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ACC North Florida Chapter Presentation

In-House Compensation Update &

Valuable Sources of Information and News for In-House Attorneys

| August 14, 2014 | Updated

Elizabeth Cohen, Esq.Attorney Search DirectorSpecial Counsel

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Overview

•2014 ALM* Law Department Compensation Benchmark Survey Compensation Trends Who’s paid what? Gender: Is there a difference in compensation?

•Law Firm vs. In-House Compensation

•2014 ALM Corporate Counsel’s Top 100 Best-Paid General Counsel

•Special Counsel: In-House Placement Data (2014)

•Valuable Sources of Information for In-House Lawyers: Social Media, Blogs and Good Ol’ Fashioned Networking

*ALM – American Lawyer Media

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ALM (American Lawyer Media)

Leading provider of specialized business news and information, focused primarily in the legal and commercial real estate sectors.

Known for:

•The American Lawyer

•New York Law Journal

•Corporate Counsel Magazine

•The National Law Journal

•The Legal Intelligencer

•The Legal Times

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2014 Compensation

ALM’s 2014 Law Department Compensation Benchmarking Survey

This survey was published in August 2014, and is based on 2013 data.

Highlights Presented

Compensation Data for:Chief Legal Officer/General CounselManaging AttorneysHigh Level SpecialistsSenior AttorneysAttorneys

Includes:National Data vs. Regional Data: South Atlantic Gender DataIndustry Data 4

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2013 Law Department Compensation Benchmarking Survey

South Atlantic Region

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2014 Notable Trends

• There were gains in total cash compensation for all non-managing in-house counsel categories, the most significant of which was the Attorney category which experienced an overall 7.5% gain due to a dramatic increase in bonuses.

• However, almost every managing in-house counsel category experienced a decrease in total cash compensation –except Division GCs.

• Bonuses for the CLO/General Counsel and Managing Attorney categories are on the decline, having decreased in 2012 AND 2013.

• South Atlantic Region total median cash compensation exceeded National total median cash compensation in 5 of the 7 positions ~ the exceptions were General Counsels and Deputy General Counsels, both of which were significantly below their national counterparts.

• Unfortunately, specific data for Florida was not provided.

• The highest paying industries nationally in this survey:• Manufacturing - Other• Utilities – Electric/Gas/Water• Trade – Retail• Services – Other• Mining

 

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Chief Legal Officer/General Counsel

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Definition

Heads the corporate legal function of a company.

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CLO/General Counsel Trends

• CLO/General Counsel national compensation was down last year. This was largely caused by a big hit in bonuses, which were down a 2nd year in a row (~ -18%). AND, CLO/General Counsels in the South Atlantic region made approximately -13% LESS total cash compensation (median) than their counterparts nationally.

• This is the 2nd straight year that CLO/General Counsels have seen a dramatic dip in their bonuses. Last year, CLO/GCs saw a -16% dip in bonuses.

• CLO/General Counsels admitted before 1982 (~32 years) made the most – the national median total cash compensation (base + bonus) was approx. $635K.

• 6 industries were surveyed for this job category: Services-- Other Trade--Retail Finance Insurance Services - Health Care Other Industry

• CLO/General Counsels in the Services - Other industry made the most with a national median total cash compensation of ~$794K.

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Chief Legal Officer/General Counsel

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Managing Attorneys

Definition

Usually manages/supervises a group of lawyers organized along lines of legal specialization or company functions (e.g.,

Associate General Counsel, Managing Counsel, etc.)

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Managing Attorney Trends

• A significant change for Managing Attorneys was their bonuses, which dipped approximately -7% last year. As a result, they experienced almost a -3% decrease in their overall median cash compensation.

• Managing Attorneys admitted between 2002 to 2006 made the most – the national median total cash compensation for them was ~ $283K. NOTE: This level attorney made more than other managing attorneys that were more senior to them.

• 5 industries were surveyed for this job category: Services– Other Utilities--Electric/Gas/Water Finance Insurance Services-- Health Care

• Managing Attorneys in the Services - Other industry made the most with a national median total cash compensation of $267,400, with Utilities--Electric/Gas/Water being a close 2nd at $261,100.

• Managing Attorneys in the South Atlantic region made approximately 1% MORE total cash compensation (median) than their counterparts nationally.

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Managing Attorney

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High Level Specialist

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Definition

•12+ years of experience•Generally an expert in a specific area of law and manages an important phase or function within the company’s legal group. •May train less experienced attorneys, but is not a supervisor.

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High Level Specialist Trends

• Similar to other categories, High Level Specialists took a hit on their bonuses for the 2nd year in a row– they were down almost 8.5%. However, again, thanks to increases in base compensation, the national median cash compensation was up almost 2%.

