General Counsel or Big Firm Attorneys: Who Makes More?
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Above the Law reports that in 2020, Major Lindsey & Africa surveyed partners in “Am Law 200 size firms.” They found that average compensation was more than $1 million. The ALM Intelligence 2020 Law Department Compensation Benchmarking Survey found that general counsel and chief legal officers earned an average total compensation of $573,000. On average, attorneys make more money at a large law firm than serving as a general counsel.
The article examined the pay packages of the top 100 highest-paid general counsels compared to partners of top BigLaw firms (as measured by profits per equity partner). The results showed that on a cash compensation basis, equity partnership is more lucrative than being a GC.
Big Law Partners Make a Tidy Sum
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. Researcher were not able to find out how much the 100 best-paid BigLaw partners earned during a comparable period. Nevertheless, they noted that the top firm in the Am Law ranking (Wachtell) had 85 equity partners and profits per partner of $6.33 million.
There were only two general counsels with cash compensation higher than $6.33 million: Alan Braverman of Disney, who earned $8 million, and Eric Grossman of Morgan Stanley, who earned $6.94 million. 38 Am Law firms disclosed profits per equity partner higher than general counsel cash compensation, which averaged $2.42 million. However, there is a factor that makes this picture more complex: stock options.
Have Things Changed in the Past 10 Years?
After an analysis of the 2010 editions of the same surveys, researchers found little change. In the 2010 General Counsel Compensation Survey, the top 100 general counsels average total cash compensation was $1.56 million. Wachtell’s profits per partner were $4.3 million, a figure exceeded by just one general counsel. Am Law firms had higher profits per equity partner than that $1.56 million general counsel average.
General counsels rank in the middle when examining compensation growth over that 10-year period. For law firms, leaders included Kirkland & Ellis (108%) and Simpson Thacher (83%). Paul, Weiss (75%), Cravath (63%), and Sullivan & