LEGAL
Tightened budgets and “doing more with less” seem to be the new normal for in-house counsel – so just how have those in the profession responded to this crunch? The Association of Corporate Counsel’s recent 2015 Global Census Report shows there have been some changes of opinion of the profession globally in the past decade as the times have changed, and provides a view into the current job satisfaction and mobility of this workforce. A few trends consistently emerged in this international view of in-house counsel, and Corporate Counsel Connect had the opportunity to speak with ACC’s own Vice President and Chief Legal Officer James (Jim) Merklinger for his insight regarding those findings.
Compensation variances – Worldwide, the majority of in-house counsel earn between purchasing power parity (PPP) of $100,000 and PPP $299,000, with the majority in the range of $150,000 to $199,000. Changes start to occur when looking at region and industry. According to the Census, in-house counsel in defense and pharmaceuticals earn the most, while those in research and development, trade associations, and education services earn the last. Taking into account the relative purchasing power of their currencies, in-house counsel in the Middle East/Northern Africa, Asia, and Sub-Saharan Africa earn the most.
There remains a significant difference in salaries between genders, however. “The Census showed that women were most likely to occupy the lowest salary categories, regardless of how long they had worked in their positions,” said Jim. Minority women make even less.
Following compensation dollars for a decade allows some unique insight. For example, more in-house counsel are reporting compensation of more than $300,000 in the past year (24 percent) than have for the past two iterations of the survey (19 percent in both 2006 and 2011). At the same time, remarkably, the number of those reporting the lowest compensation category increased as well, adding to the numbers of extremes on both ends of the spectrum.
Job satisfaction – “Moving in-house is enticing because it offers better work-life balance, as well as the opportunity to gain valuable insight into the company’s business objectives and operations,” explained Jim. Is this promise fulfilled? It may seem so, as most in-house counsel are satisfied with their jobs. The Census reported an overall job satisfaction rate of 80 percent, and only 8 percent said they were more satisfied working in a law firm as opposed to their current job in-house. “To that end, there has been a larger influx of lawyers making the move from firms to in-house departments, as they pursue the work-life balance and in-depth business knowledge that is offered by an in-house career,” Jim added. Furthermore, job satisfaction depends less on base salary and more on total compensation, including various perks that come with corporate over law firm work, including stock options and fewer working hours.
Mobility – While this group is generally satisfied with their jobs, in-house counsel tend to be a fairly mobile in regards to their careers. In fact, 64 percent would consider leaving their company if they had the chance to advance elsewhere, and 30 percent would leave for the right lateral move. This mobility extended from newer in-house counsel to those most senior. Younger lawyers were, in fact, more apt to stay in their current companies, while division counsel, managing lawyers, and deputy GCs/AGCs were most likely to move should the opportunity arise. Unsurprisingly, those who are being compensated at a higher rate are less likely to leave their positions.
Forty-two percent of in-house counsel respondents anticipated a promotion soon at their current company, with this percentage even higher in Asia (62 percent) and Latin America (58 percent). Overall, those under the age of 35 were more optimistic about an upcoming promotion than those more tenured lawyers. As for the progression of those senior lawyers, 12 percent of respondents look to retire within the coming decade.
Diversity – “Legal departments around the world are undergoing demographic shifts and becoming increasingly diverse as it relates to gender, age, and geographic representation,” explained Jim. The number of women in-house has increased over the last five years, from entry level to the CLO position, now at nearly a 50-50 gender split. “In-house counsel can utilize this data to benchmark with their peers on these kinds of diversity shifts,” Jim says.
Becoming global – Increasingly important to all in-house counsel is an understanding of working internationally. While 62 percent of lawyers now have cross-border work, Jim explained, “one in five in-house counsel reported that at least half their work was multinational or cross-border." According to the Census, real estate, biotechnology, and telecommunications were the industries with the highest percentage of cross-border work, and in-house counsel working throughout Europe (86 percent) and Asia Pacific (82 percent) topped the list of regions reporting a high amount of global duties. As could be expected, larger organizations have more cross-border responsibilities, with 71 percent of in-house counsel in the largest companies working globally, compared to just 44 percent at those companies with fewer than 100 employees.
Regardless of company size or region, a solid understanding of international issues will be necessary as this trend is sure to continue in the coming decade. Jim says, “A number of jurisdictions are expanding non-U.S. in-house counsel practice. Also important, general counsel are satisfied with their ability to rotate their non-U.S. in-house counsel from their field offices, and the legal profession will benefit from the cross-pollination of legal talent from across the globe.” Jim concluded, “From compliance and risk management to data breaches and globalization, the next 10 years will add a layer of new issues to existing challenges. Leading GCs and CLOs will understand that these challenges are not going away.”
As young lawyers join legal departments, senior lawyers retire, and the department diversity shifts, it is important to always keep in mind the challenges the profession is facing and staff appropriately. Jim concluded, “From compliance and risk management to data breaches and globalization, the next 10 years will add a layer of new issues to existing challenges. Leading GCs and CLOs will understand that these challenges are not going away.”
View for more findings from the 2015 ACC Global Census in the January issue of Corporate Counsel Connect, focusing on moving work in-house and building efficiencies.
Download the executive summary of the 2015 ACC Global Census now.
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