Over the weekend, the New York Times had an interesting article about compensation for Wall Street bankers. The article explained how, due to criticism from the public and from Congress, banks shifted employee comp away from cash and towards stocks and options. This shift was supposed to align pay with performance, averting an AIG situation of rewarding failure.

Now, thanks to the recovery in bank shares — fueled in part by generous government bailouts, and not necessarily the brilliant performance of bank employees — these stock and option grants are turning out to be super-lucrative. Here’s an interesting excerpt:

Goldman Sachs, for instance, sharply cut nearly all bonuses it paid last year but gave some executives more options than usual.

The company gave its general counsel, for example, 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78.

Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million, according to Equilar, an executive compensation research firm in Redwood Shores, Calif.

Sullivan & Cromwell partners, eat your hearts out. Not only does Goldman GC Gregory Palm get to boss you around, he also makes more money than you do.

Way more. Get a hint of how much, after the jump.

Faithful Coca-Cola drinkers can laugh about this one. PepsiCo is having a rough month, reports the National Law Journal. PepsiCo’s purified water brand, Aquafina, has cost it a pretty penny.

Charles Joyce and James Voigt of Wisconsin sued PepsiCo earlier this year for stealing their idea of bottling and selling purified water. They claim that they had confidential discussions with distributors about the idea in 1981 and that the distributors passed those trade secrets along to Pepsi. It sounds like a bit of a ridiculous lawsuit; PepsiCo calls their accusations “dubious.”

But the Wisconsin men won. They won big. They won $1.26 billion dollars.

How did they win? By default judgment. PepsiCo’s lawyers never responded to the complaint, and the judge awarded the Wisconsin plaintiffs a default judgment.

Why did the Pepsi people never respond? Meet PepsiCo legal secretary, Kathy Henry.

The last couple Jobs of the Week have featured positions with AmLaw 100 firms on the East Coast and West Coast. We feel that we may be neglecting those of you in the middle of country, and since the hiring freeze is starting to lift at some companies, we decided to offer up an in-house position in Ohio for the Job of the Week, which is brought to you by Lateral Link.

Title: Corporate Counsel

Location: Cincinnati, OH

Description: Bank holding company with more than 1,200 branches in the Midwest and Southeast is seeking several attorneys with corporate experience to join their in-house team. Attorneys with experience in one of the following areas will be considered - general corporate (2-6 years), commercial creditors’ rights (5-15 years), bank regulation (4-8 years) and consumer regulatory (2-6 years). Candidates should have significant experience with a law firm or corporation in the relevant areas of expertise. Ability to interface successfully with senior management. Knowledge of the areas of expertise including technical knowledge. Good issue spotting, risk assessment, and problem solving skills.

For more information about each position, please view Positions #5458, #5457, #5456, #5455 on Lateral Link.  Membership in Lateral Link is free and you can apply at www.laterallink.com.

Earlier: Prior Job of the Week listings

Corporations are so busy reducing the amount of money they spend on outside counsel that it’s easy to overlook the fact that they are also reducing the money they spend on in-house counsel. Well, it’s easy to overlook the fact if you are not in-house.

But a new survey reports that in-house lawyers are feeling the salary pinch along with their firm-based colleagues. The ABA Journal reports:

Lauren Chung, director of the Hildebrandt survey, told the ABA Journal that the frugal approach extends to compensation for in-house lawyers.

“Do I think that lawyers overall are making less?” Chung said. “They’re not getting the increases that they had been enjoying for the past several years. Every year they were almost guaranteed an increase. This year we see very clearly that is not the norm anymore.”

Of course, in-house lawyers aren’t exactly crying poverty. Their salary, even without the yearly raise, is still pretty good.

Check out just how good it is after the jump.

Do you have any friends who used to work with you at your Biglaw firm before moving on to a sweet in-house position? Do you complain to them about the financial problems at your firm?

If so, you should probably stop — because your colleagues turned clients really do not care about your problems. Bisnow hosted a conference about the future of the billable hour (gavel bang: ABA Journal). Washingtonian reports:

Michael Helfer, general counsel of CitiGroup and a panelist at the Bisnow event, put it bluntly when he said CitiGroup’s inhouse legal department has been reduced during the past few years by nearly 300 employees, many of whom were laid off. The lawyers who are left have had their compensation slashed by as much as 60 percent. Helfer says he’s consequently lost his patience for paying his company’s outside lawyers premium fees. “The amount of sympathy I have for the argument that $1,000 an hour is a reasonable rate … is nil.”

