In-House Counsel

New Study Shows In-House Law Costs on the Rise

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In September, we reported that the average pay of in-house attorneys was on the rise. At the time, we said:

Mock in-house counsel if you want to (and apparently many of you “want to”), but those jobs still pay great money. A new study says that the average pay for in-house attorneys is $236,000.

Yesterday, the Incisive Media group released a study showing the other side of the equation. The cost to run an in-house legal department has risen by ten percent over the past year.

The median internal cost of operating an in-house law department at a large company grew to $381,618 per lawyer, a 10 percent increase over the previous survey year, according to the 2008 Law Department Metrics Benchmarking Survey. Lawyer compensation and benefits, the biggest component of internal expenditures, was up 14 percent to a median of $356,205 per lawyer for these same law departments.

Great news, but are they hiring? More after the jump.


Unfortunately, while in-house jobs continue to pay great, they are also less filling. There are a lot of great resumes on the street right now, but companies aren’t hiring:

Almost half of the participating companies reported no increase in the size of their attorney staff during the survey period, while 30 percent said they hired only one additional lawyer.

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On the flip side, companies are still paying a lot of money to outside counsel. This should at least make law firm partners happy:

Median external expenditures for large companies were up significantly, from $616,519 to $705,270 per lawyer. Participating corporate law departments spent the highest percentage of outside counsel fees on litigation (37 percent), followed by intellectual property (15 percent) and mergers and acquisitions (12 percent).

And it’s not like those companies are rigorously judging the work product of outside counsel:

Only 32 percent of law departments reported that they formally evaluate law firm performance, up slightly from 30 percent in the previous year. For those companies that do evaluate law firms, the top three evaluation criteria remained unchanged: results, knowledge/experience and cost.

The relationship between in-house and outside counsel remains strong and mutually beneficial. It’s just harder and harder for young law firm associates to catch that wave.

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A full copy of the study can be purchased here.

Earlier: In-House: Still Great Money If You Can Get It

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