Articles Posted in Talent

I had an opportunity to analyze some of the data collected by ALM Intelligence for its recent benchmark survey. Of the 29 respondent law departments that had at least 10 lawyers, 19 of them (65%) reported having at least one “Legal Administrator.” In the next 19 smaller law departments that had at least five lawyers but not more than nine, only six (about 34%) reported having an administrator. This data suggests that among U.S. law departments at somewhere around eight lawyers, perhaps it becomes as common to have an administrator as not to have one. Since a ratio of one non-lawyer for every lawyer holds commonly in U.S. legal departments, that tipping point would leave approximately 16 people, whose administrative demands – plus external counsel – justify someone in a dedicated law department operations role.

It is also noteworthy that 11 of the law departments reported having an information systems person (and a total of 30) while three more than that had a dedicated financial analyst position (28 total positions in the group). Sophisticated law departments need specialists to help handle their various needs.
To learn more about the Law Department Metrics Benchmark Survey of ALM Legal Intelligence, click here for ALM’s website.

Stimulated by a question asked of me by a leading general counsel, I researched the differences between the titles “General Counsel” and “Chief Legal Officer.” Some posts here offered background (See my post of March 23, 2005: title expansion and more frequent appearance of CLO; March 22, 2006: differentiates “general counsel” and “chief legal officer”; May 4, 2007: European counterparts as “Head of legal” and “Legal Director; and Dec. 5, 2011: post on this blog with the most number of visits was about the distinction.).

The CLO title is definitely of more recent vintage and is also less frequent than the GC title. Data to support this belief is not known to me, but that is the impression I have from consulting, reading and my posts here (See my post of Dec. 31, 2007: Wikipedia entries for CLO and GC; Jan. 19, 2008: LinkedIn search found “general counsel” had more than 500 profiles while “chief legal officer” had 106; and Oct. 12, 2009: can only persons with bar licenses in the US be “general counsel”.).

Where the title is bestowed, it seems to be higher ranking, with more corporate muscle, than “general counsel” (See my post of Nov. 6, 2007: CLOs get more equity awards than GCs; and April 24, 2009: salary differences between CLO and GC positions.).

As Louis XIV remarked about Edward Gibbon, “scribble, scribble, scribble”), this blog has repaid readers’ interest in compensation many times – on the order of 124 posts, including some duplicates. At your option, you can benefit from delving into this stock of eight metaposts on compensation.

Compensation of in-house lawyers ex US (See my post of Jan. 11, 2011: comp outside the United States with 10 references.).

Compensation posts recently (See my post of Jan. 12, 2011: compensation topics with 31 references.).

No doubt, the Human Resources department controls many aspects of compensation for members of legal departments. They enforce corporate policies about amounts of raises, eligibility, mid-year corrections, promotions, titles, bonuses, equity awards and everything else. To regulate its domain, HR obtains data on lawyer compensation and uses that data to support or challenge what a general counsel would like to do.

The HR department often buys compensation data from third-party surveys and the law department might never know about the data or the participant group – or be able to learn from the management metrics that sometimes come bundled together.

To counterbalance the HR hegemony, general counsel take part in compensation surveys, therefore, is so that they can respond knowledgeably and persuasively to the data brandished by HR. Rarely does HR push general counsel to pay more! As with metrics on staffing and spending, general counsel sometimes want their own independent source to arm them for internecine power struggles.

Whether or not money is the root of all evil, money is certainly at the root of many posts here. I have collected compensation-related posts since my last metaposts and organized them by several topics.

Past the paycheck, or what do in-house lawyers earn in addition to their salary (See my post of Jan. 20, 2009: does Black-Scholes give a value for restricted stock awards; Nov. 27, 2010: how to handle a request by an executive to reward a lawyer with a bonus; Nov. 30, 2010 #2: car allowances; June 29, 2011: general counsel and potential conflicts of interest based on options held; and Oct. 10, 2011: in-house counsel like their jobs partly because of equity grants.).

Sources of data, or how can you find compensation figures (See my post of Jan. 13, 2011: MySalary.com; Jan. 18, 2011: online salary calculator from Robert Half; Jan. 21, 2011: another online salary site; and Oct. 24, 2011: participation numbers during 2007-2011 in ACC/Empsight compensation surveys.).

To the extent lawyers are based outside the country of a law department’s main group of lawyers, an awkward circumlocution for “internationally-based” lawyers, general counsel have a harder time knowing what to pay them. Data from local markets is much harder to find.

