Competition lowers salary bar for in-house lawyers

/ Posted in Featured Articles, News & Events

Original article – Business In Vancouver

BC’s smaller share of Canadian head offices has kept the salaries of in-house legal counsel below the national average.

According to the third compensation and career survey commissioned by the Counsel Network and the Canadian Corporate Counsel Association, in-house lawyers in B.C. earn about $145,000 a year, roughly 7% below the national average of 155,000.

Alice Toal, a Vancouver director at the Counsel Network, suggested this is because one of the largest employers of in-house legal counsel is government rather than the private sector.

“Anecdotally, what tends to skew the numbers in B.C. is you have a high proportion of legal counsel in government, because we don’t have a lot of head offices here.”

Toal estimated that more than half of all in-house counsel positions in B.C. are in the public sector.

According to the survey, government and financial services are near the bottom of the average pay scale by industry. Toal noted that better benefits and a pensions usually help compensate government workers for those lower wages, but, nevertheless, government counsel salaries have fallen about $7,000 in the past two years.

Nationally, the highest paid in-house counsel were in the IT ($184,000) and oil and gas ($178,000) sectors, followed by those in the resource sector. These sectors also saw the largest salary increases – up more than $18,000 on average since 2010.

In-house lawyers in Metro Vancouver, with its concentration of private-sector activity, fare best. Their average income is $153,000. However, despite the region having more than 1,200 publicly traded mining companies, Toal noted that most have very small in-house legal departments with general counsel usually at the director or executive level.

The rest of the work is generally outsourced to private-practice firms whose lawyers generally bill by the hour.

The survey noted that executive-level general counsels in B.C. were the only ones to suffer a drop in average base salary to $183,500 from $194,000 in 2010. But that has been offset by other types of compensation.

The survey noted that nearly half of the in-house counsel in public traded companies have become eligible for long-term incentive plans. That’s up from 42% in 2010. More than 60% of executive general counsels have stock options.

With a smaller head-office base, lawyers looking to gain an in-house position also face far more competition, which drives down salaries. The survey noted that fewer B.C. in-house counsel received salary increases over the past year while 20% had their salaries frozen, compared with 14% nationally. B.C. counsels were also the only ones in the country that reported an increase in out-of-pocket costs for their benefits.

Overall, in-house lawyers remain the most satisfied about their work-life balance, particularly those under the age of 35. While in-house counsel are generally paid higher salaries based on their experience in private practice, Toal said more younger lawyers are finding jobs as more companies expand their in-house legal departments to offset the costs of outsourcing legal work.

“More in-house departments are hiring more junior legal counsel then ever before.” •

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