All posts by Lateral Link

Will Firm Culture Supersede Prestige?

Firm culture are words too often thrown around to connote some vague set of traits discerned from the mélange of partners and associates woven into the current fabric over years. To many, the idea of a culture is overshadowed by the unending pursuit of books of business and profit margins.  In reality, however, culture is the most important trait for sustainability and productivity.

It takes a certain type of person to succeed in Biglaw, so the relative happiness for a Biglaw attorney is much different than the happiness of other kinds of workers.  We know it when we see it.  Notwithstanding, Biglaw attorneys are not robots running on an endless supply of energy — at least not yet — and have certain requirements to remain healthy and productive.

Firm culture is multifaceted and oftentimes means different things to different people, but generally the categories break down to how the firm views hour requirements, personal v. work satisfaction, substantive nature of work, priority on mentoring, leadership by example, long term view on a career, importance of diversity, and the list goes on and on.

Each category is prioritized differently, but most commonly, the first question an attorney will ask us about a prospective firm is, “what’s it like there?”

Unsurprisingly, the most common reason attorneys move firms is that they are lacking something (which they may confuse with compensation but that’s not really the underlying reason), and in my experience, the biggest cause of unhappiness is feeling underappreciated or unrecognized by the firm.   That leads to a common misbelief that the grass is always greener.  The good recruiters should have a firm grasp on the nuances among firm culture just through dealing with attorneys on a daily basis.

I believe the best direction a firm can take is honesty about who they are and what they expect.  For example, does the firm want attorneys who will bill 2,100+ hours? The best policy to attract those types of attorneys is not to sell your firm as a lifestyle firm with an 1,800 minimum.

Does the firm have strong management? How do they manage? Believe it or not, many associates like tasks that they can complete. After four years of undergrad and three years of law school with set deadlines for projects, tests and papers, many associates need a rigidly structured environment to succeed.

Other associates prefer free market systems and a more collaborative environment. For partners, that’s tantamount to an eat-what-you-kill structure. The cost of misrepresenting your firm to a lateral attorney is higher attrition that leads to a loss in revenue.   There is a significant opportunity cost incurred from lost profits that result from not maximizing the potential amount of billable revenue on the table, but also increased expenses from training, lateral agency fees, relocation expenses, and more.

For partners, culture has a very different meaning than it does to associates. Lateral partners oftentimes seem to initially prioritize pay over cohesive and collaborative culture and are oftentimes disappointed with the realities of the firm’s culture they overlooked during the recruiting process. Misrepresenting firm culture is a surefire way to see a revenue stream quickly come, and quickly go.

So which firms are noted for their excellent cultures? In my experience, firms with the strongest culture and stability are less inclined to hire for revenue but rather prioritize fit and practice.  Firms that stand out for their excellent and identifiable culture are Gibson Dunn, Paul Weiss, Keker, Covington, Kellogg Huber, and Milbank Tweed, just to name a few.

Many think lateral turnover is often indicative of a cultural problem. Firms with the most associate turnover over the last year to date were, Latham (210), Jones Day (204), Skadden (195), Sidley (192), and Morgan Lewis (188). Lateral turnover, skews with size, the firms listed above have strong cultures, but large practices. Instead, changes in leverage can be a better indicator of cultural problems. A large loss of associates without partner losses can indicate a cultural problem. Dentons and Orrick realized a loss in leverage that was four standard deviations below the average. In Denton’s case, this is not unusual given they’re still in merger mode. In most cases firms lose about an equal percent of partners and associates. Orrick had almost no net losses in partners but a double-digit loss in associates, which accounts for this change in leverage. This is not necessarily bad, as Orrick had one of the highest leverages in 2014.

Immediate changes in leverage can shock a firm’s ability to service work, or can leave them with an excess of associates with not enough work to service. Firms should strive to maintain a pyramid shape, comprised of four layers, associates at the base, counsels on the second tier, service partners on the third, and equity partners at the top. It takes a strong culture to keep a healthy leverage in check; if your leverage is too low, partners can become overtasked and unhappy with the firm, but if it’s too high, associates may choose to lateral away to another firm where they have a better chance of making partner. A strong culture engenders loyalty, and gives attorneys an incentive to stay and weather adversity.

