In-House Legal Compensation Rising

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On Wednesday, HBR Consulting released its 2012 Law Department Survey, which says that salary for in-house legal counsel has increased over the past year. In the report, 79 percent of companies said that compensation for their in-house counsel increased modestly, 19 percent said the compensation stayed the same and two percent said there was a modest decrease in compensation.

Data was acquired from 6,000 lawyers across nine levels and 5,000 non-attorney staff members. The data for compensation in the 2012 survey is as of March 2012 and was compared to the same time from the previous year.

  

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“We are seeing healthy increases in in-house compensation at all lawyer levels, despite the challenging economic environment,” said Lauren Chung, Senior Director and Survey Editor. “With a continuing focus among law departments to keep more work in-house and with steadily increasing compensation levels, the outlook for the in-house market is positive.”

In the category of total compensation, the data increased by 2.6 percent across all lawyer levels. In the 2011 survey, the average increase was 7.8 percent. Total compensation includes cash bonus, base salary and the long-term incentive value.

“Last year’s Survey revealed a dramatic increase in average cash bonus levels between 2010 and 2011,” Chung said. “That jump was attributed to the readjustment of bonus levels. Prior to 2011, bonus payouts were very limited. Bonuses appear to have leveled off this year. This has resulted in relatively lower rates of increase in total compensation compared to the 2011 Survey.”

A chief legal officer received total compensation of $1.96 million on average and $1.67 million on median. For all attorney levels, the average total compensation was $314,700. In 2011, the figures were an average total compensation of $310,400.

When asked if she thought any of the data was surprising, Chung said, “I don’t think anything was surprising. It was good to see the way the results turned out. The in-house market suffered tough times a few years back because of the struggling economy. Bonuses were eliminated. It is good to see a continuing trend of compensation levels improving over the past couple of years. It’s a healthy and modest increase, which is very promising. The outlook is good and that’s the key point.”

 

Chung was asked about the report being a launching point for law firms and companies to determine salary for in-house counsel and staff lawyers. Chung said, “Law departments and companies actively use data in their compensation levels to remain competitive in the market. The report is a highly valuable tool in giving them info in what competitors are paying, what peers are doing and what companies need to take into consideration to attract talent and to retain talent.”