2012 In-House Report: Salaries & Hiring Trends
InsideCounsel has released its hugely popular “2012 in-house compensation report,” discussing compensation, the hiring forecast, hot trends, and what it takes to land an in-house position, and how to succeed as in-house attorney.
Companies Are Hiring, But Selectively
The good news is that companies are hiring, the bad news is that they are only doing so very selectively. With the economy finally on the upswing, law departments are looking to hire new help. But experts caution that companies aren’t necessarily hiring attorneys.
The bulk of the hiring seems to be dedicated to paralegals and contract managers. When it comes to hiring attorneys, the numbers are still very low, and the competition very stiff.
Who’s Getting Hired: Standout Experienced Business Lawyers
Companies are most interested in mid-level and senior lawyers with four to nine years of experience. Additionally, they’re seeking jack-of-all-trades attorneys who can work independently.
Being a lawyer that delivers high quality services is no longer enough to land an in-house job. Today, lawyers hoping to get hired by a company need to show that they understand the company’s business and can contribute to its bottom line.
A law degree might no longer be enough. Today’s, in-house lawyers have to understand financials, business strategies, and need to be able to wisely manage projects and budgets. Many are now armed with M.B.A.’s to deliver just that.
One thing is clear: As companies emerge from the recession and slowly increase their legal hiring, attorneys searching for new careers must stand out among the competition. That often means being armed with more than legal excellence to do so.
Advice to Young Law Grads: Start with a Firm and Network.
The vast majority of corporate legal departments are still steering clear of recent law graduated. What can a recent law graduate do to improve his or her chances at landing in-house? The solution: try your hand at a law firm position first, focus on transactional work, stay there for at least five years, and network aggressively.
Base Salaries Slightly Up by 3.3%
2011 has brought moderate increase in in-house base salaries. According to the 2011 HBR Law Department Survey, the average base salary increase among all legal department staff levels in 2011 was 3.3 percent, up from an average increase of 2.6 percent in 2010.
The Bonus Is the New Gravy
The 2011 HBR Law Department Survey found that the average bonus increase among attorneys was an astounding 25.7 percent. The average cash bonus for all attorney levels was $67,000? What does it take to earn those bonuses? Today’s in-house lawyers are held accountable for the level of performance and their contribution to the bottom line. By the same token, they’re asked to share the risk of their companies’ performance. So, in-house lawyers have to meet their objectives, and contribute to the company’s bottom line to expect to get some gravy on top of base.
What’s Hot: Management Skills, IP, M&A and Compliance
The most in-demand practice areas: transactional (M&A), IP, labor and employment, and compliance. In terms of industries, health care and pharmaceutical are generally offering higher salaries.
The hottest skills required from in-house lawyers aside for outstanding legal and business skills, are management skills. Knowing how to manage projects, people, and budgets is key to increasing one’s value in-house.
Trends of the Future: International Expansion and E-Discovery
As companies are pushing for international expansion as a competitive strategy to expand their core business and increase their market share, so are corporate legal departments. Today, many clients are looking to hire in-house attorneys for their international operations, with a focus on Asia, South America, and India.
E-discovery is also very much in-demand. Companies are looking for lawyers who can effectively manage e-discovery and document review with a smart process that saves money.
What can we take away from this report? Lawyers with any hopes to succeed in-house need to be able to bring value beyond outstanding legal skills and experience. Contribution to the bottom line is what it’s all about.
In-House Legal Department Predictions for 2012
The good news for in-house lawyers in 2011 was that there were raises for base salaries and a slight uptick in hiring. The bad news is that those improvements were relative. Base salary raises were very slight compared to the rate of inflation,. They also came after several years of salary freezes. Bonuses did offset some of these lackluster base salary numbers, but being tied to company performance, not everyone enjoyed them.
The uptick in employment did not stem from the creation of new positions per se, but rather as an effort to replace departing attorneys and rebalance overworked corporate legal departments that had suffered heavy layoffs during the Great Recession. In other words, the number of available in-house attorney positions remained quite low. On the other hands, there was some positive movement out there, which we expect to continue in 2012.
What Will In-House Legal Hiring Look Like in 2012?
The hiring trend that we identified in 2011 by corporate legal departments is likely to continue in 2012. The good news is that corporate legal departments are planning to hire in 2012 – about 40%. The bad news is that the majority of the hires will not be full-time attorneys.