This is why firms like O’Melveny are putting together five-year strategic plans that contemplate alternative billing structures. But will these new fee arrangements still lead to enormous profits? Some D.C. details, after the jump.

We’re having a pretty gay Monday here at Above the Law. Earlier today, we discussed which top law firms won recognition from the Human Rights Campaign for being LGBT-friendly.

Perhaps we’ll still recovering from the weekend. As we mentioned before, we spent part of it attending the excellent Lavender Law conference, over in Brooklyn (just a short subway ride away from the ATL offices in Soho). In case you’re not familiar with the conference, here’s some background:

Every year, the sharpest legal minds in the lesbian, gay, bisexual and transgender (LGBT) community gather at the National LGBT Bar Association’s annual conference and career fair.

Hundreds of practicing attorneys, dozens of scholars, over 500 students and many leading members of the judiciary are expected to attend over the course of this year’s events.

We moderated a panel on Saturday, focused on federal courts and LGBT equality, and we attended several other panels and workshops. We’ll be writing a bit about the conference proceedings.

Our first conference write-up — discussing the workshop Coming Out in the Profession: “But What Will the Clients Think?”, which may interest young LGBT attorneys — appears after the jump.

If some law firms are not willing to invite members of the class of 2010 to work for them over the summer, why should banks?

We just received word that Citigroup has decided to cancel its 2010 Summer Program for 2L summer associates. A tipster sent us this email that students at Penn Law School received this morning:

Dear Students,

I regret to inform you that Citigroup is not having a summer class for the Summer of 2010 and has cancelled all of it on campus interviews. Your bid will not be lost as we will consolidate it before we process the interview schedules. I apologize for any inconvenience this cancellation may cause you. Please do not hesitate to contact me if you need further assistance.

All the best,

Did you know that Citigroup got legal talent fresh off of the law school tree? Well, they don’t anymore.

Let’s look at what the program used to be after the jump.

With the Fourth of July falling on a Saturday this year, it pains us to contemplate all the tacky red-white-and-blue themed weddings that will be taking place tomorrow in VFW halls across this great nation. Please, people: A little bunting goes a long way. And it should never go on the bridesmaids.

But we’ll tackle the Independence Day weddings next week. Today, we’ve got the last batch of June weddings. Here are the finalists:

1. Heidi Lee and Steven Hwang

2. Ahsaki Benion and Richard Habersham II

3. Kristin Campbell and Robert Samuelson

Read more about these newlyweds, after the jump.

An underreported aspect to all of the mass layoffs affecting the legal industry is the plight of in-house counsel. The day after Lehman folded, we wondered if the collapse meant the closing of a popular Biglaw exit option.

We all know that banks and other financial services institutions are laying off tons of employees. In-house attorneys are far from immune to these reductions.

But in-house lawyers also get laid off when banks merge and two legal departments have to be downsized into one. It happened when JPMorgan Chase acquired Bear Stearns. It happened when Bank of America swallowed Merrill Lynch.

And it looks like lawyer layoffs will be a negative externality of Wells Fargo’s merger with Wachovia. A tipster reports:

[Wells Fargo] is moving forward with a 15-20% across the board layoff in the law department (the new combined law department; WF and Wachovia). Layoffs will start as early as next week through June 1st…. Internal meetings with all employees in the department have already taken place.

After the jump, a Wells Fargo spokesperson responds to these reports.

The American Bar Foundation has been tracking the careers of almost 5,000 law grads for a project called After The JD. The $1.8 million study keeps the lab rats law grads from the class of 2000 under a microscope for 12 years after graduation to track the development of their careers, relationships, and basic ability to run the maze that is life in the law.

The ABA Journal reports that a survey of the group found that a whopping 76% were “either extremely or moderately satisfied with their decision to become an attorney.”

That’s a good amount of satisfaction. But does it mean that one in four is miserable about having become an attorney? And the ABA Journal says the interviews for the survey were conducted in 2007. With the recent turmoil in the industry, we wonder if those results hold up. How’s your satisfaction these days?

More intel on the class of 2000 (and the migration away from Biglaw), after the jump.

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.

Does anybody else think that the new President will enact new corporate regulations? Corporate counsel think that regardless of the winner this November, labor and employment regulation will increase.

The National Law Journal reports:

According to a recent survey of nearly 400 corporate counsel, six out of 10 corporate counsel expect this year’s presidential election to affect labor and employment laws at their companies.

