Corporations Are Paying More for In-House Lawyers, New Survey Reports
The 2005 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 that corporations are willing to compete on an economic basis with law firms to attract and retain legal talent in-house.
“This compensation data reflects the continued importance of legal services and the rising cost of those services,” notes Altman Weil principal Dan DiLucchio. “As law departments compete with law firms for legal talent, the corporation has had to pay more to recruit lawyers. When you consider the increasing demands on in-house counsel, this makes sense.”
"Increased scrutiny of corporate behavior in recent years, compliance with Sarbanes-Oxley and numerous other issues underscore the importance of an effective in-house legal department," explained Fred Krebs, president of ACC. "It is no surprise that corporations and their directors recognize the value of in-house attorneys and compensate them accordingly."
Base Salaries Rise
Median salaries for senior positions in law departments increased this year, with Chief Legal Officers (CLOs) and Division General Counsel up between 4.1% and 5.4% respectively. Lawyers in more senior non-management positions also saw increases, with Senior Attorneys up 6.2% and Staff Attorney positions reporting an increase of 4.7%. Recent Graduate salaries were flat, with no reported change.
The survey reports national median salary for Chief Legal Officers in 2005 at $280,000. The Senior Attorney position drew $129,000, while a new law school graduate earned a salary of $60,000.
Bonuses Up Across the Board
Nationally, in-house positions reported significant increases in median annual bonuses this year. CLOs reported the largest bonuses with 2005 increases of 39.5% over 2004 bonuses, continuing the trend of steadily increasing bonuses over the last several years. Other positions showed significant increases as well, with High Level Specialists showing a 52.3% bonus increase over 2004.
The national median bonus for Chief Legal Officers was $150,000, according to the Survey. Division General Counsel (a mid-level management position) received $91,200 in bonus dollars, and Senior Attorneys with six or more years of experience took home a $27,100 bonus.
“We observed these double-digit cash bonus increases last year and bonus amounts continue to grow. These numbers seem to support the fact that performance – both personal and corporate - is driving compensation decisions,” explains DiLucchio.
Stock Options Rebound
After significant decreases in stock option values two years ago, option values continued to rebound. The 2005 Survey reports CLO options up a dramatic 43.6% to $888,600 (median) in value and Division GC options up 14.5% to $284,400.
Other Variables
The survey reveals a significant difference in CLO total cash compensation by industry. Median compensation of CLOs in the Wholesale/Retail sector earned 58.7% more that their colleagues in the Service sector and 16.6% more in total cash compensation than their peers nationally.
Size of law department continues to be factor in the top officer compensation. Chief Legal Officers in departments with over 25 lawyers took home 67.8% more than the national median in total cash. Deputy CLOs earned 11.9% more, and Division GCs earned 10.1% more than the national medians.
Regionally, Chief Legal Officers in the New York/ Northern NJ / Long Island area took home 23.8% more than the national median in total cash compensation. CLOs in San Francisco/Oakland/San Jose earned 11.4% more on average, while top in-house lawyers in Chicago/Gary/Kenosha received 1.1% less in median total cash compensation.
Survey Methodology
The complete Altman Weil Law Department Compensation Benchmarking Survey, 2005 edition contains data from 297 law departments providing compensation data for 7,908 lawyers. Information on an additional 36 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 are analyzed by industry, company size (revenue and employees), law department size, region, metropolitan area, years of experience and other key parameters. Data are reported as of March 1, 2005. The survey is available from Altman Weil Publications for $685.
About Altman Weil
Founded in 1970, Altman Weil, Inc. provides management consulting services to law firms, corporate and government law departments and legal vendors throughout North America, Latin America, the U.K. and Europe. Altman Weil is also known for the many legal economic and management surveys it conducts and publishes, 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.
About the Association of Corporate Counsel
The Association of Corporate Counsel is the in-house bar associationSM, serving the professional needs of attorneys who practice in the legal departments of corporations and other private sector organizations worldwide. The association promotes the common interests of its members, contributes to their continuing education, seeks to improve understanding of the role of in-house attorneys, and encourages advancements in standards of corporate legal practice. Since its founding in 1982, the association has grown to more than 18,000 members in more than 55 countries who represent 7,500 corporations, with 46 chapters and 13 committees serving the membership. Its members represent 49 of the Fortune 50 companies and 98 of the Fortune 100 companies. Internationally, its members represent 42 of the Global 50 and 74 of the Global 100 companies. For more information, visit www.acca.com.
Contact Information
Contacts:
Daniel J. DiLucchio, Jr.
Altman Weil, Inc.
Principal
610.886.2000
djdilucchio@altmanweil.com
David Barre
Association of Corporate Counsel
Director of Communications
202.293.4103 x354
barre@acca.com
