with varying levels in between. The following lists illustrate the different levels of career progression in law firms versus law departments. LAW FIRM STRUCTURE ��Equity Partner ��Non-Equity Partner ��Of Counsel ��Associate LAW DEPARTMENT STRUCTURE ���Chief Legal Officer ���Deputy CLO ���Division General Counsel ���Managing Attorney ���High Level Specialist ���Senior Attorney ���Staff Attorney MANAGEMENT LAWYERS CHIEF LEGAL OFFICER SALARIES UP 7 PERCENT The Chief Legal Officer is defined as a lawyer who heads the corporate legal function for a company. The 2003 median salary for the Chief Legal Officer was $275,000. This represents a 7.8 percent increase from 2002. The highest CLO salaries and bonuses were in Oklahoma, Arkansas, Texas and Louisiana (These states represent the West South Central region in the Survey). The lowest CLO salaries were in North and South Dakota, Minnesota, Iowa, Nebraska, Kansas and Missouri (These states represent the West North Central region). There was a correlation between the size of a company and CLO salary. Companies with the most employees and higher annual sales revenue had the highest CLO salaries. Also, the greater the number of lawyers in the law department, the higher the CLO salary. The difference between law departments with fewer than 25 lawyers and those with more than 25 lawyers was $100,000 in CLO salary. CLOs who manage a centralized law department, where most of legal activities and personnel report in a direct line to the CLO, saw higher salaries than law departments that have decentralized reporting relationships. The number of years the CLO has served in the position has an inverse effect on salary. CLOs in the position for a short amount of time report higher salaries than those with more years in the position. Those in the position for 1 year or less made $36,000 more than CLOs with more than 20 years’ experience. Some industries pay lawyers better than others. Generally, the more mature industries that have had lawyers or law departments for decades or that are especially litigation sensitive, may have higher lawyer salaries. Utility companies and wholesale/retail trade industries pay their CLOs higher salaries than other industries. DEPUTY CHIEF LEGAL OFFICER SALARIES UP 5 PERCENT The Deputy Chief Legal Officer is defined as the lawyer who shares law department-wide management responsibility and reports to the Chief Legal Officer. 2003 salaries for this second in command position increased by 5.3 percent over 2002 salaries. The Deputy CLO national median salary was $215,000 in 2003. Compared to other regions in the U.S., Deputy CLOs in the Mid-Atlantic region had the highest median salary at $256,500 and the highest bonuses (States in this region include: New York, Pennsylvania and New Jersey). The West South Central region, with a median salary of $197,200, reported the lowest salaries overall. In most regions, total cash compensation for the Deputy CLO was between $281,500 and $294,200. The exceptions were the Mid-Atlantic region with median total cash compensation of $409,000 and the Pacific region at $338,400. There was no correlation between the number of years in the Deputy CLO position and salary. For Deputy CLOs in the position for 1 year or less, the median salary was $225,000. For those in the position longer (16-20 years), the median salary was $220,200. Companies in the manufacturing industry paid the Deputy CLOs higher salaries than those in the utilities, wholesale/retail trade, transportation, finance/insurance and services industries. DIVISION GENERAL COUNSEL SALARIES UP 5.5 PERCENT The Division General Counsel is defined as a lawyer who supervises subordinate lawyer-managers and reports to the CLO or Deputy CLO. The 2003 national median salary of the Division General Counsel was $197,600, a 5.5 percent increase from 2002. Division General Counsel in California, Oregon and Washington, with a median salary of $215,700, had the highest salary in U.S. regions (These states represent the Pacific region). Of the large consolidated metropolitan areas that provided Survey data, Division General Counsel in the New York/Northern New Jersey/Long Island and Washington/Baltimore area had the highest salaries. Similar to the Deputy CLO position, there is no correlation between years in the Division General Counsel position and salary. Division General Counsel in the position for 1 year or less had a salary of $200,000 and those over 20 years had a salary of $198,000. Companies in the manufacturing industry paid higher Division General Counsel median salaries than other industries. MANAGING ATTORNEY SALARIES DECREASE 2.8 PERCENT The Managing Attorney is defined as a lawyer who has management supervision over several salaried lawyers and who also performs legal work. The national salary was $161,000, which represents a 2.8 percent decrease from 2002. This was the only management position that experienced a decrease. Lawyers in the East South Central region reported the highest median salary at $180,000, but the lowest bonus (States include Kentucky, Tennessee, Mississippi and Alabama). The Mountain region reported the lowest salary (These states include Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico). There was a positive correlation between the number of employees in a company and the Managing Attorney’s salary — the more employees in a company, the higher the Managing Attorney salary. The exception was for companies with more than 15,000 employees where the Managing Attorney had a slightly lower salary than companies