You think? A brief perusal of McCain’s post meltdown statements reveals that he is now for more regulation. Meanwhile, Obama is a Democrat which means it’s entirely possible that his administration will regulate employee access to the executive bathroom:

Among the potential changes cited by the respondents were increased costs for health benefits and mandatory paid sick days; a resurgence of workplace regulation generally; and passage of the Employee Free Choice Act, which would eliminate secret ballots in union organizing drives and strengthen labor’s hand in negotiations over union representation.

Great. We all know how much corporate counsel love unions.

Other corporate counsel concerns after the jump.

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.

Maybe that is what CNBC was talking about when they promised aspiring law grads $200K salaries.

The numbers were even better at the top. According to the ABA Journal:

The average cash compensation, including bonuses, amounts to about $700,000 for general counsel and more than $900,000 for chief legal officers, according to a survey by the legal consulting firm Hildebrandt International. Long-term incentives increased the average total compensation to nearly $1.5 million for general counsel and nearly $2 million for chief legal officers, according to a press release summarizing the survey.

It seems that even as companies are shedding in-house counsel jobs, the attorneys that hang on are making good money.

Unfortunately for those working for law firms, corporations might look to save money by decreasing their reliance on outside counsel. The National Law Journal reports:

Most companies — 67% — said they expect no change in the number of law firms they plan to use in 2008, but nearly a third — 29% — said they anticipate decreasing that number.

The report doesn’t contain an analysis of the hours in-house counsel have to work for their salary. But law firm associates usually cannot claim that they work less than their in-house counterparts.

So while the jobs might be harder than ever to get, in-house still seems to be a great exit option. Unless you were in-house at: Bear, Lehman, WaMu, AIG, or whichever company spits the bit next.

Average Pay is Up In-House Lawyers, as their Numbers Dwindle [ABA Journal]
Global corporations slowing their spending on legal fees, study finds [National Law Journal]

Earlier: Open Thread: Is In-House Still Worth It?

A few days ago, we asked whether going in-house was still a viable option for Biglaw associates. Today we look at whether those who leave can ever come back.

The National Law Journal did a follow-up piece on Bear Stearns attorneys who weren’t able to move over to JP Morgan after the merger. They report (subscription):

Many refugees from Bear Stearns have landed at law firms, including Bingham McCutchen; Venable; Weil, Gotshal & Manges; K&L Gates; and Katten Muchin Rosenman.

“It’s like a port in the storm right now,” said one former Bear Stearns attorney who has landed at a law firm and asked not to be identified.

But as one commenter points out, moving back into Biglaw isn’t easy:

To get back in to BigLaw from most in-house positions is extremely difficult. If you work in a niche, like government contracts or FDA, it improves your chances significantly. However, if you are just a general corporate attorney at a company and are looking to get back in a firm, there’s little shot.

Going back to the firm will likely get even more difficult as additional attorneys from Lehman and Merrill Lynch flood the midlevel market. But we can expect that displaced in-house counsel will try to get back into Biglaw, because in this market, “job security” is the Holy Grail.

Do law firms actually provide a “safer” alternative? After the jump.

It wasn’t long ago that both associates and partners regarded moving in-house as a “golden ticket.” Better hours, comparable pay, and a sweet “Executive Vice-President” title.

Now? Ask former firm lawyers who went over to Bear Stearns, Lehman, Merrill, or WaMu how their new gigs are working out. For that matter, ask attorneys at JPMorgan Chase, BoA, or Barclays how secure they feel about their jobs.

As financial services firms break up and merge, what happens to the in-house attorneys caught up in the mix?

Much of the value from in-house counsel comes from keeping as much work off the big firm plate as possible. It’s a volume business. When trading is tepid and profits non-existent, businesspeople often turn a greedy eye to in-house attorney salaries. Remember, it’s not like the businesspeople really like the lawyers hanging around anyway. It’s more of a “you want me on that wall, you need me on that wall” type of situation.

But should an in-house attorney get laid off, how easy is it for them to get back into the Biglaw pipeline? Are firms going to be interested in hiring corporate attorneys with years of expertise in business platforms that are no longer viable?

If you can’t go in-house, what exit options remain for Biglaw corporate associates? Litigators can always go litigate somewhere. There are lots of frivolous lawsuits just begging to be filed (and defended against). But for corporate attorneys, are you better off just keeping your head down and doing your best to ride out the storm?