• High Level Specialists in the South Atlantic region made approximately 5% MORE total cash compensation (median) than their counterparts nationally.

• High Level Specialists with approx. 30+ years of experience (admitted 1986 or prior) made the most – the national median total cash compensation was between $248,000 to $254,000.

• 7 industries were surveyed for this job category: Mining Utilities--Electric/Gas/Water Finance Insurance Services-- Health Care Services-- Other Other Industry

• High Level Specialists in the Mining industry made the most with a national median total cash compensation of $261,300, with Utilities--Electric/Gas/Water being a close 2nd at $249,000.

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High Level Specialist

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Senior Attorney

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Definition

Attorneys with 8+ years of experience that do not manage and are not considered high-level specialists.

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Senior Attorney Trends

• Unlike many of the other categories, Senior Attorneys experienced a HUGE increase in their bonuses last year. They were down up ~34%. As a result, their national median cash compensation was up approximately 9%.

• Senior Attorneys in the South Atlantic region made approximately 7% MORE total cash compensation (median) than their counterparts nationally.

• Senior Attorneys with more than 30 years of experience (1982 JD or earlier) made the most – the national median total cash compensation was approximately $223,000.

• 10 industries were surveyed for this job category: Mining Trade--Retail Utilities-- Electric/Gas/Water Manufacturing--Other Information/Telecommunications Finance Insurance Services-- Health Care Services-- Other Other Industry

• Senior Attorneys in the Mining industry made the most with a national median total cash compensation of $178,500, with Trade - Retail being a close 2nd at $173,600.

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Senior Attorney

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Attorney

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Definition

Attorneys with 4+ years of experience that do not manage other attorneys.

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Attorney Trends

• A MAJOR CHANGE for Attorneys from 2013 was their bonuses, which increased dropped almost 2000% in 2014. This increase brought their overall total cash compensation up in 2014 by 3.5%.

• Attorneys in the South Atlantic region made almost 3% MORE total median cash compensation than their counterparts nationally.

• Attorneys with 22-24 years of experience (1992-1996 JD) made the most – the national median total cash compensation was $147,000.

• 7 industries were surveyed in this job category: Manufacturing Mining Utilities Wholesale/Retail Trade Finance/Insurance Services Other Industry

• Attorneys in the Manufacturing industry made the most with a national median total cash compensation of $163,500. 20

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Attorney

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Trend: Highest Paying Industries

Of all the industries surveyed, the ones that were paying the highest in 2014 were:

•Manufacturing – Other •Mining•Utilities: Electric/Gas/Water•Trade – Retail•Services – Other

Compare Last Year (2013):

•Manufacturing – Other •Information/Telecommunications•Chemical Manufacturing/Pharmaceuticals•Finance/Insurance

Categories/definitions are based on the North American Industry Classification System (NAICS). 22

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Trend: Gender

• In 2013 and 2014, the national total cash compensation for females in every category of in-house counsel surveyed was less than their male counterparts with only one exception – Attorneys (non-managing attorneys with 4+ years of experience).

• In 2013, the category with the biggest difference between male and female compensation was General Counsels, specifically their bonuses. Male GCs were paid median bonuses that were ~16% higher and made 6.5% more in total cash compensation than their female counterparts. This changed for the better in 2014 – female GC bonuses were up 37% from 2013, which was 1.3% more than their male counterparts.

• Bonuses were down dramatically for female Managing and Senior Attorneys (-17.68% and -15.49%, respectively) although they were up for their male counterparts. 23

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Median In-House Compensation by Gender

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How does in-house compensation compare to law firms?

• Salaries for lawyers in many large AMLAW firms throughout the country are notoriously high – for example, fresh out of law school, a first year associate’s starting base salary at an AMLAW 100 firm can range from $145,000 to $160,000 (depending on geographic location).  o Bonuses are often based on billable hours and may range from $0 to

$20,000 for a first year associate.

• In contrast, a mid- to senior-level in-house lawyer may make the same or even lower base salary as a first year associate in an AMLAW firm.

• BUT, don’t feel so bad about what you’re making! It’s important to note that, in addition to base salary, there are many “other” components of an in-house lawyer’s compensation package that many if not most law firm lawyers do not have. 

Target bonus that is not hours based (may range from 15-45%) Incentive cash compensation (which may be $0 to multiples of one’s salary) Equity or phantom stock Pension Plan (or other Defined Benefit Plan) (may be 3-8% set aside for the

employee in a retirement account) 401K matching (may be 3-8%) Cost of insurance benefits often less Free parking Gym memberships

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Top 100: General Counsels

Who are America’s best-paid General Counsels?

