Compensation inequality will rise as law departments struggle to retain their outstanding lawyers

We can expect law departments to report that pay inequality is increasing, as they give larger raises to their star lawyers and hold back increases for journeymen lawyers. A survey by the Corporate Executive Board found that “80% of organisations wanted to increase pay differentials. Those differentials could get a lot wider in the future.”

Further in the Economist, Vol. 381, Oct. 7, 2006 at 22, the more complex the job, the greater the variance in performance by workers (See my post of Aug. 16, 2006 on super-star lawyers.). High-level corporate legal advice, therefore, means yawning differences in performance, and that law departments desirous of keeping their standouts will award them larger slices of the compensation pie. Assuming the total compensation of a department cannot grow much, inequality will increase as the less skilled lawyers receive tiny or no raises and fall farther behind.

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