According to the Association of Corporate Counsel, only 11 percent of corporate attorneys practice in-house. But such positions exert a powerful pull on other practitioners: freedom from the tyranny of the billable hour, and the possibility of getting rich from stock options.
Last May, for instance, LinkedIn's GC Erika Rottenberg sold 30,000 of her shares in the company for $1.35 million after its successful initial public offering. Not bad for a general counsel who joined the start-up just three years earlier. And Rottenberg still owns shares and options worth another $27 million. Michael R. Jacobson, general counsel for the online auctioneer eBay, exercised his option on 60,000 shares three months ago, selling them for $1.8 million.
On average, of course, in-house attorneys earn less than their law firm counterparts. A 2005 report by the ACC says that's because of lower entry-level salaries, and the absence of partnership draws on equity ownership. And stock options, the report cautions, are now rarely extended.
Still, there are significant exceptions, influenced by a company's size, industry sector, and location, and the lawyer's status. According to the Equilar 2009 Top 25 Survey, median pay for GCs at companies with more than $20 billion in revenue was $2.3 million - three times the median at companies with revenue below $5 billion. General counsel employed in the West or Northeast are paid more than those in the Midwest or South. Those who work in technology, media, or telecommunications receive more than those in other sectors, despite those companies' relatively low median revenue. And general counsel who report directly to CEOs have a median income of $1.3 million, or 46 percent higher than that of in-house counsel lower down the food chain.
In Southern California, GCs had a median base pay of $223,418 last year, and 68 percent of them got bonuses (average: $108,733), the ACC's regional chapter there reported in its 2011 In House Counsel Compensation Survey. Median base pay for all in-house lawyers in Southern California was $173,233, the survey found, and 76 percent received bonuses that averaged $43,838. Male lawyers were paid 23 percent more than female lawyers last year. The report also found that most in-house counsel in SoCal are not eligible for guaranteed severance benefits upon termination, even as the job market there for such attorneys is flat, or contracting.