Biglaw, Bonuses, General Counsel, In-House Counsel, Money

In Defense of In-House Counsel Compensation

Lawyers often think that leaving a law firm to go in-house involves a pay cut. Think again....

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As regular readers of Above the Law know, we offer a wealth of content for in-house counsel. We have three in-house lawyers at major corporations who write columns for us — Mark Herrmann, Susan Moon, and David Mowry — and we supplement their coverage with additional in-house posts by our other writers.

One subject that our columnists tend to shy away from, for understandable reasons, is that of in-house compensation. They’ve written in general terms about comp issues, but they haven’t, say, divulged hard numbers about how much they earn.

But one of our in-house readers reached out to us and did exactly that. Let’s find out how much this person makes. The claim: in-house lawyers are better paid than you might expect….

If you are the general counsel of a Fortune 500 company, you will do very well for yourself. If you doubt that, look back at our prior stories on America’s best-paid general counsel and median compensation for Fortune 1000 GCs.

Regarding corporate counsel who are not at GC or CLO level, however, the general perception is that they don’t make the Biglaw bucks. Their jobs may have other advantages, such as better work-life balance or exposure to the business side, but conventional wisdom holds that pay is not one of them.

Is conventional wisdom wrong? That’s the position of one in-house reader we recently heard from. Is this individual an outlier, or are highly paid in-house lawyers more common than one might think?

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We’ve reprinted the in-house lawyer’s email below. Feel free to discuss, in the comments, or email us, subject line “In-House Compensation,” if you’d like to share your own story.

(We have written more systematically about compensation for in-house lawyers below the GC level, but it has been a while. See our December 2011 story on in-house compensation, which contains median salary data for corporate counsel at varying levels of seniority.)

MESSAGE FROM AN IN-HOUSE READER

I’ve followed your site since its inception. A consistent theme in a lot of the messages is that Biglaw pays better but in-house counsel have greater rewards when it comes to work-life balance. As someone who has made the move from a top firm to a big corporation, I can tell you this is an incorrect view.

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I spent over eight years at a top 10 firm as an associate. I made a top market salary and collected the market bonus each year. I was making $285k per year when I left the firm.

I’ve been at a corporation for a little over two years now. First, I should note that my new in-house role is in a smaller market where the cost of living is significantly less. It is true that my base salary at the corporation is less ($250k per year). However, to help recruit me, the corporation provided a signing bonus and relocation package that totaled over $150k. Even putting aside those one-time benefits, here is a look at my complete annual compensation package at the corporation:

Salary: $250k
Stock Grants: Variable, but the past two years, I’ve received over $100k per year
401(k): Matching up to 6% contribution
Cash Bonus: Variable, but I average $80k per year for the last two years
Pension: Upon retirement, I have a pension (a very nice one)

Yes, partners at law firms will likely make more than in-house attorneys. However, in house attorneys do better than most associates and counsel, and even many partners. My 401(k) after 8 years at a firm was only $165k. My retirement savings from the corporation (including 401k, pension, and stocks) are valued over $300k in just two years. The $35k I gave up in my base salary to make this move has paid dividends in deferred compensation, bonuses, and cost of living.

I thought I was applying for in-house jobs to achieve a better work-life balance. No one told me I would be making more money than my friends who stayed at the firm and continue to work long hours and weekends waiting for the annual bonus memo to be leaked to ATL.

UPDATE (4/4/2013, 1:35 p.m.): Here are David Mowry’s thoughts on this compensation package.

Earlier: Who Are America’s Best-Paid General Counsel? (2012 Rankings)
Your Job May Keep You Up At Night, But It Really Pays To Be General Counsel
Career Center: 2011 In-House Salaries Are On The Upswing

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