Several posts in the past few years have brought to the fore scattered data about compensation of in-house lawyers outside the United States. These posts might help in the quest (See my post of Jan. 5, 2011: salaries of Brazilian and Latin American senior lawyers of multinationals; July 11, 2011: compensation data for Canadian in-house lawyers; July 12, 2011: ranges of salaries for Canadian in-house lawyers; July 18, 2011: pay of Canadian general counsel by level; July 8, 2010 #2: benchmark data from Rees Morrison and Laurence Simons study; Feb. 5, 2009 #2: low salaries for Indian law graduates; June 13, 2009: in-house salaries in Japan; July 19, 2009 #3: high salaries of ex-pats; Jan. 7, 2009: US and UK compensation differentials for top in-house lawyer; and Jan. 8, 2009: UK in-house counsel stay put so their salaries stagnate.).

At 3M, the law department of 92 lawyers has a mentoring program for newcomers. “All new legal employees are assigned a mentor to provide specific advice on work and networking, as well as encouragement to help ensure retention.” This quote comes from Diversity & The Bar, Nov./Dec. 2011 at 37.

Typically mentoring programs aim at minority counsel (See my post of Aug. 12, 2008: General Motors and pairing of in-house lawyers with minority lawyers outside; Dec. 11, 2008: Pfizer and its diversity team include mentoring; March 11, 2009: US Postal Service and its mentoring program; May 13, 2009: Exelon’s mentoring committee and use of Mentium by Ford Motor Credit; July 19, 2010: strive for transparency regarding the mentoring program; Oct. 18, 2010: GCs can mentor; Nov. 27, 2010: diverse lawyers at your department “mentor” a minority lawyer at a law firm; Jan. 24, 2011: Morgan Stanley provides mentors for diverse attorneys; and May 25, 2011: general counsel should seek out a mentor outside the company.). Still, as demonstrated by 3M, they have broader reach beyond support for diversity lawyers.

In his column for the ACC Docket, Dec. 2011 at 4, Jonathan Oviatt cites “one of the most important findings in the CLO Survey is that 92 percent of CLOs remain satisfied with their careers.” The glow emanating from that cheerful factoid may be completely deserved. Or, it might deserve inspection.

Any statistician would point out that CLOs who were sufficiently dissatisfied to leave their position weren’t counted. A survivor bias of sorts is at work. On further inspection, someone would like to know whether there was a choice of “very satisfied” or “completely satisfied.” If so, the luke-warm “satisfied” provides thin gruel. If the question was “yes or no, are you satisfied,” 92 percent seems low!

As a third comment, to put much credence on the reported finding you would want to know how many general counsel responded, the demographics of the population, and the survey’s methodology. Then too, if the identical question were asked of a group of other professionals, such as partners in architectural firms or managing partners in accounting firms, would the finding be that in the 90th percentile are satisfied? In other words, maybe most people with good jobs are content with their career. One wonders, too, whether career contentment equals current-position contentment. Lastly, if nearly one out of ten of the top lawyers were not satisfied, doesn’t that suggest a higher level of dissatisfaction might be likely lower down?

The NY Times, Jan. 1, 2012 at BU7, gave unemployment rates by level of academic achievement. The rate started at 13.2 percent for those with no high school diploma, dropped to 8.8 percent for those with only a high school diploma, and dropped almost a further half to 4.4 percent for those with a college degree. If you take those three jobless rates, you could extrapolate to 2 percent or less for graduates of law school and perhaps even slightly lower for those who passed the bar and at some time held an in-house position. Perhaps.

Economists refer to a base rate of unemployment that is ever present simply because of job changes due to spousal moves, mergers, and other reasons. Could the unemployment rate of lawyers who have practiced in a company be as low as one or two percent?

An ad in the Economist, Dec. 17, 2011 at 160, seeks a general counsel for The Energy Charter Secretariat. It has three aspects that deserve mention. (1) It seeks candidates with “an excellent law degree.” Perhaps this is a Britishism, perhaps it is a polite way of saying “You have to have graduated a name-brand law school,” or perhaps it seeks high grades and law review (come to think of it, are there law reviews in non-US law schools?). To be blunt, what does this requirement of excellent law degree mean?

(2) The chief lawyer will get “an attractive, tax-free remuneration package.” The Charter is an international organization so perhaps its employees pay no tax in the way at least some United Nations employees pay no tax. Nice work if you can get it. And, “remuneration” is much tonier than “pay.”

(3) The Secretariat position “is offered on the basis of a three-year, fixed-term contract with the possibility of renewal.” Although many general counsel of U.S. law departments have contracts, I doubt that they are term limited (See my post of Jan. 18, 2009: severance contracts for general counsel.).