The term “salary compression” refers to the common problem that arises when a law department hires a new lawyer from a law firm. Often, the department must pay that new lawyer at a rate that is relatively high compared to lawyers who have been in the law department for years. Sometimes an incoming specialist, in fact, might make more than a veteran in the same pay-grade.
If so, another principle of compensation comes to the fore: equity. If a new hire compresses pay, should you raise the pay of the other lawyers?