Maintaining a firm’s culture in the long run at the expense of short-term gains pays dividends in sustainability and profitability. Less attrition means more stable revenue streams, less costs and less misappropriated resources. At Lateral Link, we talk daily to associates and partners.  It’s great to watch associates or junior partners mature into firm leaders who guide the direction of the firm. We also see the opposite who steer the ship the wrong way. With thousands of lateral moves annually, we aggregate information and use it to help firms and candidates make informed decisions based on more than a book of business or law school ranking.

Is Litigation Financing The Future Of Law?

Litigation finance is an interesting topic for a variety of reasons. Some states such as California, New York and Texas allow for the practice (to varying degrees), while many others limit its use for three important reasons.

Champerty is the first barrier to entry for litigation financing in the United States. The concept of champerty derives from ancient Greece and Rome and is defined as the splitting of fees between the litigating party and a nonparty who funds or supports the lawsuit. Maintenance, the second offense, is the interjection of a third party who wields undue influence on a case. The two are intertwined and were codified in English Common Law to prevent the English elite from furthering and profiting on the lawsuits of commoners by overwhelming the courts with their clout.

The third consideration stems from the ABA Model Rules of Professional Responsibility. Model Rule 5.4 provides that a lawyer or firm may not share fees with a non-lawyer. Litigation financing circumvents this restriction by financing the plaintiff (or possibly the defendant) and not the law firm, with the funder taking a contingent reward in exchange for partial or full funding.

The argument against litigation financing is that it will lead to an increase in frivolous lawsuits. While maybe true in the chaotic and corrupt judicial system of medieval England, the threshold for litigation financing in our modern market is relatively high.

Because litigation financing is non-recourse, financing firms closely examine the different probabilities of each case to decide whether it is worth financing. The case must yield either a high enough reward or a certain enough reward to make the expected value of the case large enough to warrant investing. Generally, a litigation financing firm will not invest if their expected probability of winning in less than 60%.

litigation finance decision tree

A crude decision tree of an example case, posted above, shows some of the various pitfalls of litigation financing. Only three listed avenues, whose total probability is slightly greater than 50%, lead to a positive ROI for the litigation financing company. If we expect the case to potentially yield a $100 million award or settlement and only yield $2.5 million in the case of an unsubstantial settlement or award, then the expected value for the litigation financing firm taking a 20% contingency fee should be just under $10 million. Still, that margin would likely be insufficient for a litigation financing firm for good cause; litigation financing is both a long-term and illiquid asset, and any firm can only have a finite number of cases pending at once.

Because of the substantial risk involved for litigation financiers, litigation financing will not likely lead to an increase in “frivolous” lawsuits, at least purposefully. Seeking financing involves a process called adverse selection, whereby those who pursue funding vigorously are often less desirable clients for financing firms.

Because funders and litigants work with asymmetric information, at least from the outset, it is possible for a litigation financing firm to broach the possibility of financing a weaker lawsuit than expected. However, most firms will undergo an exhaustive amount of due diligence before agreeing to finance a case, oftentimes spending six figures to ensure a lawsuit is meritorious.

The real danger lies in the securitization of litigation. New crowdfunding platforms have been established for litigation finance. These services suffer from the similar conflict of interests as Standard and Poor’s and Moody’s. By passing the moral hazard to a multitude of investors, these platforms allow for risky litigation at the cost of faceless investors. Standard litigation financing companies have access to privileged information that is not discoverable under the work product doctrine; whether this protection extends beyond secondary investors is unknown, but is unfeasible anyways.Litigation financing will likely emerge as an effective tool for companies to mitigate uneven cash flows. Many companies are hesitant to pursue even meritorious litigation at the risk of expending significant reserve or future capital. Litigation financing allows them pursue these claims with the risk underwritten by the financing firms. Litigation financing can also prove a boon for law firms, allowing firms to normalize cash flows from cash-strapped clients without eating into their profitability. Rules allow for counsels to disclose the option of litigation financing to their clients.

Litigation financing could also spur partners to leave failing firms. Cash flows are an immediate barrier to opening a spin-off firm, but with litigation financing, a partner can take his client and colleagues, then use a staffing agency (such as Lateral Link) to fill the ranks and start their own firm.

