New Survey Reports on General Counsel in Law Firms

A recent Altman Weil Flash Survey of AmLaw 200 law firms reports that over two-thirds (69%) have a designated general counsel, up from 63% in 2004.  Each is in-house, rather than a lawyer in another law firm.  92% are partners. 

Altman Weil principal Ward Bower is not surprised by the increase.  “This is reflective of larger law firm recognition of the need for risk management in our post-Enron, Sarbanes-Oxley environment.”  Bower will report on the survey findings at The Law Firm Liability Forum being held in New York City today.

Almost one-third (32%) of law firm general counsel are full time in the position, up from 26% in 2004.  Those that are part-time spend 36% of their total hours on the general counsel function, averaging 753 hours/year, down from 43% and 775 hours the year before.  According to Bower, large firms are more likely to have full time general counsel.

Average total cash compensation for law firm GCs ranged from $250,000 to over $1 million, averaging $493,292.  That figure is up from an average of $386,875 in 2004.

Typically the general counsel reports to the firm Chairman or Managing Partner (64%).  Only 26% serve on their firms’ governing committees, down from 40% in 2004. 

26% of law firm general counsel oversee administrative departments, in most cases the firm’s conflicts function.  Bower sees more emphasis on conflicts due to the level of large firm merger activity today.  “It’s one of the most important aspects of merger due diligence,” he notes.

Access to the general counsel has broadened since 2004.  Partners generally have access in 83% of firms (up from 80% in 2004), and associates in 53%, up from 43%.  In some firms anyone can access the general counsel, a concept Bower supports. 

Functional areas with greatest increase in general counsel responsibility from 2004 were:

• General liability issues:  up 25% (from 59% to 84%).
• Advising firm management:  up 14% (82% to 96%).
• Employment law:  up 12% (53% to 65%).
• Representing firm in disputes: up 10% (74% to 84%).

Areas of greatest decline in general counsel responsibility in 2005 versus 2004 include:

• Equipment/supplier contracts:  down 8% (26% to 18%).
• Professional responsibility issues:  down 6% (88% to 82%).
• Professional liability issues:  down 5 (91% to 86%).
• In-house ethics education:  down 5% (68% to 63%).
• Employment of outside counsel:  down 3% (91% to 88%).

“Overall, we expect to see virtually all major firms with designated general counsel in the near future,” notes Bower.  “More mid-sized firms are moving in this direction as well, either in-house or via engagement of a lawyer in another firm.” 

About the Survey

Survey data was collected in March 2005 from AmLaw 200 law firms, with 39% participating (77 of the 197 firms solicited).  The full report of the tabulated data appears on the Altman Weil website at www.altmanweil.com/news/LawFirmGCSurvey.cfm.

About Altman Weil

Founded in 1970, Altman Weil, Inc. provides management consulting services to law firms, law departments and legal vendors throughout North America, Latin America, the U.K. and Europe. Altman Weil is known for the many legal economic and management surveys it conducts and publishes, including the Survey of Law Firm Economics.