This year, in-house counsel reported unprecedented rates of compensation satisfaction, with over 62% of lawyers unlikely to look for a new job and almost 60% believing their compensation is appropriate in comparison to peers. Our search consultants and advisors observe this contentedness in the market daily. With the legal function constantly evolving to include business advisory and leadership roles, especially at the General Counsel and Managing Counsel levels, organizations have made compensation packages more compelling and use counter offers to retain high-performers tempted to leave. In turn, in-house counsel are well-paid, enjoy the law department culture, experience comradery and business challenges, and are bound by golden handcuffs due to rich stock packages and a bull market.
The legal world today has largely become a candidate-driven market where top attorneys have multiple career options. Even law firms are experiencing a higher level of career satisfaction, offering mentoring opportunities, higher salaries, better work-life balance, and providing other benefits to enhance retention. Because of this, the price of top legal talent increased significantly in 2018 and shows signs of continuing through 2019. In a highly competitive market, law departments seeking to fill key positions need to find ways to communicate more compelling reasons for someone to join their organization in addition to offering compensation packages that surpass the current medians.
The 2019 In-House Counsel Compensation Report helps attorneys and employers navigate the complexities surrounding a highly competitive market. Among many interesting trends in the past year, we isolate the following six points as the most prominent:
- Annual Salary Increase Rates: The average annual salary increase rate for all positions across industries increased to 4.4%, up 0.6% from the previous year, with the energy sector experiencing the highest increase rate of 5.4% from 2017 to 2018. Across almost every industry, increase rates rose from 2017 to 2018, except for in the life sciences industry, where increase rates peaked in the 2017 fiscal year. Across a three-year span, most industries saw a dip in increase rates in the 2017 fiscal year, with rates in 2018 raising to match those measured in 2016.
- Peer Comparison: 41% of all respondents believe their compensation is below or significantly below that of their peers in other organizations, with labor & employment lawyers and insurance reporting the greatest dissatisfaction. Those in the tax, compliance, and intellectual property practice areas express the highest levels of satisfaction with over 25% reporting compensation above or significantly above average.
- Who’s on the Market: 38% of respondents indicate that they would consider a new position within the next year due to compensation issues, 3% less than the previous year. Those in the financial and healthcare industries report the greatest likelihood of a job search in the next year, while those in the life sciences industry are the least likely to engage in a job search. This year, in-house counsel with practice area concentrations in litigation and insurance are most likely to consider a move for compensation issues, while those who identify with a real estate or energy practice area report least likely to move.
- Public vs. Private: Consistent with the last 3 years, 2018 reveals that the compensation of those at publicly traded companies is significantly higher than at private organizations, largely due to the long term incentive (LTI) compensation offered by most public companies. Again, the gap is significant at the General Counsel level, with a 47% disparity in total compensation, but it is less noticeable as position level decreases.
Across all position levels, restricted stock units (RSUs) are by far the most common form of LTI compensation at public companies; over 50% of all LTI recipients report a structure surrounding RSUs. In private organizations, if LTI is offered, the structure is much more variable and may come in the form of stock options or restricted cash.
- Gender Pay Trends: On average, female in-house counsel earn 85% of what male in-house counsel earn. The disparity is largest at the General Counsel level, with a 17% gap, 5% smaller than the previous year. The Managing Counsel and Senior Counsel levels reveal disparities of 5% and 7% respectively, both lower than the prior year.
Despite the disparity in total compensation, female in-house counsel base pay increased at a rate of 4.5% in 2018, while male in-house counsel base pay increased about 4.3%.
- Industry Highs & Lows: The following chart summarizes the highest and lowest paying industries for each position (based on total compensation):
|Managing Counsel||Industrial & Manufacturing||Financial|
|Senior Counsel||Life Sciences||Financial|
|Managing Counsel||Professional Services||Professional Services|
In addition to these key trends, the 2019 report features a detailed breakdown of specific compensation figures for every position level – General Counsel, Managing Counsel, and Senior Counsel. Download your free copy of the 2019 In-House Counsel Compensation Report for access to highly valuable benchmarking data today!
BarkerGilmore is a boutique firm of distinguished consultants who are recognized by CEOs, boards, and corporate legal and compliance leaders as best-in-class executive search consultants, advisors, and coaches. Our niche concentration affords us access to a specialized network of talent, and we have established relationships that allow us to identify the best legal and compliance professionals for any assignment. We are attentive to each of our client’s business culture and understand their brand, strategy, and leadership needs. We pride ourselves on being able to provide the highest standard of service and on establishing meaningful and long-lasting relationships with our clients.