Though its future is unclear, and its practice still young, the future of litigation financing looks promising as vehicle and insurance policy for both litigants and law firms.

Introducing Matt Ritter

Lateral Link is proud to introduce its newest recruiter Matt Ritter. Matt joins us as a University of Pennsylvania Law graduate and former attorney at Quinn Emanuel, Kirkland and Ellis and Mayer Brown. Matt left the insular world of law in 2009 to pursue his dream of working in the entertainment business. From performing stand-up to producing the highest rated unscripted show in history, Duck Dynasty, Matt has learned the value of tenacity and self-promotion, two qualities key for attorneys to secure their dream jobs. Matt has a deep network of both law and entertainment industry contacts. We’re happy to have Matt join our company, which is conditional on his supplying free hugs and beer.

 

Ten Questions With Matt Ritter:

 

Q: Why did you want to become a lawyer?

 

A: I wanted to reenact Jack Nicholson’s scene from a Few Good Men.

 

Q: How did that turn out?

 

A: As a finance lawyer I never got my moment in court. Now I dress up my dog as Jack Nicholson and reenact the part with her.

 

Q: When did legal recruiting come to your mind as a possible career?

 

A: The more adept I became at navigating the entertainment industry, the more I began to realize that I was developing a skill that many attorneys go their entire careers without cultivating. The ability to communicate with someone efficiently for mutually beneficial ends is an important skill to have. I use to write for the Lawyerist giving advice to Big Law attorneys and I put one and one together and ended up in this field.

 

Q: What is your proudest (non-legal) accomplishment.

 

A: Getting hired to produce Duck Dynasty. I met the president of the production company awhile back and he wanted to hire me as their lawyer when I was no longer practicing. I ran into him a year later when he was getting into his Bentley and I summoned up the courage and told him I really wanted a job working for him in a non legal capacity. The very next week, I got hired as a producer on the highest rated unscripted show on TV. This just goes to show that you are not going to get something if you don’t ask for it.

 

Q: Who is your fictional attorney counterpart?

 

A: Mike from Suits. He had a secret that he never went to Harvard, my secret was I was doing stand-up comedy every night when I should have been focusing on revising credit agreements.

 

Q: How did you get all that done?

 

A: Starbucks rewards card.

 

Q: Mayer Brown or Kirkland?

 

A: Mayer Brown because you always remember your first…but truthfully it was really tough, it was the height of the subprime mortgage backed securitization craze so we were cranking out at least one deal every month. Kirkland had its benefits too, especially the mid-year bonuses.

 

Q: Do you have a favorite comedian?

 

A: Probably [George] Carlin, he had a way with words but he also had a strong perspective. I think a lot of people are afraid to have such a strong voice, because it can get them in trouble, but really they just end up lost in the shuffle.

 

Q: What is your goal in legal recruiting?

 

A: My goal is for people to find the right balance between work and personal life. I learned firsthand that if your are not happy at work you are not going to be happy in life. I think the right fit is out there for everybody.

 

Q: What’s your personal mantra?

 

A: If your story is holding you back, change your story. Always be looking forward, but learn from your past mistakes too.

 

Who Makes More: Partners Or General Counsels?

At some point in our lives, we would all give a pound of flesh just to make partner, but the reality is that many partners experience buyer’s remorse. Maybe some don’t enjoy business generation, balk at the price of capital contributions, feel too much pressure, and so on. The more partners make, the more they get accustomed to the means to fund their lifestyles, school loans, children’s private schools, or simply a taste for extravagance.

Given your partner compensation, would you seriously consider a general counsel job?

As we’ve explored in the past, partner compensation tends to be fairly transparent; firms will generally pay you 33% on your book up to around five million (at which point more associates and staff are needed to service your work so you get paid less and less of what you generate).

The main assumption about “going in house” is that you won’t get paid as much compared to making partner. This is not necessarily true. In the past few years, a median partner at a Biglaw firm has made about $680,000 compared to a median general counsel who made around $600,000. While $80,000 is a sizable difference, the gap between in-house pay and Biglaw pay is not as stark as many believe.

