The study showed that salaries for in-house counsel grew slightly over the past year with the average year-over-year increase in total compensation (base salary, cash bonus and long-term incentives) across all lawyer levels at 3.5 per cent, down slightly from the 3.7 per cent increase reported last year. The average total compensation of an in-house lawyers is $321,000, according to HBR’s survey. Of the surveyed companies, 66 per cent reported an increase in spending on law department compensation and benefits. This finding supports the core spending metrics in the overall HBR Law Department Survey, which revealed that total internal legal spend is up 4 per cent while outside counsel spending has remained flat over the past year.

Increasing focus on legal talent

As organisations continue to rely on internal legal staff to support increased legal demands, they have strived to align law department compensation packages with industry benchmarks, the survey suggested. ‘The survey reports a healthy growth in compensation for in-house lawyers across staff levels,’ said Lauren Chung, Managing Director and survey editor for HBR. ‘This points to an increasing focus among leading law departments on legal talent development and management.’

Need competitive compensation

HBR’s Law Department Survey measures the growth in total compensation across all lawyer levels, as well as the three components that comprise it - base salary, cash bonuses and long-term incentives. All four saw growth over the past year.  As previously noted, total compensation increased by an average of 3.5 per cent. Base salaries rose 3.2 per cent year-over-year, down slightly from the 2016 results which found a 3.3 per cent increase. Cash bonuses increased by an average of 8.5 per cent, down from 9.7 per cent last year. The average increase in total cash compensation (base salary plus cash bonuses) for all lawyer levels was up 3.2 per cent, a slight decrease from the 3.4 per cent increase in 2016. ‘Nearly half (43 per cent) of organisations reported an increase in in-house lawyers to accommodate growing workloads,’ Mr Chung added. “As law departments continue to lean on internal legal staff, they need to be competitive and align compensation packages with industry benchmarks tailored for the in-house market.’

About the survey

The annual HBR Law Department Survey includes a total of 300 participants representing over 20 industries. HBR Consulting’s Survey focuses on larger law departments and includes both global and US law departments.