John Gilmore provides additional perspective on the trends uncovered in Equilar’s General Counsel Pay Trends Report.
How did the uncertainty and unpredictability of COVID-19 affect the General Counsel role in 2020 and into 2021? How did these trends vary across industry sectors, and for what reasons?
The past two years provided formidable challenges for General Counsel, Executive Leadership Teams (ELT), boards, and business leaders. When asking GCs to look back and assess where they provided the greatest value, the answer in most cases is simply staying positive and instilling confidence and trust with those inside and outside of the company with a “we’ll get through this” attitude. The call-to-action in March 2020 was swift and grueling. Exhaustive efforts were made to reposition products, services, assets, debts, commercial contracts, and employees as a means of survival. GCs stood up to the challenge, allowing businesses to stabilize and valuations to bounce well past pre-pandemic levels.
Today, General Counsel have assumed a much greater workload, especially with regard to risk management. The volume and complexity of matters requiring their attention have grown significantly, and the devastating potential to business has added to the stress level of the job. Increased prioritization of matters related to data privacy and security, software and systems integration, supply chain, regulatory, and human resources are just a few of many highlighted concerns.
General Counsel are also unlike any other member of the executive team in that they serve as a trusted advisor to the CEO. CEOs take advantage of confidentiality and speak openly with them on all topics. As a result, GCs must be nimble, humble, and confident in business, legal, and risk management to succeed, and transparency is paramount as CEOs and boards do not like surprises. Establishing this type of trusted relationship takes time; however, once solidified, the impact one has the potential to make is priceless.
As with many other executive roles, General Counsel compensation continues to increase and is commensurate with the individual’s value-add to their organization. However, while GCs have solidified their rightful place as vital members of the ELT who contribute daily to the strategic trajectories of their respective organizations, and while they are taking on an increasing number of roles outside of legal, including compliance, risk, privacy, human resources, security, ESG, and DI&E, their compensation has yet to propel past some C-suite peers who have more siloed responsibilities. GC base salaries in 2020 increased by the lowest level in the past five years. The greatest financial reward stemmed from annual cash bonuses and long-term equity or deferred cash awards. Short-term bonus targets typically have multiplier potential based on personal and company performance. Personal performance is often driven by the ability to keep the business operating smoothly, the provision of support for the company’s strategic initiatives, and adherence to budget.
With Baby Boomer GCs reaching retirement age, individual net worth at new highs, and the call to do more with leaner budgets, there is a higher level of turnover, resulting in a robust hiring market in 2021 for General Counsel. Understandably so, interest in and competition for these positions have never been greater, regardless of the demands and expectations of the CEO and board. First-time GC candidates have far less negotiating power than sitting GCs. Those with a track record of leadership, business success, and sound relationships with the CEO and board are highest in demand and diverse candidates have even greater leverage.
It is also worth noting that, as GCs make succession planning a priority – offering meaningful exposure to the board and supporting executive coaching for succession candidates – more companies are seriously considering legal leaders from within for the GC seat and benchmarking against external candidates.
Equilar’s report can be accessed at: General Counsel Pay Trends Report
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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