•Every year, ALM’s Corporate Counsel publication gathers compensation information on General Counsels from Fortune 1000 public companies’ annual proxy statements, which list the 5 highest-paid executives in the company. From that data, Corporate Counsel generates and publishes a list of the “Top 100” highly compensated General Counsels.

•This list is not exhaustive of very highly paid General Counsels since they may not always be among the top 5 highest-paid in the company and some companies files their proxy statements after the publication deadline in June.

•Nonetheless, it’s informational and a great gage of how highly paid some General Counsels are among the Fortune 1000.

•The most recent Top 100 List is 2014, which is based on 2013 cash compensation.

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Who is #1?

Who was the highest paid General Counsel?

Brackett Denniston III, General Counsel

General Electric Company

•#1 on the 2014 General Counsel Top 100

•2nd year in a row (also #1 in 2013)

•$1.65 million base salary + $4,177,000 bonus

•$5.827 million in total cash compensation

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Who are the top 10?

Here are the top ten highest-paid general counsel for 2014, according to Corporate Counsel. They are ranked based on total cash compensation for 2013, which includes salary and bonus compensation but does not reflect stock options exercised or stock value realized.

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Compensation is on the Rise for Top 100

Base Salary: Base salaries are up again! Top-paid GCs earned an average base salary of $656,607 in 2012, and went up 6.8% to $701,000 in 2013.

Bonus: Discretionary bonuses also increased and were up 8% from $1.1 million in 2012 to 1.2 in 2013.

Non-Equity Incentive Compensation: Non-equity incentive compensation rose 6.4% to almost $1.2 million in 2012 and is up again in 2013 by 6.3% to almost $1.3 million.

Equity: Here is the BIG change. In 2012, we saw the average stock award increase by a whopping 64.8% to approximately $2.3 million. However, in 2013, we saw average stock awards decrease 33.5% to 1.5 million.

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GC Compensation: Notable Trends

• Pay-for-Performance Model: Experts indicate that more companies are shifting a large part of GC’s compensation away from cash to equity, with a strong preference towards long-term equity, in an effort to align pay with performance.

• Recent growth of total GC compensation has been outpacing the growth of CEO and CFO compensation. Why?

GCs are gaining appreciation in light of needed guidance in the areas of cybersecurity risks, intellectual property litigation and new increased U.S. regulation.

• The highest paid General Counsels on the 2014 list appear to work in industries that are complex from a legal and regulatory standpoint.

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Top Industries by Total Cash

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Are you in the right industry? Top 8

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Top 100 GC Earners: Women

For the first time, Corporate Counsel broke the top 100 General Counsel cash earners down by gender.  While there were 20 women in total on the list this year, none of them broke into the top 10. And, only three made it to the top 20:

•Maryanne Lavan, Lockheed Martin Corporation (Maryland)•Amy Schulman, Pfizer Inc. (New York)•Laureen Seeger, McKesson Corporation (California)

Both Schulman, who was the best-paid female in 2013 at $2,841,900, and Seeger have since left their jobs. 

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The 10 Most-Highly Compensated Women Legal Officers

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The 10 Most-Highly Compensated Women Legal Officers

10 Most-Highly Compensated Female Legal Officers

Company Industry City State Top Legal Officer Total Cash

Pfizer Pharma & Medical Equipment New York NY Amy W. Schulman $2,841,900

Lockheed Martin Aerospace and Defense Bethesda MD Maryanne R. Lavan $2,782,438

McKesson Wholesalers San Francisco CA Laureen E. Seeger $2,563,471

Wynn Resorts Hotels, Casinos, Resorts Las Vegas NV Kim Sinatra $2,400,000

AbbVie Pharma & Medical Equipment North Chicago IL Laura J. Schumacher $2,190,000

Marathon Oil Petrol Houston TX Sylvia J. Kerrigan $2,096,487

UnitedHealth Group Insurance Minnetonka MN Marianne D. Short $1,961,538

Altria Group Tobacco Richmond VA Denise F. Keane $1,908,333

Bristol-Myers Squibb Pharma & Medical Equipment New York NY Sandra Leung $1,687,325

Campbell Soup Consumer Food and Beverages Camden NJ Ellen Oran Kaden $1,618,633

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What’s the Forecast for GC Pay?

• Whether General Counsel compensation will continue its upward trend is yet to be seen. A new survey will be released later this month (August), so we will know more then.

• Expert speculation indicates that a lot will depend on the economy and whether companies are continuing to establish their financial and business goals.