Corporate legal departments are dealing with a heavier workload in part by using more paralegals and contract lawyers. About 67 per cent of corporate legal departments are comprised of lawyers with the rest made up of paralegals and other support staff. Legal departments are still operating with flat or decreasing budgets, and therefore, they are seeking the highest level of competency at the lowest cost. Compliance and contract review has been increasingly delegated to paralegals and contract managers. In other words, corporate legal departments are hiring more "staff" rather than "lawyers" in an effort to improve efficiency rather than “bulk up.”
What Are Corporate Legal Departments Looking for?
Corporate legal departments that are hiring full-time lawyers are doing so primarily to replace departing lawyers or add a specialty to handle work in a growing area. While corporate legal departments may be conducting some hiring, they are definitely looking for “more bang for their buck.” What exactly are they looking for?
Corporate legal departments are looking for experienced (5-10years) all-around corporate lawyers with a broad legal background, strong business acumen, and proven management skills. And that’s just the tip of the iceberg. Factors that are also taken into consideration includes national law firm background, few transitions, specific industry experience, and proven in-house track record of success.
The ideal candidate is a businessman who happens to be a lawyer, not the other way around. This is in response by corporate legal departments to want to demonstrate to the C-suite that they have what it takes to handle legal matters in a manner that contributes to the bottom line. Today's in-house attorney has to be packed with achievements that show how he/she can contribute to the company's bottom line; being an excellent lawyer is simply not enough.
What Are In-Demand Practice Areas?
General Business/Corporate Law (M&A a Plus) – Attorneys that can handle a company’s various transactions, regulatory and compliance matters, while understanding the business, and managing internal and external counsels, are the most in-demand. Attorneys with all of the above, and a strong M&A background are also prized.
IP/Licensing – The wave of protection for innovation that was driven by the Great Recession continues. As a result, licensing is a very hot in-house practic. An increase in patent prosecution has also heightened the need for attorneys with experience in trademarks and patents.
Contracts & Compliance – Corporate legal departments have an ongoing need for support to handle contracts and licensing. They are increasingly hiring contract administrators to manage procurement issues, and paralegals for compliance issues. There are some attorney-level hires, but these tend to be contract attorneys or contract administrators with a law degree.
International – As companies look to focus on expanding their core businesses and increase their market share, they are likely to look outside of the U.S. as part of their competitive strategy. This will drive the international law practice. U.S. companies will continue to look opportunities in the three most popular emerging markets—Brazil, India and China. Some other markets that may generate some new and renewed interest may include Mexico, Vietnam, Korea and the Middle East, with Turkey, Saudi Arabia, and the United Arab Emirates as attracting most of the attention. This boost in international transactions will come primarily from companies in the consumer and infrastructure sector seeking to expand into new markets.
What Will Compensation Look Like in 2012?
Total compensation for in-house counsel will most likely continue to rise, albeit modestly in 2012.
Base salaries will see moderate increases (around 3%). Raises will be primarily reserved for in-house attorneys that bring something unique and/or can save money by managing projects, people, and budgets. In other words, senior lawyers (10+ years) with management responsibilities at publicly trade companies, and specialty area lawyers (healthcare, patent, IP, etc.), will enjoy higher compensation levels.
Average In-House Attorney Compensation:
4-9 years = $100K-$180K
10+ years= $130K-$220K
Bonuses are where the difference will be made up.
Gone are the days of earning a bonus at your boss’ discretion. Today’s in-house counsel bonus is driven by: individual performance and company performance. In-house lawyers are held accountable for their contributions to the bottom-line, and are asked to share the risk of their company’s performance. If the economy continues to improve in 2012, and companies perform well enough to be able to share the rewards, then bonuses will continue to rise.
What Else Could You See in Your Stocking for 2012?
Companies are reticent about reaching into their pockets to offer more cash up front in the form of salaries. They want to see a return on their investment. That said, for hard-to-find candidates and performers – there are making efforts, if not with cash, by offering other incentives that include:
• Telecommuting
• Flexible Hours
• More Vacation Time
The Bottom Line
Hiring will still be very tight for 2012, but we will continue to see some improvements. Performance-based compensation is also here to stay. This is still driven by the economy, and while we have been through the worst since 2007, we have not quite gotten back on track yet. Our economy is still very unpredictable and fragile. Companies are hoping for the best, but still preparing for the worst. Most organizations are remaining conservative regarding their fixed costs, including their salary expense. Therefore, this will continue to make for a sluggish hiring market. We may see some small increases in base salary if the economy continues to slowly gather momentum. At the end of the day, much of the growth will be in bonuses. Hiring will focus on staff that can handle more commoditized work, and experienced management-level corporate attorney and specialists.
In Search of That In-House Spot? Some Words of Advice.
