In-house lawyers work hard for the money. And in spite of a still-sputtering economy, their companies appear to be treating them right. Respondents to a recent survey by HBR Consulting overwhelmingly indicated that compensation for in-house lawyers went up in the past year.
Seventy-nine percent of companies said pay for in-house counsel went up modestly, while 19 percent said compensation remained flat. Just 2 percent of companies reported a modest decrease in pay.
Lauren Chung, HBR senior director and editor of the survey, says they’re seeing a picture that looks a lot different than it did couple of years ago. “Most companies were either keeping compensation flat or decreasing it,” says Chung. “We’ve seen a steady increase, and that’s a good thing.”
“The 2012 HBR Law Department Survey” covers the period from March 2011 to March 2012. It contains data compiled from more than 6,000 lawyers and more than 5,000 non-attorney staff. Sixty-eight percent of respondents came from companies at or above the Fortune 500 threshold of approximately $4 billion in annual revenue.
Compared to the previous year’s numbers, pay ticked up in all categories. Base pay, cash bonuses, total cash compensation, and total compensation all improved year-over-year. “The bottom line,” says Chung, “is that we’re seeing increases across the board.”
General counsel saw the biggest gains in this year’s survey. Base salaries for chief legal officers jumped up an average of 5 percent, compared to a 3.4 percent average increase for lawyers at all levels. “Overall, chief legal officers have received the highest pay increases,” according to Chung. It’s a trend, she says, that’s reflective of the evolving role of the GC during the past five plus years.
Average total compensation—which includes base pay, cash bonus, and the value of long-term incentives—for chief legal officers was $1.96 million (median $1.67 million) in this year’s survey. Cash bonuses, which averaged $518,000 (median: $439,300), made up almost 45 percent of the average GC’s total compensation package.
Cash bonuses for all attorneys went up an average of 3.4 percent, to $62,500 (median: $46,300). The increase wasn’t as dramatic as a year earlier, when bonuses rose more than 25 percent after a period of fiscal drought. But this year’s survey shows that bonuses are “coming back to solid levels,” says Chung. She points out that companies are incentivizing in-house lawyers by linking bonuses to individual performance, and overall, company performance is improving.
And in-house lawyers can expect to see more of these types of pay packages. Seventy-eight percent of respondents said they were moving more base compensation to variable pay. Chung expects that the trend toward performance-based compensation models will continue.
Total cash compensation, comprised of base salary plus bonus, went up for all lawyers an average of 1 percent compared to the 2011 survey. The average total cash compensation for GCs was $1 million (median: $942,200) and $314,700 (median: $257,200) for all attorney levels.
Chung doesn’t expect she will see any big surprises after crunching the numbers of the 2013 survey this time next year. “We’ll continue to see modest increases,” she says. “I think we’re on a steady climb.”
See also: “The 2012 GC Compensation Survey,” CorpCounsel, August 2012.