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Special Counsel: Placement Data

Below are base salaries from some recent 2014 in-house attorney placements made by Special Counsel in the Southern Atlantic Region (Florida and the Carolinas):

Assistant General Counsel (Corporate): $170,000Industry: Healthcare

2006 JD

Legal Director: $160,000Industry: Biopharmaceutical (Fortune 500)

2010 JD

Employment Litigation Counsel: $120,000Industry: Staffing

2008 JD

Corporate Counsel: $110,000Industry: Staffing

2008 JD

General Counsel: $260,000Industry: Pharmaceutical

1995 JD

Counsel: $150,000Industry: Real Estate

2004 JD

Corporate Counsel: $118,000Industry: Wireless Communications

2004 JD

Director & Assistant Counsel, Corporate Risk Management: $110,000Industry: Hospital/Healthcare

1997 JD

Corporate Counsel: $85,000Industry: Wireless Communications

2010 JD

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Valuable Sources of Information for In-House Lawyers: Social Media & Blogs

• “The lawyer who has his paralegal print his emails for him, gets all his news from the print edition of The New York Times, and thinks a blog is a smudge on his tie is part of a dying breed.” 2013 In-House Counsel New Media Engagement Survey

• While legal journals and publications in print are still valuable sources of information for lawyers, technological advancement now offers a myriad of valuable and FAST sources of information consolidated in one place … the Internet.

• More and more lawyers are using online blogs and social media as one of their primary sources of information – both getting and giving. In fact, studies have shown that attorneys are actually ahead of other professions in adopting social media.

• Kevin O’Keefe, CEO of LexBlog (www.lexblog.com) and a legal social media expert believes the idea that lawyers don’t use social media stems from the public perception that social media is limited only to sites like Facebook and Twitter. While lawyers may shy away from Twitter and Facebook, many are active users of blogs and LinkedIn. 

• “Compared to Fortune 500 companies, law firms as a whole use social media more.” For example, 62% of AMLAW 200 law firms had blogs in 2010, but only 23% of Fortune 500 companies had blogs. www.flipthemedia.com

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2013 In-House Counsel New Media Engagement Survey*

Interesting Highlights

•Naysayers are shrinking: The percentage of survey respondents not using new media tools shrunk to 27% from 43%.•News via Mobile Consumption: In-house counsel are consuming daily business media via smartphone (53%), tablets (39%) and mobile apps (23%).•Blogs Are A Preferred & Influential News Source: 55% indicate they read attorney-authored blogs, on par with blogs written by professional journalists at 54%. 53% envision hiring decisions being influenced by a well-executed blog.•Peer-Driven Rankings Yield Little Influence: Referrals from trusted sources and online biographies are more important than peer-driven rankings.•LinkedIn is Used Most.  While many attorneys are using Facebook for personal reasons, 66% report using LinkedIn for professional reasons.

*Survey published by Greentarget, Inside Counsel and Zeughauser Group. Source: http://www.myrlandmarketing.com/

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Social Media: LinkedIn

What is LinkedIn?

LinkedIn (www.LinkedIn.com) is one of the world’s largest professional networking websites for people in a variety of occupations, including in-house lawyers. It provides a directory of individuals and companies and has millions of members all over globe, including lawyers from every Fortune 500 company.

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Social Media: LinkedIn

LinkedIn has various beneficial uses:

•Professional branding – posting your career history and developments, publications and articles, certifications, academic accomplishments and degrees•A tool for your own company’s recruiting•Providing information about your company•Reconnecting with former colleagues, employers, clients, etc.•Forming “groups” where users can ask questions, seek career advice, and meet others with similar interests, backgrounds or practice groups•Tracking competitors and movements in the industry – promotions, job changes, acquisitions, mergers, etc.•Source of articles and publications•Researching people in a particular industry or practice area•Building professional relationships through introductions, correspondence and invitations to meet in person•Soliciting reviews and referrals from other users to establish yourself as an expert•Finding experts in a particular area of practice

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Social Media: LinkedIn

Relevant LinkedIn Groups for In-House Attorneys:

•Association of Corporate Counsel Chapter Groups

•Practice Groups – e.g., Patents-Intellectual Property

•In-House Counsel, a sub-group of the Corporate Lawyer Network

•In-House Law Jobs

•INHOUSE LEGAL

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Social Media: Twitter

What is Twitter?

•Twitter is an online networking and microblogging site that enables millions of users around the globe to send and read short 140-character text messages called “tweets.” While Twitter is widely known as a social networking site, more and more people are realizing that it makes a valuable professional networking and branding platform.