If you are in private practice, either as an associate or a partner at a law firm, you’ve probably wondered at one time or another what it might be like to go in-house. You may have envisioned a world without billable requirements, business development, free weekends, and possibly less stress. Perhaps you are intrigued by the prospect of working with a single client, knowing where the work will come next, and have an interest in being viewed more a business partner, and less as a fire extinguisher. The grass being “greener” on the other side is not necessarily a reality. In fact, the reality often looks quite different. But when it comes to going in-house, law firm attorney seem convinced that this is a better way to practice law, and whether that’s true for most, the in-house call remains irresistible.
Since the recession, the legal market has never quite bounced back. Talk of signs of improvements in hiring and compensation are true, but it is also relative. We experienced one of the most massive and deepest bloodletting the legal market has ever experienced. Therefore, while the legal market may no longer be hemorrhaging, it’s not exactly thriving either.
We never completely reabsorbed the thousands of attorneys who were laid off because of the recession; not to mention scores of others who were unsatisfied with their current jobs but held off by their skin of their teeth to ward off the specter of long-term unemployment; as well as those near retirement who saw their life savings dwindle and decided to stay on in the hopes of replenishing their nest egg. Of course, that does not account for the perfectly happy law firm attorneys with dreams of going in-house, or in-house attorneys looking for a raise, advance, or simply a change. That’s quite a crowd!
To say that today's market for in-house jobs is extremely competitive is an understatement at best. The number of applicants for each in-house position can often run into the hundreds, if not more, and employers have the luxury of being able to wait for the perfect candidate – and sometimes the “impossible to find dream candidate.” Finding an in-house job in this legal market can be quite a challenge.
Our firm handles hundreds of in-house searches each year, ranging from general counsel positions with Fortune 100 companies to junior lawyer positions with small, privately held companies. We speak with thousands of lawyers each month, and scores of corporate legal employers. We have a pretty good sense of the trends and general state of the in-house legal market. If the desire to move in-house has not dampened, the success rate on the other hands has dipped.
If you are still convinced that going in-house is the right move for you, let me offer some advice and a few things to consider as you begin your search.
The Road In-House Is a Long And Tedious One
When you are starting to put a resume out there, the first question you might have is, how long is it going to take me to find an in-house job? The obvious answer will be, it depends. Factor that affect how long a job search will have has to do with the applicant’s specific experience, background, financial flexibility, geography and willingness to relocate, and the type of positions he/she is seeking. If you are looking for a GC-level position with a publicly traded Fortune 500 company – the wait might as long as winning the lottery. That said, a good rule of thumb is anywhere between six months to a year, and in many cases a lot more.
Why the long wait? It’s a simple economic formula or supply and demand. Very little demand and a whole lot of supply equal a long road to success. Also, unlike law firms, which are very "flat" organizations, corporate legal departments are typically pyramidal. Therefore, the higher the level, the fewer jobs there are available. Of course, not all candidates are created equals, so the more exceptional the background and experience, and the more flexible the candidate, the shorter the road. Then again, a road that can take anywhere between six months to a year, it not what I would necessarily call short.
Why are there so few in-house legal positions? While the state of economy provides part of the answer, the other has to do with the manner in which corporate legal departments are structured. Unlike in the law firms that are always looking for opportunities to hire lawyers that will improve their bottom line or service their clients, corporations are not often looking to add great legal talent. Whereas law firm lawyers are valued for bringing in business and generating income, in-house lawyers at corporations are viewed as part of the overhead. Rather than generate profit, they tend to cost money. Therefore, corporations have to do a cost-value analysis whenever they are considering adding a legal professional. That analysis has certainly been a lot more stringent as corporate legal departments have to do more with less, which also means fewer people.
Fortunately, the push of companies to save money has also forced them to rely less on expensive outside counsel, and more on their in-house legal departments. This has translated in some hiring efforts by companies; however, hiring has been very selective, and attorneys have been stretched to do more. Therefore, while you may feel that your legal expertise is exceptional, if the corporation already has someone else handling those responsibilities in a capable manner, there is little upside to having two people handle the same tasks. You have to be the right person, at the right place, and at the right time.
Recruiting Firms are Not Job Placement Firms
When there are so few positions advertised, it’s easy to understand why candidates decide to work with legal recruiters. However, before you send that resume or make that phone call, you should understand the advantages and limitations of working with legal recruiters. For example, the in-house searches that our firm agrees to undertake are done on an exclusive basis, which is the case for most other legal search firms. This means that our firm is the only search firm being engaged to fill the position and that the company will not accept resume from any other search firm. This means two things: Our client list is unique to us, and we only present candidates to our clients to fill a specific job opening.
