Senior in-house lawyers' earnings jump Â£8K
Preference for basic salaries, not bonuses, drives growth in total pay packages
Senior in-house lawyers' pay has risen by £8,130 this year, meaning total average earnings now stand at £165,190, new research has shown.
The 5 per cent rise has been driven by a significant increase in basic salaries for senior in-housers over the last 12 months, rather than bonuses. Between 2015 and 2016, basic pay increased by 12 per cent from £112,920 to £126,100.
However, bonuses have shrunk. In 2015, the typical senior in-house lawyer commanded a bonus at 39 per cent of basic salary, or £44,130. This year the average senior in-house solicitor received a bonus of 31 per cent of basic salary, or £39,090.
Despite this, the average bonus remains higher than the £31,500 reported in 2014. Some 72 per cent of senior in-housers are set to receive a bonus this year. This means lawyers are going to share a massive £570m bonus pot, based on Law Society figures on the number of solicitors working for commercial organisations.
However, this is 9 per cent less than the £623m pot taken home last year, when 70 per cent of senior in-house lawyers received a bonus.
Salaries for senior lawyers are significantly larger than those taken home by UK accountants. The average remuneration is more than double the average accountants' total earnings of £78,010. This is also nearly six times the size of the average £27,600 salary.
Clare Butler, global managing director at recruiter Laurence Simons, explained that the high spending on salaries was not merely corporates 'splashing the cash', but instead represented a structural shift in the approach to the provision of legal services.
'While legal is mission critical, most corporates don't have huge budgets to spend on elite firms. The result of this is a greater focus on building stronger and broader in-house teams, which means recruiting lawyers from private practice at a premium,' she said.
'As a result of this competition, salaries for senior in-house lawyers are increasing. While a big salary for an experienced lawyer is a significant outlay, it is an important investment that can save a company huge amounts of money in fees and costs.'
Butler added that the paradigm shift in the provision of legal services has had a knock on effect with pronounced demand for a more predictable and stable income that isn't tied to company performance.
'With demand in their favour, they're in a strong position to not only dictate how much they are paid, but also the structure of their remuneration.'
While senior lawyers are well-paid, the research reveals that money is not necessarily their primary motivation in the workplace. According to Laurence Simon's research, 29 per cent of lawyers reported leaving their previous job for better career development prospects.
Meanwhile, 22 per cent reported leaving for a better salary, and 11 per cent for better bonus prospects. A further 15 per cent moved for both a better work-life balance and a better cultural fit.
However, lawyers also reportedly looked for a premium of £22,700 when moving jobs, which equals 18 per cent of their basic salary. This premium has remained broadly flat since the end of the recession.
The number of lawyers who would consider moving is also on the rise, with 76 per cent either potentially or definitely open to a move, up from 72 per cent last year. Of these, 28 per cent said they were actively looking for a job. Another 48 per cent would be willing to move if the right opportunity came along.
'While an improved package is instrumental to lawyers when it comes to moving jobs, career development remains their priority,' said Butler.
'HR teams looking to retain their best talent this year should be aware that impressive salaries alone will not allow them to keep hold of their high performers in an increasingly competitive market; even the most senior of lawyers want to feel like they are growing in a role.
'There is clearly an appetite among senior in-house lawyers for a move this year too, with fewer willing to rule out a move compared to a year ago.'