•The live stream of tweets (or messages) on Twitter provides continuous information to users and allows them to narrowly target (or “follow”) specific areas and people of interest.  

•MYTH: Twitter is solely for “social networking”. TRUTH: More and more professionals and companies are using Twitter as a business platform, observing their competitors and getting information quickly.

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Social Media: Twitter

Twitter can be effectively used as a professional tool for:

•News and information

Following legal news accounts or other lawyers to get fast access to legal news, articles and developments

•Branding/Marketing Tool

- Providing information about yourself: This may include branding oneself as a subject matter expert in a particular practice area through carefully crafted profiles and expert-matter tweets.

- Providing information about your company: Most major companies now have Twitter pages where they tweet information relevant to their business.

•Engaging with others

As more and more attorneys are joining Twitter, it provides them with a forum where they can ask questions and engage in conversations through live tweets – e.g., @IHLChat monthly Twitter chats for in-house lawyers.

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How many lawyers are on Twitter?

If you count only active lawyers on Twitter (assuming "active" refers to members who have posted, say, at least 50 tweets and have at least 50 followers), there are an estimated 75,000 accounts on Twitter that indicate that their owner is a lawyer.

Once you start using negative keywords to filter accounts that use these keywords incidentally, the list may drop to approximately 70,000 - 72,000 lawyers.

Source: Tom Skotidas, Founder & Director of Skotidas

www.skotidas.com.au

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Social Media: Twitter

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Social Media: Twitter

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Social Media: Twitter

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Social Media: Twitter

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Social Media: Twitter

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Social Media: Twitter

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Social Media: Twitter

Who’s on Twitter?

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Twitter & Blog Resources for Lawyers

There are quite a few resources available specifically for lawyers on Twitter and reading legal blogs:

•LexTweet: A community of Lawyers on Twitter as well as a blog network. http://www.lextweet.com

•BlawgSearch: This site offers links to lawyers blogging sorted by practice area.

•Legal Birds:  A list of legal professionals on Twitter sorted by practice area. http://legalbirds.justia.com

•GovTwit:  A directory of government agencies and officials on Twitter. http://govtwit.com/

•Legal News Feeds: Provides links to news feeds on Twitter for the latest news on various areas of law. http://www.jdsupra.com/legal-news/twitter-law-feeds.aspx

•BigLaw Lawyers on Twitter: Find lawyers from large AMLAW firms around the country who are posting information on Twitter primarily about business law topics. http://www.securitiesdocket.com/biglaw-lawyers-on-twitter/

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Staying Informed: Good Ol’ Fashioned Networking

In addition to fast and quick information that we can easily find online, another tried-and-true source of information is people –

i.e., your peers, other lawyers. What I mean, is conversing with other people, face-to-face interaction. You accomplish this

through good ol’ fashioned networking in groups or with individuals.

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Staying Informed Through Networking: ACC

What better place for in-house lawyers to network and stay informed than ACC? •The Association of Corporate Counsel (ACC) has thousands of in-house attorney members all over the world. •ACC created “chapters” in local communities to provide its members the opportunity to connect with other in-house counsel in their local areas. •The local chapters offer a variety of legal education programs, advocacy initiatives, educational events, social and professional networking events and leadership opportunities through involvement in their local chapters. •As a result, members get to know each other and have access to resources necessary for their personal and professional growth.  

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Staying Informed Through Networking: Other Professional Organizations

• In addition to ACC, There are numerous lawyers’ organizations in local communities throughout the country that are created by and for lawyers that share common backgrounds, for example:

  Young Lawyers Alumni Lawyers Women Lawyers Lawyers of the same minority group (race, religion, etc.) or

ethnicity  • Joining these organizations allows lawyers with similar backgrounds

and interests, irrespective of practice area, to meet, network and collaborate.

• They also provide a forum to exchange ideas, knowledge, experience and initiatives relevant to the individual members.

• Lawyers are often able to find these organizations by searching the Internet, contacting their local state bar associations or searching key terms on LinkedIn and Twitter.

 

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Sources of Compensation Data

• ALM’s 2013 Law Department Compensation Benchmarking Survey www.almlegalintel.com

• 2013 Corporate Counsel GC Compensation Survey www.corpcounsel.com

• Special Counsel www.specialcounsel.com

• Above The Law www.abovethelaw.com

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About Special Counsel

• National Company with offices in almost 40 markets throughout the U.S. Three offices in Florida:

• Jacksonville• Orlando• Fort Lauderdale• Miami

• We specialize in the search and placement of professionals in the legal industry, both attorneys and non-attorneys.

• Placements of attorneys and non-attorneys in corporations account for almost 40% of our permanent placement business.

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Thank you