Corporate Belt-Tightening Reflected in Law Deparment Comp, New Survey Reports
(Newtown Square, PA, November 11, 2003) – The 2004 Altman Weil Law Department Compensation Benchmarking Survey of U.S. corporate law departments has just been released. The Survey, published in partnership with the Association of Corporate Counsel (ACC), shows modest salary increases for senior in-house positions, coupled with a decrease in bonus dollars for all but the Chief Legal Officer post.
“Compensation appears to be a zero sum game in this economy,” notes James Wilber, head of Altman Weil’s Corporate Law Department Group. “There’s a trade-off between salary and bonus comp – if the corporation gives in one area, it takes away in the other.”
Salaries Up Slightly
Salaries for senior positions in law departments, including Chief Legal Officers (CLOs), Deputy CLOs, Division General Counsel and Managing Attorneys, were up between 3.1% and 7.2% in 2003. Lawyers in non-management positions reported mixed results, with High-Level Specialist salaries down 7.5%, Senior Attorneys up 1.7%, and Recent Graduates up 7.4% from the previous year.
The Survey reports national average salary for Chief Legal Officers in 2003 at $278,500. The mid-level Managing Attorney position drew an average $162,800, while a new law school graduate (graduating within the last year) earned $62,400 on average nationally.
Bonuses Drop, Except for CLOs
With the exception of the CLO position, cash bonuses dropped between 7% and 16.2% for in-house lawyers in 2003. Deputy CLOs saw an average 14.3% decrease in bonus dollars to $95,000; Division General Counsel earned 16.2% less, collecting an average bonus of $70,700; and Senior Attorneys received $20,200, down 12.2%. In contrast, Chief Legal Officer bonuses were up 11.4% to an average $179,000.
“Bonus dollars have been rising faster than salary dollars for CLOs for the last few years, putting more of their compensation at risk,” explains Wilber. “This is in keeping with a sluggish economy where it is more important to tie executive compensation to performance.”
Stock Option Values Plummet
Stock options, while still potentially worth almost four times annual salary, declined between 22.7% and 61.4% for all positions, the Survey reports. In 2003, the national average fair market value of stock options ranged from $1,035,400 for Chief Legal Officers to $49,000 for Staff Attorneys with at least one year of experience.
Practice Specialties
Practice specialty significantly affects compensation, according to the Survey, with total cash compensation varying by more than 100% by practice for High-Level Specialists. On the high end, International Law Specialists earned $216,600 in total cash comp in 2003, Tax Specialists earned $204,000 and M&A Specialists earned $201,600. At the other end of the spectrum, Insurance Specialists took home $103,300 in total cash compensation.
Regional Data Varies
New York: Top in-house lawyers in the New York City / Northern NJ / Long Island area earn 48% more in total cash compensation than the national average, while salaries for other in-house positions in the same region exceed national averages by 6.4%-31.9%.
San Francisco: Total cash compensation for CLOs in the metropolitan San Francisco / Oakland / San Jose area is 35.7% below the national average in 2003, compared to 18.9% below average last year.
Other metropolitan areas: In the Dallas / Fort Worth metropolitan area, total cash compensation for CLOs is 18.1% above the national average. In the Los Angeles / Riverside / Orange County area CLO compensation is 2.8% above average; and in the Chicago / Gary / Kenosha area, it is 3.1% below average.
Survey Methodology
The complete 2004 Altman Weil Law Department Compensation Benchmarking Survey contains data from 330 law departments providing compensation data for 7,223 lawyers. Information on an additional 82 one-lawyer departments is included separately.
The Survey reports data on nine in-house positions: Chief Legal Officer, Deputy Chief Legal Officer, Division General Counsel, Managing Attorney, High Level Specialist, Senior Attorney, Attorney, Staff Attorney and recent law school graduate. Data is analyzed by industry, company size, law department size, region, years of experience and other key parameters. Data is reported as of March 1, 2003.
The Survey is available from Altman Weil Publications for $625. Altman Weil Publications conducts and publishes numerous surveys of the legal profession including the Law Department Management Benchmarks Survey, the Survey of Law Firm Economics, and the Annual Paralegal Compensation Survey. For additional information visit the Altman Weil website at www.altmanweil.com.