In the in-house context, a search firm is not a placement firm. We are hired only to fill those in-house jobs for which we have been retained. Companies generally don't want search firms to send on resume unless the company has already identified a new need and asked the search firm to assist it with the search. So although you may be an exceptional candidate, a search firm is typically constrained by the companies that have engaged it to conduct searches for them.
Finally, because our clients retain us, the positions we are working on do not represent all of the in-house opportunities that are available out. Therefore, reaching out to just one search firm isn't enough for those people looking to go in house. Applicants instead need to find out who handles the in-house searches in their market and reach out to all of them. If the applicant is seeking a law position, my advice is the opposite. That candidate should only pick one recruiter to represent him or her.
What’s the greatest tool for finding a new in-house job? Your connections. In other words, you have to network and let people know you're looking. While there might be some risk of your boss or colleagues ultimately finding out, we think that the benefits to networking far outweigh those risks. Networking is the most effective way to get leads and land an in-house job.
If I had a dollar for every applicant that sent a resume for a position they were not qualified for, I might be able to give Bill Gates a run for his money. The problem I believe is twofold: applicants send their resumes to jobs that sounds interesting and that they would like to have, whether or not they are truly qualified for them, and/or they are so desperate to find a job that that they will throw their resumes at everything under the sun, hoping that something will “stick.”
Whatever the reasoning, do not waste your time applying for positions for which you are not a perfect fit – rather than maybe qualified to do. Why? Because the lack of response will soon frustrate you, despite all of your well-meaning efforts. If the position calls for someone who has fluency in Chinese and software licensing experience, the fact that you took a Chinese course in college and drafted one licensing agreement does not make you a perfect fit. You need to be as exacting about your skills and qualifications as a legal employer will be. What do I mean by “perfect fit?” The test is quite simple: After having read the job description, can you honestly say you meet each and every single one of the requirements listed? If the answer isn't yes, move on.
The road to an in-house position is not an easy one. But to help your chances of success, you need to first be ready for a long process, be honest about your qualifications, and make the effort to grow you internal network. Anything less, and you might never get that shot at an in-house position.
Could the In-House Legal Market Be Improving?
The legal job market has never picked back up since the recession, and talks of market improvements have been rather more wishful thinking than reality. In short, the legal job market has been grim. Yet, there might be a glimmer of light on the horizon coming from in-house legal department: hiring may be on the rise.
A recent survey from HBR Consulting, a consultant to law firms and law departments, shows that in-house hiring may be on the rise. This is a trend that we have been noticing at ESQ Recruiting as well.
What’s prompting a rise in hiring at corporate legal departments? A concerted effort by companies to reduce their legal expenditures and reliance on outside law firms. Legal work has not lessened, if anything, it has increased as a result of recent regulatory changes. As a result, companies are seeking to bring more of the work in-house, which could mean more in-house jobs.
Companies also seem to be on the rebound. According to the annual Association of Corporate Counsel survey, only 54 percent said that their department has been affected this year by the economic downturn—a significant drop from the 74 percent reported in 2009. In addition, the survey also indicate that CLOs were planning to add staff in the coming year, 37% more than reported in 2009, 2008, or 2007.
It also looks like corporate legal departments are willing to spend a little, to save a lot more. The Altman Weil and LexisNexis Martindale-Hubbell survey found an overall increase in law department spending of 7.9 percent to an average spending of $914,000 per lawyer for fiscal year 2005. Outside legal costs rose by 5.5 percent to an average of about $602,000 per lawyer. The survey also found a 19 percent increase in internal hiring with lawyers per billion of revenue rising from 2.93 lawyers per billion in revenue to 3.49 lawyers per billion in revenue."
The results of the 2011 HBR Law Department Survey compiled information from 219 companies in 20 industries. Seventy percent of the participating companies had revenues at or above the Fortune 500 level. Key findings from the survey include the following:
- More than 50 percent of companies reported an increase in worldwide legal staff between 2009 and 2010.
- More than 80 percent of companies said their legal needs are increasing.
- More than 40 percent of companies plan to increase the number of internal lawyers by an average of 10 percent in the next year.
- About 60 percent of survey participants cut outside legal spend by an average of 3 percent between 2009 and 2010.
What does this mean? Corporate legal departments are opening their doors, which is a good sign, but that does not mean that the market is necessarily looking very rosy. Those positions are still few, very competitive, and companies are setting the bar very high for new hires. The good news is that the trend is looking to continue, which may lead to more opportunities for lawyers seeking in-house positions.
Coping with a Change in Employment Status: How To Bounce Back.
