Rising pay reflects demand for in-house counsel, study finds
Fewer in-house counsel are in the market for new jobs, amid rising compensation and a recognition among companies that they need to hang on to their lawyers, new research suggests.
Thirty-eight percent of respondents to a survey by recruiter BarkerGilmore say they would consider a new position within the next year as a result of compensation issues – down from 41 percent in the previous year.
More than ever, companies are trying to retain their general counsel using both pay and perks, notes Amy Feldman, BarkerGilmore managing director for research. The falling percentage of respondents looking to move due to compensation issues reflects increased rates of satisfaction and shows that ‘companies have stepped up their game,’ she tells Corporate Secretary, describing it is a candidate-driven market.
The average annual salary increase rate across all respondents rose to 4.4 percent in 2018, up from 3.8 percent in 2017. The greatest annual rises in salary are seen in the energy (base salaries rose on average 5.4 percent from 2017 to 2018), technology (4.9 percent) and professional services (also 4.9 percent) industries. Across the period 2016 to 2018, most industries saw a dip in rate of salary increases in the 2017 fiscal year, with rates in 2018 increasing to 2016 levels.
Overall, general counsel at public companies attract the highest levels of income in the technology industry with an average of $919,000 in total compensation, according to the report. Those in the professional services industry rank second with an average of $912,500, followed by industrial and manufacturing ($830,000) and financial services ($810,750).
There has been a particular increase in demand for attorneys with expertise in the compliance and intellectual property (IP) fields, Feldman says. In terms of IP, there is a relatively small pool of attorneys who both understand technology and can advise on the business side of companies, which can at least in part explain the higher compensation general counsel receive in the tech industry.
In compliance terms, there has always been a strong desire to find attorneys with a pure regulatory background and relationships with regulators, and a lot of companies are struggling to find such candidates, Feldman says.
BarkerGilmore’s survey was completed by more than 2,000 in-house attorneys in the US between February and April 2019.
GENDER PAY GAP
The survey also highlights the continuing disparity between compensation levels for male and female in-house attorneys. On average, women in such roles earn 85 percent of their male counterparts’ compensation: $313,782 in total compensation for women versus $368,000 for men.
The gap is largest – 17 percent – at the general counsel level, although this is 5 percentage points narrower than in 2017. The disparities are lower at the managing counsel (5 percent) and senior counsel (7 percent) levels and, again, both figures are lower than the year before.
Despite lagging in terms of total compensation, female in-house counsel base salaries increased on average at a rate of 4.5 percent in 2018 compared with 4.3 percent among their male colleagues, according to the survey.
Feldman explains that the slight narrowing of the gender pay gap may in part be a result of new legislation in several states, including New York, that bars new employers from asking candidates about compensation at their previous job. The idea is to help break down historical disparities.
But there is little sign that differences in pay for attorneys at public and private organizations are disappearing. The latest BarkerGilmore survey shows that compensation for those at publicly traded companies is significantly higher.
At the general counsel level, the gap is 47 percent in terms of average total compensation. For example, general counsel at private tech firms earn on average $405,000 in total compensation compared with the $919,000 received by their peers at public companies.
The disparity is due largely to long-term incentive compensation, notably in terms of stock, which is offered by most public companies.