How to compensate an in-house lawyer: A guide to calculating compensation

February 27, 2018

As in-house legal recruitment specialists, we at The Counsel Network constantly receive inquiries from in-house counsel of all levels and human resources professionals seeking ‘real time’ advice with respect to corporate counsel compensation. As a result, in 2009, in conjunction with the Canadian Corporate Counsel Association, we conducted the first comprehensive Canadian In-House Counsel Compensation & Career Survey.

As the duties of and pressures on in-house lawyers continue to rise, and as accountability becomes a   common watchword in bottom-line terms, corporate counsel know they must be worth a lot. The difficulty is finding out how much. As we launch our next survey, the results of which will be available in February 2018, it is timely to provide a guide on calculating compensation for in-house counsel.

The key to any compensation plan is that it must be fair. Every situation is different and there is no one-size-fits-all formula for determining fair compensation. However, there are fundamental principles and relevant factors to consider when calculating compensation for in-house lawyers.

Two fundamental principles of calculating in-house counsel compensation:

  1. Always consider the overall compensation package – unlike in private practice, in-house counsel cannot look at base salary alone. Base salary is but one aspect of an entire compensation package.
  2. Always consider base compensation last, figure out the rest of the package first – determine what short and long-term bonuses, pension, RRSP contributions, benefits, and other incentive programs which are an integral part of remuneration are included in your compensation package. Once you have figured all aspects of the package it will be easier to determine the range you ought to receive for base compensation.

Ten factors to consider when determining in-house counsel compensation:

  1. Company size, revenue, industry sector, and headquarters.
  2. Size of the legal department (lawyers and support staff).
  3. Reporting structure: where are you in the chain of command?
  4. Corporate culture: pace, focus, hours.
  5. Nature of the work: day-to-day routine or deal-focused? Travel or stay-at-home?
  6. Bonus factors: options, benefits, pension, holidays/flex days?
  7. Specialty practice areas – are you in a practice that is specialized and in high demand?
  8. Your individual aptitude. How much are you worth to the company?
  9. Internal pay equity: compensation of comparable colleagues within the company but outside the legal department
  10. Your peers in the market: consider how similarly situated lawyers are compensated. Refer to The Counsel Network and CCCA’s In-House Counsel Compensation & Career Survey Report.

Once you’ve completed this personal audit by answering the above questions, you’ll have a better sense of your own value within your organization. You will also be in a better position to calculate the base compensation you deserve and how that compares to lawyers within other corporations and organizations.

Download your free copy of the 2018 In-House Counsel Compensation & Career Survey Report. Finally, if you have lingering questions regarding your compensation, reach out to one of our legal recruitment consultants for a confidential discussion. The Counsel Network is widely recognized as one of the top legal recruiting firms in Canada and in-house legal recruitment specialists.

– Dal Bhathal, Managing Partner