We regularly read and hear that "jobs for life" are disappearing, to be replaced by a pattern of consecutive jobs and unpredictable career dislocations. When the time comes to face such a change on a personal level, these statistics take on a whole new meaning.
The emotions one experiences during a change of employment status are entirely normal. Although no two people react exactly the same way, most of us experience a range of emotions that includes shock, denial, anger, worry, depression, resistance, relief, acceptance, and the need to take action.Fortunately, a change in employment status does not have to lead to a gloomy spiral of events. Your initial feelings of anger, frustration and despair can and will be overcome and eventually replaced by feelings of acceptance and control.By thinking positively, taking appropriate action and looking toward the future, this transition can become an opportunity to secure a more satisfying position. Throughout this process your recruiter can help you take constructive and creative steps towards developing a positive job campaign, and moving to the next step of your career.
Facing the World During Your Job Search. Family, friends, neighbors and colleagues may already be asking you "What happened with your job?" This is a question you will frequently hear as you begin your job search. It is important to handle this question capably, regardless of who asks it. Therefore, one of the first things you should do is develop a response that is truthful and acceptable to you and prospective employers. When creating your response, you should consider applying the following: (1) keeping it short and factual, (2) be as positive as possible, and (3) put your best foot forward, but remain truthful.
Keeping it Short. Generally, the more you try to explain, the more difficult your explanation becomes. You should prepare a short, to the point statement, and be prepared to answer follow-up questions, but only if they are asked.
Be As Positive As Possible. Negative statements about your former boss or employing organization will only hurt you. The last think you want to do is burn bridges, or give a prospective employer the impression that you are a disgruntled employee. By keeping your statement as positive as possible, you will only help to advance your candidacy.
Put Your Best Foot Forward, But Remain Truthful. There are a number of factors that result in someone leaving. Explain them to your recruiter, he or she will help you determine reasons that are most positive and easiest to explain, while remaining truthful.
What it Takes to Succeed. First, it is important for you to believe that you will succeed in your job search. In order to do this, you should take some time and determine your strengths, and clarify your objectives. The following steps will help you put together an effective plan for your job search, and help you create a strategic plan:
(1) Take Stock. You should identify past successes, current strengths, overall work style, and personal preferences.
(2) Refine Your Career Objectives. You should be clear, focused, and realistic about your career objectives, based on your past work experience and academic credentials.
(3) Make a Dynamic Presentation. Working with a recruiting professional may help you to draft an effective resume and cover letter, and review interview skills so that you may be at your highest level of effectiveness when approaching a potential employer. Whether or not you decide to work with a recruiting professional be sure to put together marketing materials (resume, cover letter, biography etc.) that effectively showcase your strengths and talents as they relate to the particular position you are applying to.
Be Persistent. The job process can be a long and challenging one, but your commitment to the search and implementation of your job search plan will give you the best chances to ensure a successful outcome.
Job loss can be a very emotionally traumatic experience. In fact, it ranks among the highest of all stress-causing situations. However, rather than looking at a job loss as a horrible thing, you should focus on its positive aspects. Remember, this might be an opportunity for you to find a more rewarding position. Be open to opportunities. You never know what doors this turn of events may open for you.
The Stigma of Being “Laid Off”
Q: Why is there such a stigma attached to lawyers being "laid off”?
Professionals in a number of industries are laid off and re-employed all the time, without missing a beat. Yet, when it comes to lawyers, it seems as if employers think of you as “defective” when you’re unemployed, even if the layoff was not performance-related. In the in-house world, companies often get acquired, go out of business, or reduce costs by laying off legal. It’s not unusual to find yourself out of a job, so why the stigma? I think I've shown more talent and moxie than many of my peers that are currently employed. Yet, employers seem more reticent to consider someone without a current job, than someone with one. Please explain. Frustrated Laid Off Lawyer
A. Dear Frustrated Laid Off Lawyer:
There is a big difference between leaving a company because the company was bought or went out of business, than having to leave a company because you were fired. For the most part, when a company is purchased or going south, you have some time to see things coming, and employers assume that if you have this much “talent and moxie,” you'll have another job already lined up before your head comes to the chopping block.
“A star is a star is a star.” That’s the common line of thinking by many legal employers. They see it as the bottom line no matter how rough the economy may be, no matter how bad the company's financial straits may have become, there is always work for the stars. Please do not misinterpret what I just said. I do not happen to think that someone who has been laid off cannot be an outstanding lawyer. There are legal employers out there that can make the distinction and who understand why someone may have been laid off. Clearly, there are situations where even a superstar must be let go. That said, many legal employers think that if a lawyer has been laid off, he or she was not indispensable. Of course, this is even worst if the company retained any of its lawyers, and only laid off a few.
