To provide additional perspective on the trends uncovered in General Counsel Pay Trends, Equilar sat down with John Gilmore, Co-Founder and Managing Partner at BarkerGilmore. Mr. Gilmore discussed the expansion of the General Counsel position and the traits that make for a successful candidate.
Beyond the Numbers
2023 has been an outstanding year for in-house lawyers and executive search consultants, but it certainly has not been easy either. As predicted in last year’s compensation report, the demand for General Counsel has been robust since January and is now picking up steam as incumbents announce year-end retirements. However, the year started out soft for mid to senior-level lawyers as companies braced for a much-hyped recession. By the second quarter, hiring for counsel-level positions returned to normal as corporate leaders successfully maneuvered through interest rate hikes and recession fears quelled.
Becoming an Equilar 500 General Counsel is an incredible feat. Only the most gifted, talented and humble lawyers will succeed in the role for the long term. The quest for this position is attempted by thousands every year and a very small fraction experience the thrill of victory. Success requires high intellect, years of strategic preparation and planning, mentorship from others who have prevailed, mental and physical stamina, sound judgment, business savvy and near-perfect emotional intelligence. For many lawyers, throwing their hat in the ring for a General Counsel search and reaching the finish line is daunting—a time-consuming and exhausting experience.
It isn’t that corporate leaders have turned the hiring process into an extended endurance test simply to determine if their finalist is worthy of serving as a member of the senior leadership team. Boards and CEOs are resolute about the new General Counsel being a perfect cultural match, able to seamlessly serve in a dual role as a legal and business executive, uniquely capable of tackling the bet-the-company matters one will inevitably encounter throughout their tenure and skilled in leading and developing others. An appetite for diversity and lawyers who are board-tested, not board-ready, also narrows the candidate pool. The pressure to get it right has led to more intense and frequent rounds of interviews than candidates appreciate. One Equilar 500 CEO claimed that hiring the General Counsel is an “irrevocable decision” and there is no margin for error. In the end, a decision is reached to promote from within or take a risk on hiring from outside. In either case, after being named General Counsel the pressure is immediately on—time to get it right!
A Deep Dive: The Complexities of the General Counsel Position
Year after year, discussions are focused on the evolution of the role of the General Counsel. The individuals most qualified for the role have a history throughout their careers of continually advancing the depth and breadth of knowledge, skills and overall responsibility, in and outside of legal. For top-performing General Counsel, the drive for continuous learning and desire to take on new challenges never diminishes, even after achieving the position. This innate characteristic is critically important as the world and the challenges General Counsel are called upon to face are constantly in flux. When asking General Counsel what a typical day is like, most smile and comment that no two days are ever the same.
Kristin Campbell, former General Counsel for Hilton Hotels, and the newest Advisor to join the BarkerGilmore team, offered the following observation of the General Counsel’s role:
Boards of directors in today’s public companies are facing unprecedented pressures. Investor demand for improved quarterly financial performance remains great, activism is strong, legal and regulatory changes are driving higher levels of disclosure and compliance, and geopolitical crises and social activism have created additional business and reputational complexities for companies to manage. And that’s on a good day. A tough day for the General Counsel, and hence the board, is when a sudden change of the executive team is required due to, for instance, a scandal. Or maybe a cyber breach occurs, or a regulatory investigation is announced. Or perhaps the CEO/co-board member wants to engage in cage-fighting. With these challenges comes the opportunity to demonstrate how the law department, the General Counsel and board are performing.
Today’s General Counsel proudly serve as collaborative members of the executive leadership team (ELT), however; the position is unique and requires a delicate balance of judgment and execution. Most often, the General Counsel reports simultaneously to the CEO and the board. Boards expect to be informed if CEOs are out of line and CEOs expect General Counsel to always have their back. While sitting around the table together, other members of the ELT may regularly attempt to stretch the limit of regulatory boundaries. General Counsel are expected to always be the voice of reason and many times are called upon to act as the parent in the room.
Another BarkerGilmore Advisor who recently retired after spending twenty years as a General Counsel referred to the General Counsel role as a “Checkmate” position. Reporting structure and stature afford the General Counsel the option to play a “checkmate card” to disallow a specific action from occurring. Since CEOs don’t like being told no, the General Counsel and CEO’s risk tolerance must be aligned, and a skittish General Counsel is rarely tolerated. As General Counsel gain greater experience and have deeper understanding of the business, their ability strengthens to serve as strategic partners and devise creative solutions for the business. That same BarkerGilmore Advisor went on to say in twenty years serving as General Counsel, the checkmate card was rarely played and never disregarded by the CEO—the sign of a successful relationship.
While no two Equilar 500 General Counsel searches are alike, the baseline requirements for most include: top law school, good foundation of private practice, reputation for leading and developing a high-performance law department, stable career progression and ability to navigate a board. These criteria only gain someone consideration for the opportunity. A General Counsel gets hired from a long list of criteria not found on a resume—gravitas, emotional intelligence, cultural fit, chemistry and business expertise. Most CEOs of large companies seek several years of proven experience as a sitting General Counsel, but there can be exceptions for the right first-time candidate. In 2022 and 2023, several Equilar 500 General Counsel were hired out of retirement, most in their 60s, as CEOs were unwilling to risk hiring less seasoned candidates. A diverse slate of candidates is required for every search; however, only the most qualified and best cultural fit is hired. Today, there is increased opportunity for men, women and lawyers from other underrepresented groups.
There are many paths leading to an Equilar 500 General Counsel but all require patience and dedication. For many, the journey starts by advancing through the ranks of a large corporate law department and earning the seat as an internal successor. Others leverage law firm and/or in-house experience to secure a General Counsel position with a private company, private equity portfolio company or smaller public company. Having proven your ability to serve as a strategic partner to a CEO and board, you are now a much more attractive candidate for larger companies.
It is challenging to compare one General Counsel compensation to another, since each has different levels of responsibility. When benchmarking against peer compensation, it requires a deeper dive to understand the bigger picture of the role being played and the form of compensation being reported:
- Some General Counsel are being compensated for their contributions outside of legal, which could include human resources, ESG, government relations, government affairs, corporate development, safety, security, compliance, among others. General Counsel are one of the first members of the ELT to take on additional responsibilities due to strategic abilities, business acumen and the close ties between legal and every other area of the company.
- Total reported compensation for newly hired General Counsel will include cash or equity sign-on bonuses which are intended to offset cash bonuses or unvested equity the new hire is leaving behind.
- Starting compensation is negotiable, depending on the overall experience someone brings to the table. A first-time General Counsel can expect to receive less than a seasoned veteran. Based on the value the General Counsel brings to the company and the increased responsibilities over time, compensation can accelerate quickly.
- The General Counsel’s industry also affects compensation. In the last five years, the communication services, technology and basic materials services have had the largest compensation increases. In contrast, compensation in the consumer cyclical, healthcare and financial services sectors have seen the smallest changes.
There are no certainties about becoming a General Counsel. New business demands, regulations, unforeseen litigation or personnel matters can quickly derail a law department budget, and changes in leadership and company ownership add unexpected obstacles to overcome. That said, General Counsel love the impactful role they play, and the number of people vying for their position will not diminish.
To view the full study, download the 2023 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.
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