Tag Archives: In-House Counsel

Who Is Better Compensated: Elite Biglaw Partners Or Top General Counsel?

If you’ve paid any attention to the ballooning compensation figures of Biglaw partners in recent years, you already know that it pays to be an equity partner at a large firm. Meanwhile, as average partner compensation escalates, top in-house lawyers are being left behind.   

In 2020, a Major Lindsey & Africa survey of partners in “Am Law 200 size firms” found average compensation of above $1 million. The ALM Intelligence 2020 Law Department Compensation Benchmarking Survey found general counsel and chief legal officers earned average total compensation of $573,000. So, as a general rule, it’s more lucrative to be a Biglaw partner than a general counsel.

But what about at the very top end of the profession? In this article, we take a look at the pay packages of the top 100 highest-paid general counsels, in comparison to partners of top Biglaw firms (as measured by profits per equity partner). We find that on a cash compensation basis, equity partnership is more lucrative than being a general counsel. But the story is more complicated when taking stock options into account.

A quick note on sources. For general counsel compensation data, we look at the top 100 highest-paid GCs as listed in the 2020 ALM Intelligence GC Compensation Survey. This data set is not comprehensive. For one thing, ALM compiles its data from proxy statements filed with the SEC, so only public companies are included. Our source for Biglaw partner compensation is the 2020 edition of the Am Law 200 ranking.

It’s hard to outearn a top Biglaw partner

The General Counsel Compensation Survey ranks general counsels based on total cash compensation. The top 100 highest-paid GCs earned total cash compensation of $2.42 million on average. We don’t know how much the 100 best-paid Biglaw partners earned in the comparable period, but we can say that the top firm in the Am Law ranking — Wachtell — had 85 equity partners and profits per partner of $6.33 million.

Just two general counsels took home cash compensation higher than $6.33 million: Alan Braverman of Disney ($8 million) and Eric Grossman of Morgan Stanley ($6.94 million). Meanwhile, 38 Am Law firms had profits per equity partner in excess of the $2.42 million average general counsel cash compensation.

How does this compare to the situation a decade earlier? Analyzing the 2010 editions of the same surveys, we find that not much has changed. Based on the 2010 General Counsel Compensation Survey, the top 100 general counsels took home average total cash compensation of $1.56 million. Wachtell’s profits per partner were $4.3 million, a figure exceeded by just one general counsel. 28 Am Law firms had higher profits per equity partner than the $1.56 million general counsel average.

What about compensation growth over that ten-year period? From a growth perspective, who did better: the top 100 general counsels or the partnership of the top Am Law firms? The table below shows the results, ranked by growth rate. The law firms in the table were the top 10 firms in the 2010 Am Law 200. We see that general counsels fall in the middle of the pack, outpacing some partnerships and trailing others.

Group (equity partnership or GCs)10-year compensation growth
Kirkland & Ellis108%
Simpson Thacher83%
Paul, Weiss75%
Cravath63%
Sullivan & Cromwell57%
Top 100 GCs55%
Cahill Gordon51%
Wachtell47%
Quinn Emanuel46%
Boies, Schiller17%
Irell & Manella8%

But stock options can make a big difference

The comparisons above obscure some important factors. On the in-house side, it is critical to note that the very highest-earning general counsels receive a substantial portion of their compensation in the form of equity. Taking stock options into account, some general counsel roles start to look considerably more attractive. For example, revisiting the 2020 surveys, when accounting for equity compensation, the number of general counsels topping Wachtell’s profits per partner rises from two to 41. And some of the general counsels have total compensation that would exceed that of even the highest-paid Biglaw rainmaker. For example, Chewy GC Susan Helfrick had total compensation of $30.3 million (of which less than $1 million was in cash). Apple GC Kate Adams had cash compensation of $3.56 million, but her total compensation was $25.2 million.

On the law firm side, profits per equity partner gives little indication of the rewards that flow to top rainmakers. Firms vary widely in their compensation ranges. At the most traditional end of the spectrum, a firm’s highest-paid partner might take home 4x the pay of the lowest-paid partner. In contrast, at a firm with a strong eat-what-you-kill culture, that ratio may be 10x or higher. A 2018 New York Times article about the lateral talent wars reported on eight-figure pay packages for star hires at firms like Kirkland & Ellis and Paul, Weiss. It’s impossible to know how many Biglaw attorneys have breached $10 million, but the lateral market for partners with a strong book of business remains red hot.