with 1000 to 15,000 employees. NON-MANAGEMENT LAWYERS HIGHT LEVEL SPECIALIST SALARIES UP 4 PERCENT The High Level Specialist is defined as a specialized lawyer with 12 or more years of experience. The 2003 national median salary for the High Level Specialist position was $138,100. This represents a 4.1 percent increase from 2002. Lawyers in the East South Central region had the highest salary at $146,000. The Mountain region had the lowest salary at $99,000. The consolidated metropolitan areas that had the highest salary are Detroit/Ann Arbor/Flint at $152,000 and Chicago/Gary/Kenosha with $146,000. Companies with 5000 to 15,000 employees paid higher salaries for this position. There was a correlation between company size and the High Level Specialist salary. The higher the number of employees in the company, the greater the salary. Larger companies tend to have many sophisticated business units that require substantive legal specialization. This appears to account for the higher salaries. The exception was for companies with more than 15,000 employees. Those salaries were less than companies with 1000 to 5000 employees. The High Level Specialist in law departments with 11 to 25 lawyers had higher salaries than larger and smaller law departments. Interestingly, salaries of law departments with more than 25 lawyers were $14,000 less than those with 11 to 25 lawyers. High Level Specialists with 16 through 20 years experience had the highest salary at $153,000. There was only a $2000 difference in salary between High Level Specialists in the position for more than 20 years and those in the position for 2 to 5 years. The manufacturing industry paid the highest salary for this position. SENIOR ATTORNEY SALARIES UP 3.9 PERCENT Senior Attorneys are defined as lawyers who have practiced 8 or more years. The 2003 national median salary for a Senior Attorney was $125,200. This was a 3.9 percent increase from 2002. Senior Attorneys in the Pacific region had the highest salary at $134,100. The lowest salary was reported in the Mountain region at $106,200. Other regions’ salaries were generally around $120,000. The consolidated metropolitan area that had the highest salary was San Francisco/Oakland/San Jose area with a median salary at $149,100. The Sacramento/Yolo area had the lowest median salary at $104,100. There was a positive correlation between years in the Senior Attorney position and salary — the more years in the position, the higher the salary. There was no apparent correlation between company size and salary. Companies with more than 15,000 employees had a slightly lower salary than those with 1000 to 5000 employees. Companies with 1,000 to 5000 employees paid the highest salary to Senior Attorneys. Companies in the manufacturing industry also paid the highest salaries by industry. ATTORNEY SALARIES UP 5.2 PERCENT An Attorney is defined as a lawyer who has been practicing for 4 or more years. The 2003 national median salary was $100,000, which was a 5.2% increase from 2002. At $112,500, the West South Central region reported the highest salary for those in the Attorney position. The East South Central region reported the lowest salary at $93,600. Houston/Galveston/Brazonia had the highest median salary of consolidated metropolitan areas. The size of the company appeared to have no direct relationship on salary. Law departments with 1000 to 5000 company employees reported the highest salary at $106,500. While Attorneys with over 20 years’ experience reported the highest salary, the number of years in the position did not have a large bearing on salary. STAFF ATTORNEY SALARIES DECREASE BY 1.9 PERCENT A Staff Attorney is defined as an entry-level lawyer with at least 1 year of experience. The 2003 national salary for the staff attorney position was $68,000. This represents a 1.9 percent decrease from 2002. The West South Central region reported the highest salary ($83,300) for this position. The Detroit/Ann Arbor/Flint had the highest metropolitan area salary at $118,400. Staff attorneys in companies with 1,000 or fewer employees reported the highest salary. Smaller law departments with two to five lawyers and six to 10 lawyers reportedly paid the staff attorney a higher salary than law departments with 11 or more lawyers. Staff Attorneys in the position for 1 year or less or with 2 to 5 years had the same median salary of $68,000. Companies in the manufacturing industry had the highest Staff Attorney salary at $111,900. Those in the service industry had the lowest salary at $52,300. SUMMARY Overall, the manufacturing industry pays the best lawyer salaries. This industry continues to be one of the most mature industries in the U.S. It has long utilized lawyers and understands the importance of lawyers in its business. All management lawyer positions saw a salary increase except for the Managing Attorney position. With the exception of the Managing Attorney position, senior management lawyers in their position for one year or less were paid the highest salaries. The Staff Attorney position was the only position to decrease in salary. While many companies continue to downsize, they are still working to maintain competitive management and non-management lawyer salaries and compete with law firms for the top legal talent. Virginia Grant is a consultant with Altman Weil, Inc. She works out of the firm’s Newtown Square, PA office, and can be reached at 610-886-2009, or via e-mail at [email protected] Subscribe to The Coporate Counselor.

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