Because usually the superstar is not the one that is being asked to leave, being laid off ends up having a negative connotation attached to it. Of course, being fired is, without a doubt, is the worst thing that can happen in this context but unfortunately, being laid off is only a bit better. Generally what helps to soften the stigma is when the layoff was made public, the acquisition or bankruptcy was well publicized, and none of the lawyers survived. However, things are not always that transparent, and employers in a market where there are more candidates that jobs, are not always willing to look into the reasons behind a layoff. It is for all of these reasons that there is a stigma attached to someone who has been terminated due to a layoff.
You have signed your name as "Frustrated." Don’t let your status slow down your job search. Update your resume and continue to make yourself available to the job market. If you are a good lawyer, there are still plenty of legal employers that will be willing to consider your candidacy, laid off or not. That said, next time don't wait for trouble to strike. If you have any reason to suspect that you might be a victim of a layoff, take action to look for your next job. You may have to jump ship sooner than you’d like. Don't wait until you have that "stigma" attached to your candidacy.
Who’s in Demand for In-House Counsel Positions?
A new survey shows senior level lawyers are in particularly high demand for in-house counsel positions. The survey, by New York legal consulting firm Eoilis International Group, found an increase in attorney interviews at big corporations last year and, among them, were interviews of senior level lawyers and law firm partners.
Why Are Senior-Level Attorneys in Demand?
This is not surprising considering the state of the legal market. There is a plethora of highly skilled attorneys looking for work, and companies are taking full advantage of this market. They are seeking to hire experienced counsel, sometimes at junior-level prices, simply because they can. Also, law firms have not delivered the type of cost-savings companies were expecting during the downturn, and as a result companies have decided to take the legal work in-house and enjoy the savings.
Historically, in-house legal departments have not been good training grounds for attorneys, which is still the case today. Company lawyers are part of the “overhead,” and therefore they must quickly add value to an organization to justify their existence. They do this by being able to work independently, with few resources, on a wide variety of matters. These are typically the traits of senior level attorneys who have been practicing for ten years or more. These attorneys have extensive practice area, management, and business experience all rolled into one. They not only know how to practice law, but they know how to manage people and budgets.
What Else Are Companies Looking For?
According to the survey, in-house positions weren’t the only jobs up for grabs at big corporations. 38% of companies surveyed reported considering experienced attorneys for a wide range of positions, including quasi-legal and business roles. This study signifies two things: Corporations are hiring, BUT their in-house legal departments are looking for experienced lawyers who understand private practice.
"In-house departments are in the process of trying to revamp their images," says Nicky Mukerji, director of business intelligence at LegalBill. "Presenting hires with both legal and business experience sends a strong message to corporate executives and financial departments that law departments will be capable of handling all aspects of their caseloads."
What’s a Recent Graduate or Junior-Level Attorney To Do?
Do not set yourself up for failure by applying to in-house positions for which you are not ready. Get experience with a law firm first. In-house legal departments do not hire attorneys without substantive experience, which is usually translates to at least five years of experience. Moreover, all types of legal experience is not viewed the same by in-house legal departments. Companies tend to favor law firm-trained attorneys over those with government or private practice experience. Companies almost never hire solo practitioners. Companies also do not favor hiring government attorneys either, unless they have the type of regulatory experience that matches their industry. Finally, the great majority of in-house positions are in transactional practice areas, not litigation. Litigation positions are very rare and often reserved for partner-level candidates. If you want to improve your chances of landing an in-house job, focus on transactional practice areas with a law firm.
What’s a Mid-Level Attorney To Do In Today's Job Market?
They need to wait for the market to improve and bulk up on their skills in the meantime. Being a very good attorney is no longer good enough to land an in-house position. You have to be versatile, adaptable, and efficient and know the business and industry of the companies you are targeting. Forget the general counsel position or golden job at a Fortune 500, at least for now. Instead, go for in-house counsel positions that allow for upward mobility, and refocus on small-to-medium-sized corporations in industries in which you have experience. In other words bid your time, try to get your foot in the door at a smaller organization and in a more junior-level role, and stand out by virtue of your work and business skills.
What About Senior-Level Attorneys and Partners?
It’s not a panacea for them either. While experienced partners and attorneys are always more attractive to executives and general counsels, chances are unless you’ve already been a general counsel, not many companies will give you a shot at the top job unless you’ve already proven yourself. It’s a chicken and egg dilemma. This can be overcome by a strong show of the skills and experiences we discussed above. That said, it’s still a very competitive market, so be ready for a long process ahead.