When you break down general counsel pay by years of experience, the gap closes significantly. For attorneys with 6-10 years of experience — within the junior partner threshold — these general counsels made nearly $800,000 on average, $120,000 more than their Biglaw counterparts — though the median still hovers around $600,000.

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It is not completely fair, however, to compare the 200 most profitable law firms with the entirety of the corporate space. When examining compensation by company profits, general-counsel compensation becomes suddenly more appealing.

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General counsels at companies with over $10 billion in revenue made around $1 million. To put this into perspective, there are 63 companies that have revenue streams of over $100 billion a year, and around 950 total public companies (and many more private ones) with cash inflows greater than $10 billion a year. Remember an obvious market constraint: there is only one general counsel, while each law firm could have hundreds of partners.

Now that we have established that general counsels aren’t pinching pennies when compared to their law firm counterparts, what are the variables to consider when benchmarking general-counsel compensation?

  1. What is the size of the legal department? The correlation between the size of the company — and hopefully their revenues — and the size of their legal department, is probably pretty linear. When you join a large company, you are not only managing more issues that come up (from FCPA litigation and employment disputes to acquisitions and executive compensation), but you are also managing potentially dozens of attorneys as well. The upside is, you are well compensated for your responsibilities.LL 4-17-3

    The median total compensation for a general counsel managing over 25 attorneys is $1,003,400, comparable to that of a Biglaw partner. The survey recorded compensation in excess of $1.4 million, meaning a top general counsel would earn roughly what a partner with a $6 million dollar book would make.

  2. What do your competitors pay their general counsels? A good benchmark for general counsel pay is simply what your closest competitor pays their general counsel. Some companies put a higher premium on attorneys, so while you might work at a $100 billion dollar company, you might end up getting paid less than a general counsel at a $10 billion dollar company. By looking at competitors you can better ascertain the importance the company places on legal counsel and ballpark your total compensation.
  3. What did the company’s CEO, CFO, and COO make? Generally, business decision makers will always make more than any legal counsel. If the company paid the COO $500,000 last year, don’t count on more than that. Executive compensation is easy to find online and can be a good resource to estimate general counsel compensation.
  4. How does the company pay their general counsel? Corporations often deploy intricate compensation packages that make NFL contracts look like basic arithmetic. Some structures offer long-term cash incentives that lead into eight digits while others offer equity, but most offer a combination of salary, bonuses, and stock options to diversify the pay. The variability of the stock’s worth can either greatly increase your compensation, or decrease it, which is another reason to consider the company’s financials before joining.

Going in-house can be intimidating. The opaque pay scale, new responsibilities, and political culture can seem overwhelming. If you have any questions about entering the in-house market and what a fair market rate would be for your services, or if you are a current in-house attorney looking to benchmark your current pay against that of the market, I’d be happy to help you maximize your compensation package by arming you with relevant information to make your pitch more credible and realistic. Find me on LinkedIn so that we can continue the conversation in the future.

On The Beaten Path? What Your Law School Ranking Says About Your Prospects For Making Partner

Every year bright-eyed graduates walk from their respective campuses wondering what the future will hold for them. Will I end up at a Biglaw firm? Will I make partner? Where will I live? In many cases, these questions are already answered by looking at statistical trends and correlations.

If you graduated from the University of Georgia, there’s a pretty good chance you are still in Georgia — as are 80% of the graduates in Georgia at major law firms. These geographical trends tend to downscale with the prestige of the school, as national and international firms recruit more heavily at more nationally recognized schools.

Yet, these trends still hold steady even at the top schools such as Yale, Stanford, and Harvard. Take my alma mater Harvard as an example. More than 75% of students stay on the east coast — but not necessarily in Boston — after graduating. While it wouldn’t be prudent just to choose a law school based on its location, bear in mind it can have a big impact on your career trajectory as well.

Another statistic that is often thrown out is Harvard graduates have a better chance at making partner. This correlation is not so simple. Out of 5,500+ attorneys who graduated from Harvard between 1990 and 2000, around 13% of them ended up becoming a partner at an Am Law 200 firm. This fact does not mean everyone has a 13% chance of becoming partner if they graduate from Harvard. However, the statistic reflects kindly on the current law school rankings. There is a -.54 correlation between law school ranking and “chance of making partner,” meaning the lower (towards 1) your school is ranked, the better “chance” there is of you making partner.

