ALMResearchBlog

Survey: In-House Counsel Require More of Their Outside Counsel

According to an Associated Press report about the 2007 ACC/Serengeti Managing Outside Counsel Survey counsel have become more systematic in the ways that they manage their work with outside counsel and are applying basic vendor management practices in their evaluations.” Another major change during the past three years, according to the report, has been the increase in resources spent on compliance issues, “including periodic reporting on legal spending and developments.” Benchmarks from the survey available free through SerengetiLaw.com. The full report is $500 for ACC members, and $750 for non-members.

In-House Law Departments: Salaries, Spending

According to Altman Weil’s  2007 Law Department Compensation Benchmarking Survey, total compensation for in-house lawyers in management jumped 8% to 14% this year, and 4.5% to 23% for non-management lawyers. A report of the survey appeared in the National Law Journal. For chief legal officers, salaries rose 5.8% to a median $300,000 in 2007, while bonus dollars spiked 43% to $157,400. Division general counsel collected a 10.2% salary increase for a median of $232,000, plus a median $104,600 bonus. The survey includes data from 343 law departments with 8,148 lawyers and 72 one-lawyer departments.

Another recent NLJ article (In-house costs outpace outside counsel spending) reported on Hildebrandt International’s 2007 Law Department Survey and said that corporate legal spending increased 6% over the past year, with increases in internal spending (8%) outpacing external expenditures (3%). Total cash compensation for in-house attorneys, including salaries and bonus, climbed 10% last year, compared with 7.5% during the previous year, according to Hildebrandt’s study, which included 202 companies employing an average of 4.2 lawyers. They also surveyed companies' U.S. and international operations, and found that the median company has global revenue of $10 billion, spends nearly $30 million on legal matters and staff and has a U.S. law department with almost 30 layers and 60 staffers. The median company also shells out 58% of its U.S. legal spending on outside counsel and 40% on inside legal costs. Chief Legal Officer's total cash compensation rose $50,000 to nearly $900,000, with the median total at $800,000. General counsel's average cash compensation spiked 19% to $700,000.

2007 GC Compensation Survey: Just Released!

Just released! Corporate Counsel Magazine's salary survey of the 100 highest paid General Counsel at major corporations, the 2007 GC Compensation Survey. This year there were 193 GCs listed among the top five earners at Fortune 500 companies, four less than the previous year. The top 100 are ranked according to cash compensation, which includes salary and bonus. Data in the spreadsheet also includes stock grants, option grants, and stock cash-outs. Download the searchable, sortable, electronic spreadsheet directly from the ALM Research Store.

Salaries: What CEOs and General Counsel Make

According to an Associated Press report, half of the Standard & Poor 500 CEOs earned more than $8.3 million last year - and some earned far, far more than that. Salary, cash bonuses are a small portion of total compensation, the report said, and the increasing payout from stock options looks to have no end in sight. The most highly-compensated CEOs were named in the report. 

Information about the highest-paid GCs is available in the annual General Counsel Compensation Survey, published by Corporate Counsel magazine, and archived in the ALM Research Online database.

CEO Compensation: Forbes Report and Other Sources

Forbes magazine has issued its annual report on CEO compensation, noting that “The chief executives of America’s 500 biggest companies got a collective 38% pay raise last year … an average of $15.2 million apiece.”

We’ve posted several other blog items recently about sources for CEO compensation analyses and searchable databases, including a chart from the Wall Street Journal and the searchable database AFL-CIO’s Executive Pay Watch . And by the way, you can access our blog by clicking on this link: ALM Research Blog

ALM Research also offers data having to do with CEO compensation, the GC Compensation Survey, available as a searchable spreadsheet and (for subscribers) a searchable online database (years available include 1993-2006). The GC compensation data, like CEO compensation data in other reports, is based on the 10k (proxy) filings of public companies. Data available for each year is for the 100 best-paid GCs at the Fortune 500. The most current data available right now is for fiscal year 200. The new GC Compensation Survey will be available August 1st. To place an order now, email [email protected].