There are still very few positions available and the requirements are increasingly demanding. You need to be able to do it all, be an expert in your field, knowledgeable in a variety of other practice areas, know how to manage, train and hire people, manage outside counsels, balance budgets effectively, and understand the business of the company. Oh, and be ready for a steep pay cut.
While Fortune 500 companies may still pay their general counsel handsomely, the odds of landing that kind of position is akin to winning the lottery. The vast majority of in-house positions are not with Fortune 500 companies, and do not come with a high compensation package. That’s right, companies do not pay law firm salaries, and the compensation cuts from a law firm partner to an in-house legal position, even at the general counsel level, are on average about 50%, no matter how talented the candidate. While you may be ready for a pay cut, the real question is, how low can you go? If you are lucky enough to be selected for a position, be ready to make significant concessions to go to the in-house side.
The Ice Age of In-House Legal Hiring Might Be Over
How long can in-house legal departments go on without hiring? As the last economic storm demonstrated, hiring freezes can last a pretty long time. But according to a recent report by InsideCounsel, the ice age of in-house legal hiring may be thawing out.
How Much hiring Are We Talking About?
While not everyone is exactly in agreement, the general consensus seems to be that hiring is nevertheless on the rise.
Hildebrandt Baker Robbins’ 2010 Law Department Survey reports that 41% of law departments expect an increase in lawyers between 2010 and 2011. Robert Half 's recent survey reported 29-31% of legal employers planning on increasing their numbers. No matter the source, over 50% of all legal departments are not planning to hire.
At least, they are no longer in a firing mood. Only about 8-9% expect a decrease, which is an improvement over 30% between 2008 and 2009 according to the same Hildebrandt survey.
No one expects any type of hiring frenzy, or even levels to get back to pre-recession levels, but at least the bleeding is over, and legal departments may be growing weary of doing “more with less,” at least to some extent. Companies that downsized a bit too much to survive the recession may still be enjoying the savings.
It will be difficult to get senior management to buy into an increase in headcount, unless they have very compelling reasons to do so. Chances are, in-house legal department that are ready to increase their capabilities will go into hiring toe first, starting with temporary and contract hires to test out the waters.
What’s The Hiring Like In-House?
In-house employers are demanding more, for less. In other words, they are favoring candidates with more experience, often hiring candidates with 5-10 years more experience than the minimum required for the position. At the same time, they have no qualms about offering the same senior candidates lower level salaries that were initially calculated for someone 5-10 years more junior. And they can getaway with it. It’s all about supply and demand.
The market is flooded with applicants. It’s not just a numbers game; the applicant pool is also very deep. The skill level of those being considered for in-house positions is astonishing. In-house employers are not only demanding more experience and better credentials for less money, but also more practice breadth and depth. Potential candidates need to be experts in their practice area, as well as be able to practice in a multitude of other areas. They are "jacks of all trade, and at least master of one." In-house candidates are also required to have industry-specific experience, strong business backgrounds, and excellent interpersonal skills. They have to be the “total package.”
While the in-house job market is heating up, there’s still a disparity between the number of job openings and the number of applicants. Therefore, for those seeking in-house jobs, patience is key. What can in-house legal job seekers do to improve their chances? Continue to work on their skill set, network, and keep their ears and eyes open. While the ice may be melting, it's still very slippery out there, and not everyone will land on their feet just yet.
In-House Legal Departments & Salary Reports for 2011
Now that the dust has settled from the economic tumble of 2008, where are in-house legal departments today? InsideCounsel explores the state of in-house legal departments, including in-house compensation.
With most economic experts declaring the recession over—the aftereffects of the crash are evident across all corporate sectors, including in-house legal departments. Staffs are smaller, workloads are heavier, budgets are tighter and salaries are somewhat stagnant.
Having to adjust quickly to the changes—whether they liked them or not—was essential for survival, notes Vanessa Vidal, president of ESQ Recruiting. "There is a sense of resignation and acceptance when it comes to low base salaries and freezes," she says. "Counsel have no choice in the matter, because no one else is offering anything different, and jobs remain hard to come by."
What Are Salaries Like?
In 2010, according to Hildebrandt’s annual law department salary survey, the average base salary for all attorney levels in-house was approximately $174,000. The median was even lower at about $167,000. While such six-figure salaries are nothing to sneeze at, it can be difficult for in-house counsel to suppress the sniffles when comparing those figures to law firm salaries. According to the 2011 Robert Half Legal Salary Guide, first-year associates at large law firms will earn, on average, between $107,250 and $132,000 this year. When a first-year associate can make nearly the same salary as an experienced in-house attorney, it’s easy to wonder why anyone would go in-house.
