Law departments are starting to face a sellers' market in hiring for new and replacement positions, a trend reflected in compensation surveys. With potential hires more likely to be wooed by the assurance of a high salary than the potential of a large bonus, compensation at the top levels is shifting to the salary side.

That's one explanation for why the 2006 Altman Weil Law Department Compensation Survey found corporations increasing salaries for management attorneys while bonuses at the highest levels actually went down.

“This tends to reflect that the talent market is shifting toward a sellers' market,” says Altman Weil principal James Wilber. “Companies have to front-load the money because people want guaranteed cash, not promised cash.”

The survey found salaries up 8 percent for chief legal officers/general counsel; up 3.2 percent for deputy chief legal officers/general counsel; up 7.1 percent for division general counsel; and up 7 percent for managing attorneys. Median bonuses were down 5.6 percent for CLOs/GCs; and down 7.6 percent for deputy CLO/GCs; but up 20.3 percent for division general counsel and up 25.3 percent for managing attorneys.

Another explanation lies in the way salaries and bonuses have been distributed through departments over the past several years. According to Wilber, compensation bottomed out after 2001. Around 2003, as corporate confidence rebounded, CLO/GCs and their deputies were rewarded. Now the lower levels are starting to catch up.

“Last year, salaries rose slightly, augmented by big bonuses at the top levels of the legal department,” Wilber says. “This year we are seeing bigger salary increases reflecting greater corporate confidence, along with a mixed bag of bonuses at different staff levels that seem designed to catch up some of the more junior in-house positions that were overlooked in past years.”

Wilber predicts a continuing uptrend of law department salaries.

“Law firms are raising their salaries, and that is putting pressure on law departments,” he says. “I expect to see an adjustment up in law department salaries this year.”

For more compensation comparisons, watch for the 2007 Comp Report in the April issue of InsideCounsel. The article reports selected results from the 2006 Hildebrandt International Law Department Survey; Mercer Human Resource Consulting's 2006 Finance, Accounting and Legal Survey; and the 2006 Altman Weil Law Department Compensation Benchmarking Survey.

Law departments are starting to face a sellers' market in hiring for new and replacement positions, a trend reflected in compensation surveys. With potential hires more likely to be wooed by the assurance of a high salary than the potential of a large bonus, compensation at the top levels is shifting to the salary side.

That's one explanation for why the 2006 Altman Weil Law Department Compensation Survey found corporations increasing salaries for management attorneys while bonuses at the highest levels actually went down.

“This tends to reflect that the talent market is shifting toward a sellers' market,” says Altman Weil principal James Wilber. “Companies have to front-load the money because people want guaranteed cash, not promised cash.”

The survey found salaries up 8 percent for chief legal officers/general counsel; up 3.2 percent for deputy chief legal officers/general counsel; up 7.1 percent for division general counsel; and up 7 percent for managing attorneys. Median bonuses were down 5.6 percent for CLOs/GCs; and down 7.6 percent for deputy CLO/GCs; but up 20.3 percent for division general counsel and up 25.3 percent for managing attorneys.

Another explanation lies in the way salaries and bonuses have been distributed through departments over the past several years. According to Wilber, compensation bottomed out after 2001. Around 2003, as corporate confidence rebounded, CLO/GCs and their deputies were rewarded. Now the lower levels are starting to catch up.

“Last year, salaries rose slightly, augmented by big bonuses at the top levels of the legal department,” Wilber says. “This year we are seeing bigger salary increases reflecting greater corporate confidence, along with a mixed bag of bonuses at different staff levels that seem designed to catch up some of the more junior in-house positions that were overlooked in past years.”

Wilber predicts a continuing uptrend of law department salaries.

“Law firms are raising their salaries, and that is putting pressure on law departments,” he says. “I expect to see an adjustment up in law department salaries this year.”

For more compensation comparisons, watch for the 2007 Comp Report in the April issue of InsideCounsel. The article reports selected results from the 2006 Hildebrandt International Law Department Survey; Mercer Human Resource Consulting's 2006 Finance, Accounting and Legal Survey; and the 2006 Altman Weil Law Department Compensation Benchmarking Survey.