Albert Goodwin* In the legal profession, salaries can vary significantly depending on the type of law firm or organization an attorney chooses to work for. One major distinction to consider is whether to practice law in a large law firm or to assume an in-house counsel role within a company.
Each path offers its advantages and challenges, which undoubtedly impact compensation structures and overall career satisfaction. Similarly, the geographic location is important as corporate counsel in New York, for instance, will typically earn considerably more than house counsel in Milwaukee or Manchester, UK.
It is important to understand how factors like experience, company size, geographic location, and additional perks like equity incentives and work-life balance impact lawyers’ compensation. Salary ranges, from starting base salaries at large law firms ($145,000 to $160,000) to competitive in-house packages can exceed $200,000. It is important to understand how these roles compare in terms of job satisfaction, long-term financial impact, and career growth opportunities. Looking at these career-defining choices will often depend on the diverse compensation structures offered by companies and law firms.
Large law firms are known for offering high-paying positions, particularly for fresh graduates, with starting base salaries ranging from $145,000 to $160,000.
In contrast, mid- to senior-level in-house lawyers with ample experience may receive comparable base salaries, but their total compensation package may include additional perks such as company stock or better work-life balance.
With so many factors influencing compensation, it’s crucial for lawyers to weigh these aspects as they make career-defining choices.
To make an informed decision between in-house counsel salary vs. law firm salary, it’s important to examine not just the immediate salary differences but also consider other incentives, challenges, and long-term career opportunities.
By analyzing various elements of compensation and job satisfaction, attorneys can select the path that best aligns with their personal and professional goals.
Overview of In-House Lawyer Salaries
In-house corporate counsel generally earns attractive money, albeit without some of the massive paydays we see with the top law firms and their bonus levels. There is no ‘Cravath Scale’ working in-house, but there is still some big money to be made with interesting work and often highly attractive lifestyle advantages.
While the base pay can vary widely, an increasing number of in-house counsel report earning a base salary of at least $200,000 at a relatively early stage of their legal career.
A recent survey from recruiters BarkerGilmore showed that there had been heightened recruiting of in-house counsel and the salary figures are attractive.
The BarkerGilmore survey across thousands of in-house counsels showed that General Counsel salaries ranged from $375,000 to $1,103,000, while Managing and Senior Counsel ranged from $158,000 to $442,000.
The exact figures depend on various factors, which we’ll discuss in the following subsections.
Determining Factors for In-House Corporate Counsel Salaries
Several factors influence the salaries of in-house lawyers. These include:
Years of experience: Like in law firms, more experienced in-house attorneys generally command higher salaries. A mid- to senior-level in-house lawyer with many years of experience might earn a similar base salary as a starting associate at a large law firm.
Company size and industry: In-house counsel working for larger corporations or in more lucrative industries tend to have higher salaries. This is usually a reflection of the complexity and value of the work they handle.
Geographic location: Salaries can vary significantly depending on the cost of living in a particular area. In-house attorneys in large metropolitan areas, where living expenses are higher, generally earn higher salaries.
Position and responsibilities: Higher-ranking in-house attorneys, such as general counsel or deputy general counsel, command higher salaries due to their increased responsibility and decision-making authority.
The median total compensation was down 3 percent from 2021 for all industries, across all positions. Base compensation was flat and LTI (long-term incentives) was up 10%, but bonuses realized a 23 percent loss from 2021. The energy industry realized the only total compensation increase at 3 percent. Total compensation for the consumer industry was…
Benefits Beyond Law Base Pay
Benefits received by working in-house can’t be overlooked – at all. In addition to base pay, in-house attorneys often enjoy a range of other benefits and compensation forms that can make their overall package more attractive. Some of these include:
Bonus potential: Many in-house lawyers are eligible for an annual bonus tied to the company’s performance and their individual achievements. While these bonuses may not reach the levels seen at some large law firms, they can still be a significant part of an in-house attorney’s overall compensation.
Equity incentives: It’s not uncommon for in-house counsel at publicly-traded or private companies to receive stock options or other forms of equity-based compensation. This can be an especially appealing benefit when working for a successful startup or fast-growing company.
