HANOVER, Md.--(BUSINESS WIRE)--For the first time since its survey began in 2012, General Counsel and Chief Legal Officers in the U.S. reported that their total actual cash (TAC) compensation has decreased, by 4% since 2021, to an average of $556,794, according to the 2024 Global In-House Counsel Compensation Survey released today by Major, Lindsey & Africa, the world’s largest legal search firm. As companies grapple with persistent inflation, high interest rates, and other economic headwinds, much of the decline in pay is attributable to precipitous drops in bonuses: GCs and CLOs collectively saw their bonuses fall by 15%, while their base pay increased just slightly, up by less than 1% in the past two years. Despite the role of the GC expanding significantly in scope and responsibility, economic headwinds have forced many in-house legal departments to instead rely more on non-cash incentives, like flexible scheduling and work-from-home opportunities, to attract and retain their top talent. The survey was conducted in association with Western Management Group (WMG), with more than 2,100 attorneys responding from 46 countries.
While budgets may be more constrained, legal departments are nonetheless placing a premium on grooming the next generation of leadership. Globally, higher-level managing counsel like Deputy General Counsel (DGCs) and Associate General Counsel (AGCs) together saw their TAC increase by 8% between 2021 and 2023. Similarly, Counsel – responsible for executing the crucial day-to-day work of an in-house legal department – were rewarded for their contributions with a 19% increase in TAC.
“While companies are generally watching their spend closely, which is reflected in the overall decline in GC and CLO pay seen in our survey, they are nonetheless very eager to incentivize their rising talent to stay and grow into their company’s next generation of leadership,” Heather Fine, a Partner in MLA’s In-House Counsel Recruiting group and a co-author of the survey. “As the GC role becomes more multifaceted and takes on more responsibilities across the organization, companies are working to retain their top talent and placing a bet that their future leaders may already be in-house and can eventually ascend into the top role with a more nuanced familiarity of the business that comes over time.”
“Given it’s an election year that may bring with it a lot of change, it makes a certain amount of sense to see legal departments make conservative decisions around compensation,” added Joanna Herman, a Partner with MLA’s In-House Counsel Recruiting group and co-author of the survey. “Regardless, at MLA, we’re continuing to see compensation offers remain extremely competitive for many GC positions. Instead, it’s bonus payouts – which are typically most impacted during challenging economic periods – that are driving most of the overall declines in GC and CLO compensation.”
As more attention is brought to the issue of pay equity, the gender pay gap in in-house legal departments has narrowed somewhat in recent years. In 2023, in the U.S., female GCs and CLOs took home about 12% less in total compensation than their male colleagues, at $527,525 compared to $596,180 – and which represents a decrease from the 15% gender pay gap seen in 2021.
Among GCs globally, though, the pay gap becomes more stark, with female GCs receiving 28% less in TAC than their male counterparts. Bonuses, which are often awarded based on subjective factors that can place women at a disadvantage, are a major driver of this disparity. For instance, male GCs made 43% more than women in bonuses last year, and their target bonuses for this year are 46% higher than those for women. Compensation at the other end of the seniority spectrum is similarly troubling, as male counsel out-earned their female colleagues by 15%.
There are some roles, however, where this gap narrows considerably or even disappears. The C-suite in particular appears to be considerably leveler, as in 2023, female CLOs and Chief Compliance Officers (CCOs) earned 2% and 3% more than their male counterparts, respectively. While men are still receiving higher pay in most mid-level roles, the difference is reduced to single digits and even favors women in Assistant GC positions.
“With the wage transparency laws being enacted in more states, and the issue of pay equity being discussed more openly, female GCs and CLOs are in a better position than ever to negotiate to be paid equally to their male colleagues,” said Edina Beasley, a Partner in MLA’s In-House Counsel Recruiting group and a co-author of the survey. “It’s also a positive sign to see that, in the CLO and CCO positions, women are actually outearning men. However, the gender pay gap for GCs remains considerable, at a 28% difference between male and female compensation, making it clear that we still have a long way to go.”
Other notable findings of the survey include:
-
Public company legal leaders are significantly outearning their counterparts at private companies: Both CLOs and GCs at publicly-traded companies received substantially more TAC in 2023 than those at private companies: Public company CLOs’ and GCs’ TAC was 38% higher.
- The largest disparities between public and private company legal leaders were seen in bonuses. 2024 bonus targets for public company GCs and CLOs are 72% and 68% higher, respectively, than those at private companies.
- In 2024, GCs and CLOs in the real estate and travel/leisure/hospitality industries – both industries that experienced their share of pandemic-era challenges – are expected to receive the highest total cash compensation in 2024, at $734,089 and $702,092, respectively. In fact, as tourism demand continues to rebound, CLOs in the travel/leisure/hospitality industry are expected to see the largest jump of any industry between actual cash compensation in 2023 and target cash compensation in 2024.
- North American GCs and CLOs are much more highly-paid than their global counterparts: In 2024, North American CLOs’ average TTC is expected to be $668,130, which is 25% higher than those in the APAC region and 35% higher than those in the EMEA region. Similarly, North American GCs’ total compensation this year is expected to reach $544,487, 15% higher than their counterparts in EMEA and 55% higher than those in the APAC region.
Compensation for CCOs across all industries has also increased substantially in the past two years. In the U.S., CCOs saw their base pay jump by 36% since 2021, to an average of $403,510, while their total cash compensation soared by 72%, from an average of $430,191 to $740,707. Much of these increases have been driven by bonuses, which increased by a staggering 181% for CCOs from 2021 to 2023, to an average of $484,235.
“The market is reflecting the increased emphasis on culture and compliance – and the expanding role this is creating for CCOs,” said Jeannine Lemker, Managing Director in MLA’s In-House Counsel and Board Services groups and a co-author of the survey. “With the rise of ‘conscious capitalism’ and monitoring or audit-centric regulatory requirements (e.g., the Digital Markets Act or CSRD), compliance is asked to flex and expand to absorb new requirements in ESG, partner to push employee culture forward, and bring invaluable expertise and leadership. In parallel, certain regulators have become more direct and pointed in their view that the CCO (and compliance) should serve as an independent executive team function, elevating the CCO to the executive leadership team as a peer to Chief Legal and Financial Officers.”
The full text of Major, Lindsey & Africa’s 2024 Global In-House Counsel Compensation Survey is available here.
About Major, Lindsey & Africa:
Major, Lindsey & Africa is the world’s leading legal search firm. The firm, founded in 1982, offers a range of specialized recruiting to meet the ever-changing legal and governance needs of law firms and corporations and to support the career aspirations of talented lawyers, compliance professionals and C-suite executives working to advance their career in the boardroom. With more than 25 offices and 200-plus search consultants around the world, Major, Lindsey & Africa uses its market knowledge and experience to partner with organizations to fulfill their legal and governance talent needs and provide solutions to increase team efficiency and effectiveness. Major, Lindsey & Africa is an Allegis Group company, the global leader in talent solutions. To learn more about Major, Lindsey & Africa, visit www.mlaglobal.com and follow MLA on LinkedIn, Twitter, Facebook and Instagram.