Robert Major, founding partner at Major, Lindsey & Africa, says it’s actually the overwhelming demand among lawyers to go in-house, though, that keeps the salary gap so wide. Since this is a “supply and demand” issue, with many lawyers going after few in-house positions, the gap is likely to remain.
The most highly compensated practice area in Hildebrandt’s survey was mergers and acquisitions. Intellectual property lawyers specializing in licensing earned the second largest amount of money. They also had the highest median base salary, $193,738. Lawyers specializing in securities litigation saw the largest median base salary increase (3.3 percent), as well as the largest median cash bonuses, which amounted to $71,000.
What Are the “Hot” Practice Areas?
Accordign to Robert Half Legal, companies continue to look for lawyers with business-development skills and strong interpersonal. Litigation, bankruptcy and foreclosure continue to drive the need for bringing on new talent.
Vanessa Vidal, president of ESQ Recruiting, says that companies looking for new growth will likely consider small acquisitions as opposed to multibillion-dollar deals, which will mean an overall uptick in M&A activity over the next couple years. "Some of the bigger deals will most likely occur in consolidating industries, such as energy and health care," she says. Vidal also predicts that "emerging markets will lead the M&A surge in 2011, with Asia in the lead."
What Does It Take to “Shine” In-House?
Michael Melbinger, a partner at Winston & Strawn and chair of the firm’s employee benefits and executive compensation practice, says that "The No. 1 skill that we see [being rewarded] is the ability to minimize the use of outside counsel," says Melbinger. "Companies are rewarding legal departments that are able to do the work themselves and build their skills. Sometimes this means spending more hours and taking on more work with fewer people. But what it comes down to is that if he or she can save money, then that should be rewarded."
Vanessa Vidal, president of ESQ Recruiting, says companies are frequently recognizing counsel who demonstrate flexibility and adaptability. "They are what I call the ‘MacGyvers’ of the legal world—counsel who can come up with creative strategies to accomplish their goals with few resources available," she says.
Can We Talk Bonus?
Scanning through Hildebrandt’s annual law department salary survey, one data set practically pops off the page. Bonuses, the survey results indicate, have jumped an average of 73.5 percent between 2009 and 2010. Even the significantly lower median increase of 10.2 percent is enough to make jaws drop in envy. But it looks like these figures are just a return to standard levels after a recession-motivated low in 2009, cautions Lauren Chung, director in the law department consulting practice at Hildebrandt. Today, bonuses tend to be set and non-negotiable, just like base salaries.
What About Long-Term Incentives?
They’re baack! Long-term incentives—deferred compensation such as stock and equity—may not have returned to pre-recession levels, but they’re likely to become increasingly important components of compensation packages in years to come.
InsideCounsel, "In-House Salary Report," by Kayleigh Roberts and Ashley Trent, February 2011 Issue.
In-House IP Law To Sizzle in 2011
Intellectual Property Law Will Be a "Hot" In-House Practice for 2011.
IP attorneys around the country can rejoice, as intellectual property promises to be sizzling in the New Year. Intellectual property is an organization’s most valuable asset, and securing that asset has made intellectual property a recession-proof practice. When the economy declines, it usually forces companies to think “outside the box” and look for new products, inventions, or ideas.
This usually translates into an increase in services to help protect the intellectual capital of these companies. Invention and innovation is what keeps companies competitive, and intellectual property lawyers, paralegals, and other professionals very busy. High tech companies are in the business of invention and innovation, and they are the main consumers of intellectual property services.
What Kind of In-House IP Attorneys are Companies Looking For?
As is the case with most in-house counsel hires these days, legal departments increasingly need lawyers who not only possess the requisite IP skills, but who are able to work across a lot of boundaries in the corporation. Today, to succeed as an in-house IP counsel, you not only need to be an accomplished IP attorney, but fully understand the business, and be able to provide business advice as well.
The new in-house IP counsel is one that can as easily handle a trademark application, but also be able to provide strategic advice to business executives on areas such as mergers and acquisitions and divestitures. Today's IP counsel needs to be business savvy, and have the people skills to effectively counsel senior executives on a wider array of matters.
What can IP counsels, or soon to be in-house IP counsel, do to succeed in this new environment? Get plenty of corporate business experience. The straight road from engineering to law school may not be the most effective route to becoming the type of IP counsel legal departments are looking for. Take the time to smell the "corporate roses" first. Getting good business experience is the key to making yourself attractive and succeed in this new in-house environment.
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