2022 General Counsel Compensation Report: Commentary from John Gilmore, BarkerGilmore

To provide additional perspective on the trends uncovered in General Counsel Pay Trends, Equilar spoke with contributor John Gilmore, Co-Founder and Managing Partner at BarkerGilmore.

With the world facing a challenging period across a number of fronts, including high inflation levels, high gas prices and the conflict in Ukraine, what role does the General Counsel play in mitigating risk for a company related to uncertainty?

The world is faced with uncertainty — health crises, political unrest, inflation and recession fears, environmental impact, and social injustice have created the perfect storm for General Counsel to make a significant impact. With highlighted attention to risk management, General Counsel are expected to see around corners to anticipate and mitigate risk across the enterprise. Prior to the COVID-19 pandemic, issues such as data privacy and security, IP theft, M&A, class action litigation, internal investigations, and regulatory concerns—to name a few examples—consumed the risk landscape. Today, managing risk is the equivalent of drinking from a fire hose as unexpected domestic and international issues have had a compound effect on what was already a full plate. The good news is that General Counsel are trained to work in gray areas and to be comfortable making decisions that deal with the novel circumstances faced in today’s world. With a combination of pristine judgment, legal capabilities, financial acumen and high emotional intelligence, General Counsel are uniquely equipped to analyze matters and ask the right questions to guide the executive leadership team toward a winning strategy.

One noteworthy action item from 2022 which has received little recognition is the immediate response taken to ensure the safety of employees and their families residing in Ukraine and Russia at the onset of the Ukraine invasion. The care and safe evacuation of employees quickly became the top priority of many GC as they partnered with human resources to keep a finger on the pulse of every move made abroad and within the United States. As plans were set into motion to move people out of harm’s way, government sanctions captured the attention of legal departments, requiring General Counsel to spearhead adjustments to business practices and compliance programs. Sanctions’ risk could only be minimized through collaboration with internal business teams, vendors, suppliers and customers, requiring constant assessment and monitoring of continually evolving sanction policies.

What are some factors that might impact compensation for General Counsel in the near future? How does that affect the recruiting perspective?

If inflation persists and a recession materializes, the short-term total compensation for most General Counsel will be negatively impacted as annual cash bonuses and long-term incentive awards are typically tied to EBITDA. Since General Counsel are viewed as critical members of the senior leadership team, the position cannot go vacant; the demand for General Counsel will persist even in an economic downturn. However, there would be a reduction in hiring activity for specialized mid-level and senior counsel-level lawyers. As these positions are vacated due to resignation or retirement, and companies are faced with headcount reduction, replacements can be put on hold. Other in-house lawyers will be tasked to complete the work left behind and/or outside counsel will be engaged.

Working as an executive search consultant through three recessions, 1990, 2001 and the financial downturn from 2007 to 2009, the recruiting process for executive-level leadership remains consistent and disciplined. The critical element to attracting top talent is an understanding of the long-term opportunity. Since successful General Counsel are forward-thinking, attracting an exceptional finalist is never a problem, in good times and bad. A collaborative leadership team, sophisticated board, ability to make an impact on the business, passion for the product or service offered, a strong company culture and opportunity for future growth are the key components necessary to motivate a General Counsel to join a company. While important to be compensated fairly and in line with others on the executive team, money is most often not the attraction. Executive search consultants are relied upon for access to unmatched networks of diverse talent and finely tuned assessment capabilities to ensure a finalist is equipped to serve as a strategic advisor and will thrive within the company culture. Even if an internal successor is prepared to take on the role, CEOs and board members insist on benchmarking this candidate against outside talent. There are remarkable, business-minded lawyers out there, and it pays to consider all options. The partnership and alignment between an executive search consultant and the client making the hire is imperative to a successful outcome. The short answer to your question is: we are not predicting a downturn in the need for General Counsel in the year ahead.

To view the full study, download the 2022 General Counsel Compensation Report, a publication by Equilar with commentary from BarkerGilmore.

John Gilmore is co-founder and Managing Partner of BarkerGilmore with over three decades of executive search experience. John has developed trusted relationships with General Counsel and C-suite leaders across the country. He has unfettered access to the extraordinary talent they seek and an innate ability to quickly identify a substantive and cultural match. With a profound institutional understanding of how in-house legal and compliance departments function most effectively, John has earned a reputation as one of the top executive search consultants for General Counsel and Chief Compliance Officer placements.