Why there might be differences in the compensation of lawyers among highly-paid practice areas

Some lawyers carry fat purses: international, M&A; some lawyers borrow food stamps: insurance, banking. Why?

InsideCounsel, April 2007 at 59 takes a look at several surveys of in-house compensation. One of the data charts (at 64) shows six practice areas ranked by lawyer pay: International ($226,200), M&A ($221,500), Compliance ($215,100), Antitrust/trade ($211,100), Securities/Finance ($210,000) and Patent litigation ($209,900).

The lowest paid of these practice areas is seven percent less than the highest paid, so in fact all these top salaries are tightly clustered. It may be that international lawyers enjoy some expat benefits, which drive up their pay. And experienced compliance lawyers are hot in demand now. Otherwise, I am hard-pressed to dream up any reason for the pay gaps other than statistically insignificant variability – except size of company.

Compared to smaller companies, large ones have more M&A activity, more antitrust issues, and certainly more publicly-traded securities and debt. Thus, the instrumental variable may be size of company; big companies have higher pay and these three specialties (M&A, antitrust, and corporate securities) are more often found in big companies (See my post of Dec. 12, 2006 on instrumental variables that explain a phenomenon.). Perhaps legal specialty is not the driver of higher pay as much as is the size of the company