Fortune magazine cites the recent pay survey conducted by the publication Corporate Counsel as heralding a fresh round of big-business belt tightening, predicting that the ‘pain’ senior in-house lawyers are feeling today will spread to chief executives tomorrow.

Nose dive

The survey points out that the nearly 29 per cent rise in cash bonuses doled out on average to general counsel in 2010 more than dried up last year, nose diving by nearly 8 per cent to an average of $1.13 million. Analysts explain the volte-face in remuneration by simply claiming that the sector misjudged the economic climate by assuming a recovering was rolling along when it clearly was still stalled.
‘The drop reflects the retrenchment in the larger economy,’ James Wilber, of legal sector specialist consultants Altman-Weil told the magazine. ‘You saw significant compensation increases in 2010 because people thought the recovery was beginning, and issues like what is happening in Europe were not even on the radar. Now it is becoming common to see companies giving less guaranteed money.’
The report and the survey point out that last year corporate counsel salaries slumped by 1.8 per cent to an average of $611,411. But cash wasn’t the only part of remuneration deals that was shrinking – average stock awards for top in-house lawyers dropped by nearly 11 per cent to $1.43 million, with, according to the survey, average stock options for in-house teams generally plummeting by nearly 19 per cent to $732,453.

Belt tightening

To highlight the changing environment, Corporate Counsel magazine makes Charles Kalil --general counsel at global giant Dow Chemical – the poster boy for belt tightening. In the previous survey, Mr Kalil took home a total pay packet of $2.67 million. But sadly for the lawyer – and whichever brand of sports car is his manufacturer of choice – that remuneration deal sank to $1.56m in 2011, the direct result, according to the magazine, of a $1m cut in bonus.
Still, as Fortune says, there won’t be many in main street USA shedding tears for the Dow man or any of the country’s top in-house players. ‘Top company lawyers,’ writes the magazine’s Elizabeth Olson, ‘make great money.’