EA have recently been recruiting for a number of senior in-house roles and from this recruitment we have noticed a few trends regarding salaries of senior in-house lawyers.
We are seeing significant pay discrepancies at the senior end of the market. People with the same background and doing very similar work but at different companies may find themselves on considerably different salaries, with discrepancies of upwards of $100K. We are finding that these discrepancies are attributable, at least in part, to the GFC. If in-house salaries were negotiated prior to the GFC, it’s almost certain that they would be higher than if negotiated in the present, especially for senior roles. Over the past few years therefore, salaries at the senior level have seen a shift downwards.
Downward pressure on senior salaries
Companies are focusing on their bottom line and expect value for money in all their dealings and this includes legal salaries. The spotlight has been pointed at internal legal costs and companies are now setting tight parameters on how much they pay their senior in-house lawyers. Gone are the days when a company would look for the right candidate and then negotiate salary. Now companies will communicate their budget at the beginning of the process and lawyers are welcome to apply on the condition that they would be happy to accept their budgeted salary if offered the role. This forces a type of silent tender amongst applicants.
This decline can be partly attributed to the oversupply of lawyers from private practice seeking in-house roles, which has awarded companies the freedom to offer senior-level jobs at lower-level salary ranges. Additionally, there are many ambitious in-house lawyers vying for few senior opportunities, increasing the oversupply. The return of senior lawyers from other parts of the world has compounded this competitiveness – money is often not their prime motivator, so businesses can put downward pressure upon the senior level roles.
In its severest form we are seeing senior in-house lawyers pricing themselves out of the market, i.e. they are being made redundant and being replaced with less expensive (and often but not always more junior lawyers). As a senior lawyer, if your salary was negotiated prior to the GFC then your salary will most likely be higher than what the market currently supports.
We do however anticipate that this will change with a strengthening of the market and expected salary increases as in-house teams look to expand. However, it is doubtful that the market will return to the pre GFC senior salaries anytime soon.
For further information on the in-house market, please feel free to contact one of our in-house consultants on 9266 2900.