By Laime Vaitkus, Reporter at Bloomberg BNA
While pay rose by around 3 percent for corporate counsel, which is similar to the national average for all positions, companies are seeking to fill more of these positions, particularly in certain practice areas, according to several surveys.
The in-house job market has been growing, largely fueled by corporate law departments’ desire to bring more legal projects in-house, according to Veta T. Richardson, president and CEO, Association of Corporate Counsel, a professional organization.
Increasing hiring and relying on in-house legal staff was the second most common answer nearly 1,300 chief legal officers (CLOs) provided ACC regarding their strategies to reduce their legal spending on outside counsel, Richardson said in an interview with Bloomberg BNA.
Uptick in hiring for certain skills
A rise in legal hiring is forecast in the second half of 2015, according to a recent survey by Robert Half. The survey is based on 200 responses of lawyers with hiring responsibility.
Another study, the Mahlab Report, found that in-house hiring activity is up, with teams expanding and creating new positions.
“We’re starting the see the market shift to great opportunities,” Melissa A. Peters, Esq., Managing Director at Princeton Legal Search Group, said in an interview with Bloomberg BNA.
It’s a change from two years ago, when the market for corporate counsel was softer, she said. Now, hiring is up but companies seek specialized skill sets, such as experience with M&As [mergers and acquisitions] or FDA regulations. “When these people are on the market, they are in demand,” Peters said.
Litigators, on the other hand, are not as much in demand by organizations, she said.
There have been many shifts in the hiring market for corporate counsel, according to Peters. While there is good market for corporate counsel, there have also been plenty of mergers that have put lawyers out of a job as the companies consolidate and eliminate positions, she said.
Three skills plus cybersecurity
The three areas in which the most new positions were created over the past 12 months include compliance, contracts and corporate generalists, according to the ACC “CLO 2015 Survey.”
“In addition, CLOs frequently reported new positions in the practice area of privacy—a relatively new top hiring area this year,” Richardson said.
Companies are looking to their in-house lawyers to provide sound counsel and proactive strategy on cybersecurity, according to Richardson. The ACC research found that more than one in four CLOs reported their companies had experienced a data breach over the past two years. This was especially true for CLOs in the healthcare industry and in Canada, where 49 percent and 41 percent, respectively, reported breaches—well over the 27 percent of all CLOs.
Pay raises are average
Pay raises were average for in-house counsel, according to the Robert Half Legal “2015 Salary Guide.” The highest increase was 3.7 percent for counsel with 10 or more years at a mid-sized company, which has $25 million to $250 million in annual revenue. The salary range for this position is $143,500 to $225,000.
For in-house counsel with up to three years of experience at a small company (up to $25 million in revenue), pay rose 2.4 percent to a range of $81,500 to $109,250. The salary figures are based on a range of sources, “most notably the thousands of full-time, temporary and project placements that our staffing and recruiting professionals make each year,” according to Robert Half Legal.
The Robert Half Legal survey reports that corporate legal departments are expanding internal teams to handle more legal matters in-house and also to contain spending on outside counsel.
Organizations seek professionals with strong backgrounds in compliance, as well as corporate transactional law and contract administration, the guide found.
Instead of offering higher salaries, companies are offering more benefits, such as flexible scheduling, telecommuting and subsidized training, according to Robert Half Legal.
Companies want a business partner
Organizations are looking for corporate counsel who can facilitate the business process, according to Peters. Counsel should become familiar with what the company does, take an interest and act as a support, instead of simply focusing on the legalities of whatever is presented to them, she said.
For example, corporate counsel might tour the company’s plant and observe the manufacturing process to better understand how the company works, according to Peters. This might allow the lawyer to help get the product to market quicker. “It behooves the lawyer to be involved and become an integral part of the company. Partnering with the business, you add and keep value,”
The role of corporate counsel as business partner is a growing trend, according to Richardson. “The role of corporate counsel is certainly evolving in the organization—not only are in-house lawyers handling more substantive legal work in-house, but they are also increasingly driving corporate strategy,” Richardson said.
General counsel wear three distinct hats—leader of the legal department, counselor in chief and business strategist, according to Richardson.
“Corporate counsel, and especially in-house leaders (GCs and CLOs) are expected to spend much of their time contributing to enterprise strategy—it is the fastest-growing area of their responsibilities. By measuring the reporting structure for the CLO and GC position, it offers insight into the importance of the role as a member of executive management.,” Richardson said.
ACC survey of CLOs
The majority of CLOs in the ACC “Chief Legal Officers 2015 Survey” earn between $150,000 and $399,999. The survey includes responses from 1,289 CLOs in 46 countries. Overall, 26 percent of female CLOs said they earned less than $200,000 annually, versus 19 percent of men, according to the ACC survey.
By job function, an executive vice president tended to earn the most, with 76 percent reporting total compensation of $400,000 or more, according to the ACC survey (see Table 2). The title of counselor was the least likely to earn as much, with only 8 percent earning $400,000 or more.
Non-lawyering skills needed
Companies are also looking to develop “soft skills” in their in-house counsel, according to Richardson.
The ACC survey found that CLOs reported trying to develop non-legal skills such as executive presence, business management, as well as communications and project management skills.
“In fact, more than half of CLOs reported seeking to develop greater executive presence and business management skills within their law departments, cultivating a group of in-house counsel with business savvy and increased involvement in strategic discussions,” she said.
Being able to convey the information to the others is a vital skill that lawyers should have, according to Peters. “It’s important to be able to communicate with the top people, how to explain how to do things,” Peters said.
Global corporate counsel executives
The global business environment also drives the evolution of corporate counsel.
Businesses operate across more borders than ever before, so they have a heavier reliance on their in-house counsel to ensure compliance in multiple locations, according to Richardson.
Worldwide, 78 percent of CLOs report directly to their CEO, while another 20 percent report to the board of directors, according to ACC research.
“As trusted members of the C-suite, GCs and CLOs are therefore among the top officers at their companies and as such, would be among the most highly compensated executives in their organizations,” she said.
Top earners at large companies
Compensation for general counsel can run into the millions, according to a study, the “2015 GC Compensation Survey” from Corporate Counsel, an industry publication. Topping the list is Alan Braverman, The Walt Disney Co.’s general counsel, who pulled in $6,699,231 in total cash compensation, according to the survey, which was conducted by Corporate Counsel affiliate ALM Legal Intelligence and based on publicly available information found in 2014 proxy filings. The cash compensation data includes salary, bonus and nonequity incentive compensation.
Total compensation for Braverman includes a base salary of $1,374,231, plus a performance-based bonus of $5,325,000, according to General Counsel.
Among the best-paid 100 general counsel, average total cash compensation increased by 6.2 percent, to $2,095,191, which is a slight decline from the previous year, when it increased by 6.4 percent, according to the General Counsel study.
In-house salaries are on the rise
Base salaries for all levels of lawyers at in-house legal departments grew an average of about 3 percent, while total cash compensation is up an average of 5 percent, according to the “HBR Law Department Survey” from HBR Consulting.
The average base salary for in-house attorneys was $188,758, which is about 3.3 percent higher than last year’s amount, according to the HBR survey. The median salary for 2014 was $181,191, a 2.9 percent increase.
The average total compensation for all attorney levels was $316,636, which is a 6.4 percent jump when compared to 2013. The median total compensation for 2014 was $266,994. The study breaks down total compensation into base salaries, cash bonuses and long-term incentives, such as stock options.
Average cash bonus for all attorney levels was $67,014 this year. The median was $49,679. The HBR survey is based on 292 responses, with over 65 percent of participants at the Fortune
500 level or above.