Alternative career resolution ideas are welcome in the comments.

We received 1,186 responses to last week’s ATL / Lateral Link survey on whether you’d like to go in-house, which is about 100 more than we received in February.

Overall, almost a quarter of respondents who are currently at firms said they would like to go in-house “as soon as possible.” This is a pretty big jump from February, when about a third of respondents weren’t sure whether they would ever want to work in-house, and only about 13% wanted to get there ASAP.

Another 35% of respondents think they would like to go in-house “eventually,” which is actually slightly lower than what we found in February.

The number of respondents who weren’t sure, however, dropped from roughly a third to just under 21%.

More detailed data and discussion, after the jump.

Back in February, we found that about 13% of associates would like to go in-house “as soon as possible,” and another 38% hoped to do it “eventually.”

Hours were, by far, the most cited reason for associates to go in-house:

  • Over 82% percent of associates viewed the lack of billable hours as a tempting aspect of in-house life.
  • Better hours and better quality of life were also each cited by almost 80% of associates.
  • Almost a third of associates liked the idea of “being part of the company”, and about a quarter thought that the ability to work with just one client was appealing.
  • Only twelve percent of associates thought that in-house work would be more interesting, and less than nine percent expected better pay.

With transactional work continuing to slow down, today’s ATL / Lateral Link survey asks whether things have changed.

Are you more eager to go in-house today, or do you think that the cat picture to the right pretty much sums it up?

Update: This survey is now closed. Click here for the results.

—
Justin Bernold is a Director at Lateral Link, the sponsor of this survey.

We tend to emphasize Biglaw over the in-house world here at ATL. When we do talk about in-house lawyers, it’s often in the context of their complaining about the legal bills they get from large law firms — and how much first- and second-year associates earn these days, despite being short on knowledge and experience.

But don’t shed tears for chief legal officers, general counsels, and the in-house lawyers who work under them. As shown in our latest batch of survey results, they’re very happy with their jobs.

Part of that happiness may stem from their compensation. Check out this Inside Counsel report (PDF) on in-house compensation, or this Legal Blog Watch summary of the report. While they may make less than their counterparts in large law firms, they’re still doing very well for themselves.

For GCs’ Salaries, Survey Says: Ka-ching! [Legal Blog Watch]
Payday: How does your compensation compare? [InsideCounsel]
Payday: Full Report (PDF) [Inside Counsel]

Earlier: Featured Job Survey: Does the In-House Always Win?

Earlier this week, we told you about client contact, and asked you about your firm’s leave policies (that survey’s still live, by the way). In today’s ATL / Lateral Link survey, we explore whether you’d like to leave your firm to become a client:

Update: This survey is now closed. Click here for the results.

—
Justin Bernold is a Director at Lateral Link, the sponsor of this survey.

We apologize if we seem a little fixated on Atlanta these days. They seem to have a lot going on down there (even though it’s not all good).

From the Fulton County Daily Report (which we’ve been reading a lot lately, despite that obscure-sounding name):

Horace “Hod” Nalle has been general counsel for Merial, a Duluth-based worldwide animal health pharmaceutical producer and marketer, since the company’s inception in 1997. But Nalle hasn’t had an active legal license since 2000, when he asked the State Bar of Pennsylvania to move him to inactive status. This year, he drew attention to his situation when he applied to return to active status — a request that is pending in Pennsylvania.

Speaking to the Fulton County Daily Report, Nalle said he has done nothing wrong and that the problem — one agreed upon by legal ethics professors and the general counsel of Georgia’s bar — is how to distinguish between legal and business advice.

Excuse us for thinking that a general counsel provides legal advice — i.e., counsel.

[Nalle] said the only legal advice he may have given would have been for his own company. “There is no injury. There is no injured party,” Nalle said.

Well, okay, assuming Nalle hasn’t given bad legal advice. But under that reasoning, does that mean that practicing lawyers don’t have to be admitted in the jurisdiction(s) in which they practice, as long as they don’t commit malpractice?

We have a solution. If he’s maintaining that he’s not giving legal advice (except beyond some de minimis level), why doesn’t Nalle just change his title to “General Counselor”? Like Dan Bartlett, former Counselor to the President, who is not a lawyer (unlike Fred Fielding, White House Counsel).

Or maybe the best comparison is to being a high school guidance counselor. They don’t give legal advice, right?

GC Without a Bar License Defends His Status [Fulton County Daily Report]