Here are the stats for the Top 20 Law Schools:

Top 20 LL 4-10

Interestingly, there is a significant drop off from the rankings’ permanent 14 members — the first 14 schools, which, have not slipped outside the top 14 since the inception of the rankings — and those below it. From the top 14 to the next six schools, the average rate at which an attorney makes partner drops from 11% to 8%.

Washington U. in St. Louis is only a recent entrant into the top 20 (first charting in 2005) which explains its 3% promotion rate for attorneys graduating from ‘90-’00. Furthermore, Washington U. grads had to contend in the Chicago market with University of Chicago, Northwestern, and Michigan graduates — three mainstays of the top 14.

The east coast is overwhelmed by top schools from Harvard to Yale to Columbia, making competition tougher in cities like New York than cities such as Chicago, which has four main feeder schools to Biglaw firms.

These stats are incomplete however; not everyone graduates from law school to go to Biglaw firms. Therefore it would be presumptuous to measure the pure chance of making partner by graduating from a school if not counting for a myriad of variables.

Furthermore, firm hiring is not as superficial as Suits; firms won’t dismiss a stellar candidate just because he went to Fordham and not Harvard. So while brand name does mean something when it comes to firm hiring, the assumption of a school’s superiority lies in the strength of the students, which is why firms can seem preferential towards certain schools.

Another complicating variable is the school’s curriculum. Some law schools also have excellent MBA programs and allow their students to obtain a joint MBA/JD degree. These schools tend to be feeder programs to Fortune 500 companies, which can make them seem inferior in a solely Biglaw statistical analysis.

Harvard is one of those schools that allows for a joint degree — and is ranked second among business programs — and unsurprisingly, it has a high number of general counsels in top companies (and the highest of any out of our sample).

So while it’s easy to boil down a school’s reputation to the percentage of its graduates that make partner, the reality is that percentage depends more on the type of students the school enrolls, their ambitions, and their competence. So while your law school may be a pretty good indicator of where you might end up, the rest is entirely up to you.

4 Mistakes Attorneys Make In A Job Search

Scouting firms for a prospective lateral move is somewhat akin to walking through a minefield with a blindfold; there are many hazards and traps that have been tripped by other attorneys, but without a point of comparison, it can be difficult to navigate the market without sending signals to your current firm. Here are the four mistakes attorneys make when exploring the market.

1. Self-Submitting Blind Inquiries. Fewer things will get your résumé thrown into a recruiting director’s comically large trashcan faster than a self-submitted application for a non-existent position. If you are going the self-submission route, make sure the firm has a listed need that you fill. Everyone wants to work at the Wachtells of the world, but unless they have a specific need, your résumé becomes a nuisance and can negatively impact future applications when a position does open up in your practice. So do not self-submit to firms just because you like the firm; make sure a need exists as well. If this is your dream firm and you still want to send an inquiry, talk to a recruiter. Recruiter’s blind inquires are well received by recruiting directors because they assume the recruiter is submitting a candidate who is both on par with the firm’s standards and practices in an area that has unlisted needs. Our recruiters have close relationships with many recruiting directors and often have a surfeit of unlisted needs that the firm chooses not to disclose publicly.

2. Becoming The ‘Invisible’ Man/Woman. If you’re leaving work for “appointments” several days a week, your frequent absence will become conspicuous and the firm will most likely realize that you are interviewing. Unless your firm is aware and condones your lateral search, try to limit your interviews to non-business hours or try to spread them several weeks apart. One of the most important parts of a lateral search is making sure that your current firm does not know about it. Oftentimes attorneys scout the market only to decide their current firm or offer is better than any other available firm. Should you decide to stay at your current firm, knowledge that you initiated a lateral search could make you seem untrustworthy in the eyes of management—and could have negative repercussions on your chance to make partner.

3. Tipping Your Hand Too Early. A conflicts check is an important part of the lateral process, but under no circumstances do you want to divulge client or firm billing information at the beginning of the process. The conflicts check is usually the task after all other steps have been completed in the process and the firm is ready to consummate the lateral move. Pull the trigger too early, and you just sent a competitor a descriptive insight into your practice and the firm’s structure.