General Electric’s Winning Legal Department

For its second Best Legal Department competition, Corporate Counsel magazine asked corporate legal departments about everything from budgets to staffing to litigation strategy. Point values were assigned to key areas, such as outside counsel management, diversity and pro bono efforts. This year's winner stood out, according to CC editor Anthony Paonita. “The whole was greater than the sum of its parts. From using technology creatively, to managing its litigation proactively, to overseeing a select group of law firms, General Electric does it all.”

GC’s Likely to Spend More on Outside Counsel This Year

According to a survey report by the Association of Corporate Counsel and reported in ALM’s newspaper in San Francisco, The Recorder, in-house attorneys across the country report that they'll be giving more work to outside firms this year. The survey found that 25 percent of in-house counsel plan to increase their use of outside counsel, up from 16 percent last year. There's speculation that SOX is the central reason. 

Compensation: General Counsel

ALM’s online venue, Law.com carried a report the other day from the Associate Press about Merck & Co. raising their GC’s salary, from $689,400 to $780,000, while noting that the New Jersey-based drug manufactuer has been the target of numerous lawsuits from consumers claiming that Merck's Vioxx painkiller caused heart attacks. It took the drug off the market in 2004. The company said in a filing with the Securities and Exchange Commission that Chief Executive Richard T. Clark recommended increasing Frazier's salary because of his "significant contributions to Merck, as well as his highly valuable experience and exceptional leadership abilities." Frazier has been with the company since 1999, according to Monday's filing, the report said.

Each year, ALM’s editorial research editors cull through current SEC filings to find the five highest-paid executives at the largest companies (required by law to be listed on the proxy statement each year), because very frequently the General Counsel or Chief Legal Advisor is among those five highest-paid executives. ALM Research then archives the information (published each year in Corporate Counsel magazine), making it available in a spreadsheet report, the GC Compensation Survey. The report includes the name, rank, salary, bonus, and where applicable, other forms of remuneration for each of the GCs ranked. (As always, the information is available for no extra cost to subscribers, and on a pay-per-view basis to non-subscribers.)

This year, ALM’s newspaper in Atlanta, Daily Report, built a database to archive the same types of information about compensation for GCs and CLOs in Southeastern states. The most current published list, GC Pay in the Southeast is available online for free, and covers 197 GCs/CLOs in 11 Southeastern states.

Survey Results: The European Mid-Tier Corporate Market

A third major study of the European legal services market has just been released by LexisNexis Martindale-Hubble and written by Silvia Hodges, this one focusing on European mid-tier corporations, and what matters most in the delivery of legal services by outside counsel. According to the report, the survey establishes that, while few of these companies have formal annual legal budgets, they require the same full range of legal services as their larger competitors, and a significant number intend to increase their external legal spending in the next year.

   

Both qualitative and quantitative methods were used in the study, with 194 companies responding to a questionnaire, and 31 companies participating in in-depth face-to-face interviews. Of importance to marketers and business development professionals were the findings that selections of new firms were made mostly through referrals, that decision-makers took a dim view of marketing “gimmicks,” and that most decisions were made based on the reputation of an individual practitioner, rather than the firm’s reputation. In addition, respondents emphasized that their outside counsel were expected to display an in-depth knowledge of the client’s own business and industry, to the point of matching the expertise of the in-house counsel.

   

Request for copies of the survey may be addressed to Silvia Hodges ([email protected]).

GC Compensation Info for Southeastern GCs

ALM’s Atlanta-based magazine GC South has developed a new database into which they have compiled information about compensation for 197 General Counsel from public companies in 11 Southeastern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Virginia). And from that database they have just published a list, GC Pay in the Southeast, available free to subscribers of the Atlanta newspaper Daily Report, or by free registration.