In HBR's annual survey, which aims to help companies align attorney compensation against broader legal industry benchmarks in order to stay competitive, 78 per cent of companies reported increasing their budget for legal department compensation in 2015 as they trim outside counsel costs by bringing legal work in-house and hiring more staff. This has translated into a base salary increase of 4.6 per cent and total compensation increase of 3.5 per cent for attorneys of all levels compared with 2014.
Slower growth
While a modest increase was recorded across all types of compensation for in-house counsel, the rate of growth was notably slower than in 2014. Last year, the average increase in total compensation was recorded at 6.3 per cent, now down to a 3.5 per cent increase for both total compensation and total cash compensation. The recorded average increase in cash bonuses for in-house legal staff was also down, from 21.1 per cent last year to 14.5 per cent in this year's results. The only compensation category to enjoy faster growth this year than last was base salary, up from 3.3 per cent growth in 2014.
'Strategically leverage in-house resources'
This year's results reflect the enduring impact of long-term incentives and bonuses on total compensation. However, HBR's Law Department Consulting Group senior director Lauren Chung maintains that the survey results should be cause for optimism. 'Although annual cash compensation has only grown slightly, it's a testament to law departments' ability to strategically leverage their in-house resources and personnel', Ms Chung commented. 'With a 3.5 per cent increase [in total compensation], it's outpacing inflation and salaries continue to grow at a steady pace year over year.' Sources: Business Wire; HBR Consulting
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