4. Not Using A Recruiter. There is no reason not to use a recruiter. Recruiters will help you stack up your credentials and decide on appropriate firms to submit to. Recruiters will help you perfect your résumé, prepare for lateral interviews, and offer you insights into firms that are available nowhere else. Best of all, they’re free to you. Recruiter submissions are treated with a higher priority because it’s our job to match attorneys with firms and vice versa. There is no reason not to use a good recruiter, but beware, a bad recruiter can hinder or harm your lateral search.

3 Insights About In-House Counsel Compensation

After last week’s article on in-house pay versus partner pay, I heard from dozens of attorneys who had further questions about the difference in compensation between Biglaw and in-house postions. I want to address some common follow-up questions.

  1. What do non-general-counsel positions pay?

Corporate in-house departments are tiered like law firms. Generally, the general counsel is the top attorney in the company, also sometimes referred to as chief legal officer. Their duties skew more towards management, strategy, and advising. Occasionally, companies have multiple general counsel if they have subsidiaries, or they may choose to refer to these as associate general counsel. Depending on the importance or size of the subsidiary, secondary GCs can be paid either comparably to general counsel, or far less, but I have not come across one paid more.

in house counsel compensation

Next in line is the deputy general counsel, who is second in command. Deputy GC (or CLO) positions tend to pay between two-thirds and three-quarters of what the GC is paid. Companies might have multiple deputy general counsel, or they might have none at all, depending on the size of the companies. The size of the law department tends to scale linearly with the size of the company.

Under them are the division heads, the counsel of M&A, chief privacy officer, chief IP counsel, and so on. These tend to make the same or close to the deputy general counsel, but their pay range is less volatile.

It’s hard to generalize across such a broad spectrum of companies due to the financial disparities. Some companies pay their GCs in excess of $10,000,000 in total compensation, but the next highest-compensated attorney could be paid less than one-tenth of that. Biglaw tends to operate in a similar manner: firms with lower PPP generally can’t afford a partner making three standard deviations above average, while some of the high-leverage ones have pay disparities between the lowest- and highest-compensated partners that reach the double digits.

  1. Which industries pay the most?

It is easy to generalize industries by their pay, but its inherent meaning is more complex than numbers. Barriers to entry can make certain industries top heavy and therefore skew GC compensation upwards while other industries might have a surfeit of GC positions, driving compensation below average. For example, beverage companies paid on average $15,000,000 in cash and stock compensation, according to a 2014 survey by American Lawyer Media (ALM), but there was only one such position available. Pharmaceuticals was the most commonly represented industry on the Fortune 100, but paid closer to the overall average, giving their general counsel $4,302,284 a year.

The correlation coefficient between revenue and total compensation is .11, a negligent correlation. Similarly, the correlation coefficient between base salary and revenue is .22, slightly stronger but still largely insignificant. While compensation largely scales on a macro scale, from small companies to behemoths, within the Fortune 100, as well as similarly sized companies, the pay of general counsel depends on a myriad of factors including the company’s need, lawyer’s competence, legal department size, and supply and demand.

  1. Who are the highest-paid general counsel?

As we covered last week, general counsel are paid in a variety of manners; their compensation is usually a mixture of salary, bonus, and non-cash incentives (usually equity). Because of these differing compensation packages, determining who earns the most, year-to-year, is often dependent on the company and attorney’s performance.

For base salary, Gerson Zweifach of News Corp. (Fox) pocketed a cool $3,000,000 in ALM’s 2014 survey of Fortune 100 companies’ general counsel. In second was GE’s Senior VP and General Counsel, Brackett Denniston III, with $1,650,000 in base salary.

As far as stocking stuffers go, John Finley of Blackstone got a healthy $4,212,555 yuletide bump to offset his relatively conservative base of $350,000. Other large bonuses were paid to Gary Lynch of Bank of America ($3,260,000) and David Drummond of Google ($3,000,000).