Work-life balance: One of the most frequently cited advantages of in-house positions is the better work-life balance compared to law firms. In-house attorneys often report a more predictable schedule with reduced hour requirements, which can be a significant non-monetary benefit.
Employee benefits: In-house counsel typically enjoy all the benefits available to other company employees, such as health insurance, retirement plans, and paid time off.
Additionally, as I have noted, in-house lawyers often enjoy additional benefits and a more favorable work-life balance, which can make these roles highly attractive to many professionals.
Determining Factors for Law Firm Salaries
Several factors play a role in determining law firm salaries, which have been rising steadily – if not spectacularly in some cases – as we have reported here with the bonuses and salary raises across the larger law firms and boutiques. But what are the key determining factors that determine the amount law firms pay?
For example, a first-year associate at a large law firm’s starting base salary has usually ranged from $145,000 to $160,000 although recent increases that we have reported on law firm salaries has continued to lift those levels much higher
Those reports show how law firm salary levels and the ‘Cravath scale’ continue to scale the heights of law firm compensation.
However, mid- to senior-level in-house lawyer with many years of experience may make the same base salary.
Size of the firm: Typically, larger law firms offer higher salaries to attract top talent. You can see some of the biglaw salary payscale examples here. For example, benchmark first-year associate salaries at many large law firms reached $190,000 in 2021 and have since increased as we have reported regularly in LawFuel. By 2023 the figure above had risen to
Smaller firms usually pay less, but they might offer a better work-life balance than the large firm offering the large salary.
Location: Salaries can also vary by geographic location. Major cities and prominent legal markets usually have higher salary brackets compared to smaller towns or regional markets.
Experience: As attorneys gain more experience, their salaries may increase over time. Lawyers who work in specialized practice areas might command higher pay rates due to industry demand and expertise.
Billing arrangements: In some cases, an attorney’s salary can be linked to the number of billable hours they generate, incentivizing them to bring in more clients and work additional hours.
Additional Perks of Law Firms
Apart from salaries, law firms often offer additional benefits that can contribute to an attorney’s overall compensation package, although these may differ from the range offer by in-house employers. Nonetheless, once again, the benefits advantage must be carefully weighed up. Among the list:
Bonuses: Law firms often provide generous bonuses based on billable hours, individual and firm performances, or other factors. This can significantly boost an attorney’s total income.
Professional development: Many firms offer opportunities for continuing education and skill development, such as in-house training, workshops, conferences, and mentorship programs.
Healthcare and retirement benefits: Law firms usually provide extensive healthcare coverage, including dental and vision plans, as well as retirement savings options such as 401(k) plans.
Client development: Attorneys at law firms may have access to a sizable client base, which can help with professional networking, subsequent career opportunities, and long-term career growth.
While it’s essential to assess law firm salaries and benefits when considering career trajectories, it’s also crucial to keep in mind factors such as work environment, culture, career development opportunities, and personal goals.
Direct Comparison
Salary Ranges
Salaries for lawyers greatly differ between large law firms and in-house positions.
In large law firms, it is common for first-year associates, fresh out of law school, to have a starting base salary ranging from $145,000 to $160,000, as has been noted. But the growth in law firm competition for law talent has seen recent increases in first year associate salaries rise to $215,000.
The base salary can vary depending on the geographic location, where more prominent cities tend to have higher pay rates, unsurprisingly.
On the other hand, a mid- to senior-level in-house lawyer with many years of experience may make the same base salary despite their expertise. This illustrates the significant disparity between the two settings.
It is important to consider that in-house lawyer salaries may be more challenging to uncover, as there is less transparency and variability compared to large law firms. Lockstep salaries and hours-based bonuses are common in Biglaw, whereas in-house compensation can make for a trickier prospect to assess.
These benefits, combined with high salaries, can make working in a large law firm an attractive option for many lawyers. However, in-house counsel positions often offer their own unique advantages, such as:
Despite these benefits, the compensation of in-house lawyers can still be lower than their counterparts at large law firms. The salary and perks offered by in-house positions may depend on factors such as the company’s size and industry, the lawyer’s specific role and responsibilities, and the company’s location.