Conclusion

There are a lot of reasons why an attorney might prefer to be a general counsel than a law firm partner. But viewed strictly through the lens of compensation, high-performing lawyers are typically better off staying on the law firm track. Of course, that doesn’t necessarily mean they should stick with their current firm. With Biglaw partnerships increasingly diverging in their approaches to compensation, it’s a mistake to assume that a partner with a given book of business will be paid similarly at any comparably prestigious firm. Productive partners have a variety of options — and it pays to know about them.

The Weight Of Blackness

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. Monique Burt Williams is the CEO of Cadence Counsel, where she helps corporations and other organizations diversify their in-house legal divisions as they strive to reflect a global economy.

I was five years old when I first felt the weight of being black in this country.

I was at day care, playing happily with a group of children at a water table. If I close my eyes, I can still hear our screeches as we gleefully plunked toys into the pool. At some point, I mistakenly dropped a toy tugboat onto the ground. A boy glared at me, snatched up the tugboat, hurled it angrily back into the water and yelled, “You’re black!”

There was a venom in his tone that was foreign to me, and I stood there frozen, not quite understanding what his words or this interaction really meant. All that registered in that moment was the negativity that dripped from his accusatory description of me. I could tell that everyone else was contemplating a similar thought because they had all stopped playing to look at me, waiting for my reaction.

Another little girl jumped to my defense and screamed, “No, she’s not black! That’s probably just dirt. We can wash it off.” She proceeded to pat tiny handfuls of water onto my face in her innocent attempt to smear that troublesome melanin away from my skin. Her efforts were futile, and disappointment washed over the group. I remember exactly how it felt when I blinked and hot tears rushed down my cheeks and into the cool droplets of water from the girl’s failed science experiment.

The group’s silent, collective stare made me somehow feel responsible for the moment and therefore obligated to fix it. I felt like it was my responsibility to lighten the mood, or offer up some sort of excuse, or distraction, or smile, or explanation, or apology for my blackness, having interrupted and dispelled the lightness of the occasion.

Finally, mercifully, a teacher walked over to inform us that it was time for lunch, and everyone just dispersed. That was it. The moment had passed. The teacher never saw or acknowledged my tears, and everyone simply went on with their day.

Those same children would go on to play with me year after year, but I carried a soul-soaked heaviness from that day that would rear its familiar head, in some way or another, for the rest of my life. It was the first time that I had experienced the burden of “otherness” – a panicked, gloomy pit in my stomach, like the feeling you get when the phone rings in the middle of the night or that nauseating tug at your insides as you prepare to attend a funeral.

Another funeral.

After days of protests and riots following the senseless death of George Floyd, the nation has witnessed yet another funeral for an unarmed black man who was murdered at the hands of law enforcement officials. Once again, racism has wreaked utter and complete havoc on our already taxed emotional and societal sensibilities, forcing some of us into the recesses of our minds and others onto the pandemic-ridden streets of our cities in search of an answer to that singularly unifying question: what, if anything, can be done in the wake of this chaotic pattern of destruction?

If I close my eyes, I can call up that scene from when I was five years old. I exchange the water table for a conference room. I swap out the kids for co-workers. I turn the toys into projects, and I replace the burden of “otherness” with the opportunity to effectuate real change.

When someone’s differences are called out and used against them if they happen to drop the ball, the aggressor must be pulled aside and addressed accordingly. When someone genuinely tries to defend and stand with the oppressed, but fails to do or say the perfect thing at exactly the right moment, they should be quietly counseled as to what might be more helpful in the future, not openly criticized and alienated. When someone takes on the unwarranted responsibility of smiling through the struggle, discreetly offer them a tissue and the time they need in order to recharge.

The perception of “other” begins with those in positions of power. Those in positions of power are overwhelmingly the owners of privilege. And when the owners of privilege fail to use that power toward meaningful change, they waste an opportunity to increase the widespread perception of the value of others. That is what we are missing: respect for the value of “otherness.”

That is why it is so universally dangerous to neglect the prioritization of a diverse workforce by resting in the comfort of working with homogenous teams. It perpetuates the idea that if you are “other,” you are of lesser value. It matters who you hire. It matters that your leadership teams reflect the customers that you serve. It matters what messages you send to your employees and to their families and to the world about your values and the ways in which you value their lives.

I stand with those CEOs who have committed to reinforce their diversity and inclusion efforts. I stand with the families of those who have lost their lives to senseless acts of hatred and bigotry. I stand with those who seek equality for all. And I stand with every five-year-old at every water table who has ever felt the weight of being black in this country. We will do better by you. We will.