To provide additional perspective on the trends uncovered in Equilar’s General Counsel Pay Trends, Hunt Scanlon spoke with contributor John Gilmore, Co-Founder and Managing Partner at BarkerGilmore.
What are some of the biggest challenges facing General Counsels today?
GCs continue to face challenges such as data privacy and security, regulatory and compliance, corporate governance, and intellectual property – but 2022 has brought some new challenges to the table.
First, talent retention and acquisition have become a challenge for most GCs. With compensation on the rise, many GCs have budget restrictions preventing increases in compensation for those on the team and instituting limits on how much can be allocated to hire outside talent. With limited potential to increase employee compensation, many are seeing resignations as members of the law department receive offers which cannot be matched. The shortage of lawyers with the right experience and leadership capabilities has put pressure on GCs to offer higher compensation in order to acquire and maintain the right talent to serve the business. An increased attention to diversity has made hiring even more challenging as the competition is fierce. Since legal and business issues are more complex than ever, GCs need to create solutions when throwing more bodies at a problem is not a possible option.
The second challenge is legal operations, i.e., streamlining the law department and improving efficiencies. With concerns that the law department may be perceived as a cost center versus a profit center, GCs are focused on improving efficiencies through the implementation of technology (AI, contract management systems, etc.) and showcasing the law department’s value and ROI through metrics using language to which the business partners can relate. Fostering lawyers to both earn the trust of the business and be viewed as a strategic advisor is a daily ritual.
Finally, what keeps GCs up at night is the unknown. The GC is required to expect the unexpected. However, many GCs feel understaffed, and missing a small detail involving privacy & security, government regulations, ethics & compliance, litigation, IP, diligence on an impending transaction, etc. can be detrimental.
How have GCs progressed to the senior leadership ranks?
GCs today have earned a seat at the table, not as practice area experts, but as members of the executive team. The effective GC must speak regarding executive, sales, finance, people management, regulatory, compliance, politics, risk management, and law across distinct cultures and jurisdictions. This skill requires unique emotional intelligence, intellectual flexibility, and courage that is not required of similar roles within the corporate hierarchy. To demonstrate leadership under those circumstances is both necessary and critical to managing the GC function well. It is also an enormous challenge.
How has GC compensation risen in recent years?
From 2017 to 2021, the total median GC compensation of the Equilar 500 has risen 25% from $2.474M to $3.088M. GC compensation from 2019 to 2020 was flat, and understandably so given that Covid had caused so many uncertainties. Companies responded in 2021 by increasing stock awards by 27.9%. Cash performance awards grew by 19.4%. Feedback from business partners has shown value combined with the availability of compensation market data have enabled more frequent and productive compensation discussions between the CEO and Compensation Committee. Additionally, as hiring manager, the rising compensation for members of law departments has also increased GC compensation.
How does that affect the recruiting perspective?
While the high compensation associated with GC opportunities is certainly attractive, it ultimately is not the primary consideration for recruited candidates. A collaborative leadership team, sophisticated board, ability to make an impact on the business, passion for the product or service offered, strong company culture, and opportunity for future growth are the key components necessary to motivate a General Counsel to join a company. While it is important to be compensated fairly and in line with others on the executive team, total compensation rarely impacts our ability to attract a diverse slate of top candidates for any GC search.
Explain how diversity within the role has progressed.
Diversity is a priority for most companies; however, the role is only filled with a lawyer who is well-equipped to serve as a member of the senior leadership team. Today, 35% of Equilar 500 General Counsel are women compared to 23% in 2017. Succession planning is a priority for good GCs. As women and other underrepresented lawyers are promoted or hired into leadership roles in the law department and groomed to become GC, this gap will close further.
How does your firm provide a diverse slate of candidates?
BarkerGilmore has been committed to diversity since the company’s inception. In 2021, 69% of all placements made by the firm were women or underrepresented lawyers. The firm actively supports most legal affinity groups, and many members of the advisor team have served on the boards of these organizations.
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.
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