In conclusion, it is essential to carefully consider the various aspects of compensation in both settings, including salary ranges and perks and benefits, to make an informed decision when choosing between working at a large law firm or an in-house position.
Job Satisfaction vs. Salary
When comparing in-house and law firm salaries, it is essential to consider the differences in job satisfaction between these two sectors of the legal profession. Not only is salary an important factor, but the level of satisfaction and overall well-being of a lawyer can impact their long-term career trajectory and choices.
In-house lawyers often experience more predictable working hours and a better work-life balance compared to their law firm counterparts.
This can be an attractive feature for attorneys looking for more stability and job satisfaction. However, more senior in-house lawyers may find themselves earning a similar base salary as a first-year associate at a large law firm, with starting base salaries ranging from $145,000 to $160,000.
On the other side of the spectrum, lawyers in large law firms may enjoy higher salaries, especially for those just starting in their careers. The trade-off may be working more hours and having a higher level of stress due to the nature of the work in a law firm environment.
A survey conducted by Bloomberg Law highlights that a significant percentage of in-house and law firm lawyers report being satisfied in their jobs.
Remember that job satisfaction is influenced not only by salary but a variety of factors such as work environment, company culture, and professional growth opportunities. Any comparison of in-house and law firm salaries for attorneys should take into account factors beyond the paycheck. Job satisfaction, work-life balance, and personal preferences all play a significant role in determining the right career path for each individual lawyer.
Long-Term Financial Impact
When comparing the long-term financial impact of working in-house versus at a law firm, several factors influence earnings. In-house lawyers typically have a more stable salary, depending on their experience and position within the company. However, their salaries can be lower compared to law firm lawyers, especially partners.
Bonuses are another consideration, as law firm associates often receive higher bonuses than in-house counsel, with certain firms even awarding bonuses that can surpass $200,000 for high-level associates as we recently reported with the bonuses paid in 2023 by Milbank and then followed by – and even eclipsed by – other biglaw competitors..
In-house attorneys may also receive bonuses, but they are usually smaller and tied to company performance and individual accomplishments2.
In-house legal professionals may have access to stock options and other equity-based incentives that can significantly enhance their long-term financial compensation. These incentives, which are less common in law firms, can sometimes level the playing field between in-house and law firm earnings3.
Lawyers also need to consider career growth and earning potential over time. In law firms, attorneys can climb the ranks to become partners, which can lead to substantial income increases. Partners at large law firms can earn several times the salary of an in-house attorney, although partnership positions are often highly competitive4. In contrast, in-house roles offer a more linear career path with fewer opportunities for dramatic salary jumps, but they provide more job security and work-life balance5.
In summary, while law firm lawyers may have higher initial salaries and bonuses, in-house counsel can benefit from equity incentives and a more balanced work-life situation. Career growth and long-term earning potential can vary significantly depending on the lawyer’s goals, priorities, and chosen career path.
Footnotes
In-House vs. Large Law Firm Compensation – A Closer Look ↩
2021 In-House Compensation Survey Report ↩ ↩2
Making Sense of In-House Lawyers’ Compensation ↩
As GC Compensation Stalls, Disparity Between In-House, Law Firm Pay Glares ↩
PMI Q3 2021 Analysis: Despite increasing salaries, many lawyers are ↩
It is important to consider individual preferences and long-term career objectives when deciding between an in-house position and a role in a large law firm. While law firm salaries can be more attractive, the in-house roles may offer more flexibility and a better work-life balance. Moreover, negotiating for a competitive in-house salary is always a possibility, keeping in mind factors such as location, industry, and the lawyer’s experience.
In conclusion, the choice between in-house and law firm careers largely depends on personal preferences, career goals, and priorities. Although large law firm salaries are generally higher, in-house positions may offer other benefits that can make them an attractive alternative for some legal professionals.
Author – Albert Goodwin writes on law practice and law salary and related issues with his last contribution to LawFuel being an introduction to the Big Law Bonus Season.
