Female general counsel earn less than male counterparts

The differences are starkest at the top echelons of leadership.

But there are encouraging signs that gender pay disparities may be shrinking, according to a recent survey by the Association of Corporate Counsel, a global legal association representing more than 43,000 members in 85 countries.

At the chief legal officer and general counsel level, median total compensation for women is US$210,000, or 78 per cent of the median total compensation earned by men, US$270,000. The pay gap peaks for lawyers who have 11 to 20 years of in-house tenure, with female in-house lawyers earning 69 per cent of their male counterparts’ compensation.

“Yet we are optimistic that the gap appears to shrink for newer generations of corporate counsel leaders and hope the data in the survey will yield more transparency,” noted said Veta Richardson, ACC’s president & chief executive officer.

That’s because the disparity in median compensation among general counsels who received a law degree after 2010 is less than half of the gap among general counsels who graduated law school prior to 2000.

On top of that, other positions in the corporate law department featured smaller gaps in compensation. , Female directors of compliance were almost on par with their male counterparts, with 95 per cent gender compensation parity while heads of legal operations were on an equal footing, the only job category without pay disparity. The median total compensation for head of legal operations is US$189,063 while the median total compensation for manager of legal operations is US$120,000. The top five per cent of heads of legal operations earn at least US$464,000 while legal operations managers make a minimum of US$275,000. More female than male respondents serve as heads of legal operations, and half of all survey respondents said their companies have a distinct legal operations function, according to the survey.

The highest-earning general counsel work in biotechnology and life sciences as well as technical R&D. While the top five per cent earn at least US$3.3 million, the median compensation for biotech general counsel is US$346,000 and US$265,000 for general counsels in technical R&D.

In-house counsel, not surprisingly, earn more in public companies than privately owned firms. The median base salary for all in-house legal positions is nearly US$25,000 higher in public companies compared to private ones. The median total compensation for general counsels in public companies stands at US$399,000 compared to US$225,000 in private companies.

In-house counsel specializing in capital markets, securities and finance are top earning practice areas for both men and women, with a median total compensation  at US$280,000. That represents 37 per cent more than the median of all respondents.

Last year overall compensation increased for 75 per cent of all respondents, a trend expected to continue this year. Among those who received a raise, 25 per cent reported an increase of less than three per cent, 24 per cent said compensation increased between three and five per cent, and 24 per cent stated they received an increase of more than five per cent.

More than three-quarters of in-house counsel expect a pay hike this year. General counsel have the “greatest expectation” for salary growth across all job categories, with 26 per cent expecting an increase of at least five per cent, according to the survey.

“This is likely because more senior positions often receive stock options and restricted shares, which on average have a potential growth value that is higher than one’s base salary,” noted the survey.

Elsewhere in the world, the largest gender pay gaps are in Latin America and the Middle East and Africa, where women in-house lawyers made between 38 and 45 per cent of what their male colleagues earned, respectively. The United States, Canada, and Australia, had the smallest gaps (85, 83, and 81 per cent, respectively).

In-house counsel see salaries climb to 4.3% but are still unhappy

The average annual salary of in-house counsel has risen over the past year yet massive numbers would not hesitate to scamper off to a new job, revealed a recent report.

The median annual salary increase rate for all positions across industries climbed by 4.3 per cent, up a fraction from 2016, according to the BarkerGilmore 2017 In-House Counsel Compensation Report. More than 1,500 in-house counsel in the United States responded to the online survey that was conducted from March to May 2017.

But that modest increase was not uniform across all sectors. In-house lawyers working in the tech sector experienced the largest upturn, with salaries up by 4.9 per cent, followed by those working in the professional services segment, with salaries rising by 4.8 per cent. At the tail end, in-house counsel employed by the financial sector and industrial and manufacturing received a paltry salary increase of 3.7 per cent, while those employed by the energy sector fared slightly better with a 3.9 per cent increase.

Regardless of the salary increase, in-house counsel are not happy campers. A little less than half, or 43 per cent, believe their compensation is below or significantly below than their peers working elsewhere, with litigators reporting the greatest dissatisfaction. Those working in real estate and banking or finance however expressed the highest levels of satisfaction, with over 20 per cent reporting compensation or significantly above average.

It’s no wonder then that at least one in three in-house counsel across all sectors assert there is a high or very high chance that they would consider a new job because of compensation issues. The figures are even more dismal when broken down by sector:

  • 47 per cent working in the energy sector say there is a high or very chance they will look elsewhere;
  • 44 per cent working in consumer, industrial and manufacturing, and technology sectors would do the same;
  • Those figures drop to 39 per cent working in financial, 38 per cent in life sciences and professional services, and 36 per cent in healthcare.

The report also reveals compensation averages for general counsel, managing counsel, and senior counsel. And the gap between those working in the public and private sector is staggering. The size of the gap decreases however as the position level decreases.

General counsel working for public companies, in the healthcare and technology sector, were the best paid, coming in at $857,343 and $837,500. General counsel working in the professional services sector were the lowest paid, with compensation standing at $412,900 for those employed by public companies and $272,500 in the private sector. All told, the variation swings from a low of $272,500 for in-house working in the private sector to a high of $495,000. Compensation for general counsel working for public companies was far more generous, ranging between $412,900 and nearly $860,00.

Managing counsel fared even worse, with compensation ranging from $246,000 to $407,000 for those working in the private sector to $276,000 to $407,000 in the public sector.

Senior counsel, the rank-and-file lawyers in a legal department, earned no more than $300,000, regardless of whether they worked in the private or public sector. The highest paid jobs for senior counsel were in life sciences, ranging between $227,500 and $281,927, while the lowest were those in the professional services, between $175,000 and $209,219.

“Many leaders overlook the fact that creating a competitive advantage…requires not only an in-depth evaluation of the current legal spend, but a detailed comparison with specific data and information pertaining to counsel compensation,” warned the report. “Likewise, organizations must hire and/or retain the talent necessary to consistently improve efficiencies and find ways to maximize the business’ competitive advantage.”

With great numbers of in-house counsel seeking greener pastures, it appears that leaders and organizations have their work cut out for them.