Another method companies use to compensate GCs is Nonequity Incentive Compensation. Generally, each executive is promised a certain percentage of an Annual Incentive Plan that is funded on the company’s return on net asset performance. The better a company does, the more the plan pays out. From the general counsel surveyed, 94 of 100 had some amount of Nonequity Incentive Compensation. The highest payout was to Paul Cappuccio of Time Warner, who received $3,737,300, but no bonus. The next highest two were Alan Braverman of Walt Disney ($2,950,000) and David Bialosky of Goodyear ($2,910,435)

Two last forms of payment are stock options and awards. Awards are paid out but require a set period to vest — giving the employee extra incentive to stay during that period — while options sell the company’s stock to the employee at a fixed price and amount. Awards are more common than options within the Fortune 100, but most general counsel are compensated with a mixture of both. Frank Steeves of Emerson Electric was awarded $5,218,930 in stock. The highest amount of option awards for the year went to Brackett Denniston III, who took home $2,486,000.

For overall compensation, the lowest-paid general counsel at a Fortune 500 company, brought home around $1,000,000 — mostly because no options were exercised or stocks granted — which is akin to a partner with about a $3,000,000 book of business. The average compensation for a Fortune 100 general counsel was around $4,200,000. The highest overall paid GCs, based on stock value realized plus cash, were:

highest paid general counsel

As I mentioned last week, there are myriad factors that come into play when benchmarking in-house compensation. If you are currently negotiating your compensation package, feel free to reach out to me on LinkedIn and we can schedule a time to chat. Although Lateral Link specializes in attorney placement with law firms and in-house legal departments, we engage in compensation conversations as part of our day-to-day jobs, so we have a wealth of data points that may help you navigate negotiations.

Introducing The Lateral Link Scholarship Fund At Harvard Law School

Michael Allen, a Harvard Law School ’04 alum, and founder and managing principal of Lateral Link, has made a commitment of $250,000 to establish a new financial aid fund at HLS called the Lateral Link Scholarship Fund.

Lateral Link will donate ten percent of its fees earned through the firm’s placement of HLS alumni.

“I value what HLS and its alumni have afforded me since graduation,” Allen said. “I wanted to give back to the Law School by creating a fund that could be used to provide financial assistance to current students. For every talented graduate who is placed by the firm, support will be directed back to future attorneys studying at Harvard Law School.”

“With this commitment, Michael Allen has taken a distinctive approach to supporting the next generation of leaders at HLS,” said Steven Oliveira, Associate Dean and Dean for Development and Alumni Relations at Harvard Law School. “We are deeply grateful that a young alumnus has chosen to give back to the Law School, and to present and future legal scholars.”

The Lateral Link Scholarship Fund requires no donations on your part. You can contribute simply by referring our services to colleagues and friends and by keeping us in mind when planning a lateral move. Lateral Link will donate 10 percent of the fees earned from placing HLS alumni to this fund to help financially disadvantaged students.

Since launching the Lateral Link Scholarship fund only a few weeks ago, Allen is happy to update Lateral Link’s quick progress in meeting its $250,000 commitment. Lateral Link has already contributed $20,000 to HLS with the placement of a partner at top ten Am Law firm, garnering $20,000 for scholarship aid at Harvard Law School.

In addition, on Wednesday of this week, Lateral Link just established a similar commitment with USC Gould School of Law with the Lateral Link Endowed Scholarship Fund. USC Law alumni can give back to their school as well by recommending our services to their alumni.

Please contact Michael Allen at mallen@laterallink.com or 213.785.2344 for more information.

Wrapping Up The Best First Quarter For Lateral Moves In NY History

Snowstorms begone as the lateral market continues to heat up to unprecedented levels in New York. With the first quarter wrapping up in a few days, this is the best Q1 that New York has ever had for lateral moves for associates, partners and total lateral moves.

There have been 248 lateral moves so far this first quarter, which eviscerates 2014’s opening tally of 118 lateral moves. DLA Piper and Wilson Elser lead with 9 associate gains each, with the usual suspects of Skadden, Goodwin Procter and Simpson Thacher rounding out the top five.

New York has a strong seasonal trend and Q2 and Q3 tend to be the most active seasons for lateral moves. On average, these two quarters together are 45% higher than Q1 and Q4 together. One reason for this is associates tend to stick around to collect their year-end bonus and by the time they collect and initiate a lateral search, it can be the second or third quarter before they actually move.

