- A recent report by Equilar gathered information on how much general counsel (GCs) are paid in various sectors, including financial services and technology.
- In-house lawyers in the highly regulated healthcare sector raked in the most, earning a median of $4.55 million in 2019. GCs in communications services and the energy sector followed suit.
- There’s been an overall growth in GC compensation over the past five fiscal years, pointing to the evolving role that top lawyers play in companies.
- Visit Business Insider’s homepage for more stories.
It looks like it’s a good time to be an in-house lawyer.
Information services firm, Equilar, peeled back the curtains on how much general counsel at companies are paid across different industries, from tech to real estate in an August report.
Lawyers working in the highly regulated healthcare sector topped the list, raking in a median of $4.55 million in 2019 — an increase of 14% from $3.99 million in 2018.
In addition to laying out GC compensation across industry sectors, the report found that male GCs earned 12% more than their female counterparts, despite the fact that more women occupy these roles.
It also found that pay declines as tenure rises, suggesting that “the General Counsel appears to be an executive position in which remaining at a company long-term limits earning potential.”
The General Counsel Pay Trends report analyzes compensation figures disclosed in the SEC filings of the Equilar 500 for the last five fiscal years. (The Equilar 500 consists of the “500 largest, by reported revenue, US-headquartered companies that trade on one of the three major US stock exchanges.”)
General counsel compensation across sectors
Median pay for GCs in healthcare, which was higher than those of lawyers in other sectors, has seen steady growth over the past five years. Nearly half of the compensation comprised of performance incentives, while only about 15% was the actual base salary. Bonuses, option awards, and stock awards make up the remainder of compensation.
After healthcare, in-house lawyers in communications services ranked second when it came to highest median pay at $4.05 million, followed by the energy sector at $3.69 million.
And, while the financial services and real estate sectors both saw large gains in 2018, both declined slightly in 2019 at $2.8 million and $3.2 million, respectively. GCs in technology reported a median compensation of $3.3 million last year.
Here’s the breakdown of median total compensation for Equilar 500 in-house lawyers by industry in 2019, in descending order:
- Healthcare: $4.55 million
- Communications services: $4.05 million
- Energy: $3.69 million
- Technology: $3.34 million
- Real estate: $3.21 million
- Consumer defensive: $2.94 million
- Financial services: $2.84 million
- Basic materials: $2.82 million
- Utilities: $2.30 million
- Consumer cyclical: $2.08 million
- Industrials: $2.07 million
Overall, there’s been a growth in how much top lawyers at companies are paid across industries, according to the report. The median annual compensation for GCs at the Equilar 500 was $2.65 million in 2019, which represents an 11% increase from the previous year.
This trend aligns with the 9% increase in the number of GCs with reported compensation in the Equilar 500, suggesting that “the General Counsel role is rising in rank among the top-paid officers in a company,” per the report.
Evolving in-house legal roles in recent years
The sweeping growth in GC compensation illustrates the growth of the in-house legal role over time.
“The General Counsel is no longer limited to the role of the legal watchdog who oversees litigation, but rather plays a pivotal role in corporate decision-making,” the report stated.
According to the report, the crucial role that in-house lawyers play in their companies has only heightened with “the current business climate and the COVID-19 crisis,” as GCs have to manage greater risk and also offer more strategic advice.
Indeed, the number of GC appointments rebounded to normal this summer after dismal numbers at the height of the pandemic in the spring, as reported in Law.com.
Deborah Marson, the general counsel of information management company, Iron Mountain, told Business Insider that in-house lawyers have taken on more responsibilities — everything ranging from regulatory compliance and privacy work, to corporate transactions and environmental, social, and corporate governance.
“Our work touches so many aspects of the company,” Marson said, describing how GCs are “uniquely positioned” for both their knowledge of black-letter law and their ability to be good problem solvers who can work alongside company executives.
“It’s how we really drive value for the company,” she added.