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The New York associate market is high on real estate, banking and corporate, while litigation lags behind slightly. Tax positions are also surprisingly abundant, but the IP market remains tepid for associates.

The NY associate market has grown at a staggering pace since the recession. Its projected rate of resurgence beats the other top tier markets by a significant margin. This rate could level off in the near future should more firms reach (or exceed) critical mass, but in the short run, the associate market should continue to grow.

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While the New York partner market looks more subdued compared to the associate market, this is the case in every city. It’s not that the partner market isn’t rebounding, but that partners are more immune to the poxes of a recession.

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While the market for partners will likely lag behind 2012’s blistering year, it should be the second best post-recession year for partners with around 382 partner moves.

Winston & Strawn has started the year strong, collecting nine partners from Pillsbury—the most of any firm—including Pillsbury’s structured finance head Jeffery Stern. Davis Wright Tremaine, DLA Piper and Greenburg Traurig round out the top four in partner gains.

Despite a seemingly lukewarm partner market, the overall New York market is expected realize a 17% increase in lateral activity from 2014 and a 138% increase from 2010.

Should the economy hold steady over the next half-decade, we will likely see Biglaw rise to unprecedented levels as firms continue to grow through summer recruiting and mergers. If law school applications do not rise at the same pace, we could likely see more slots open for first year associates who might have otherwise not made it into a Biglaw firm, and more senior associates make partner when they otherwise would have made counsel.

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Spring Thaw In The D.C. Lateral Hiring Market?

With the heavens unleashing yet another torrential snowstorm along the I-95 corridor (on the first day of Spring, no less), residents of the Washington metro area may be starting to feel like they are stuck in the movie Groundhog Day. Also feeling like they are stuck? Some attorneys in the Washington metro area who were hoping to move to another law firm after the start of the new year (after collecting their end-of-year bonuses); they saw lateral hiring off to a chilly start, with 74 total lateral moves among associates and partners in January. Ninety made the move during the same period in 2014.

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But a thaw appears to be coming! Even though The American Lawyer reported that, nationally, legal employment is still well below its pre-recession peak and is more or less flat, the D.C. market is making up ground and is on track to rack up its best first-quarter post-recession. Overall, our Autoregressive Integrated Moving Average (ARIMA) model predicts that 2015 should be a banner year for the D.C. associate market and will grow stronger as the year progresses.

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That said, not all firms and practice areas will reap equally the benefits of increased demand. As Citi Private Banking and Hildebrandt Consulting noted in their 2015 Client Advisory, “The beneficiaries of the uptick in demand tend to fall into two categories — those with strong brand-name transactional practices, or firms who have demonstrated value to their clients by offering quality work at the right price, while creating a well-managed cost structure to maintain or improve their margins.” Firms with less demand may be those with ill-conceived growth strategies; that depend too on litigation; or maintain top heavy, expensive leverage models, among other reasons. Likewise, when — after launching last week — Big Law Business asked readers what the “hottest,” most active practice area is, the unscientific results were consistent with what Lateral Link’s recruiters are seeing in the D.C. market: Transactional activity has been rebounding, and commercial litigation hiring has been waning.

HIGH-DEMAND PRACTICE AREAS FOR ASSOCIATES

Firms that did not hire corporate associates during the recession are now finding mid-levels in short supply. In particular, D.C. corporate practices need associates with experience with traditional general corporate work as well as tax and real estate practices. Solid candidates from firms with traditionally strong reputations for corporate work – especially candidates relocating from New York firms – will find a seller’s market. In the current market, 2009 and 2010 graduates account for 51% of the current demand.

Intellectual property associates remain in demand, particularly associates with advanced degrees in a hard science and patent prosecution experience. Firms are increasingly seeking associates in “newer” practice areas, like technology transactions/licensing/outsourcing and privacy/data security.

PARTNER DEMAND

The partner and associate market have operated with surprising synchronicity since 2011, and Larry Latourette, a principal at Lateral Link, expects “a strong lateral year in D.C.” Nationwide, our forecast projects that 2015 will be the second best post-recession year for the partner market, after 2011.

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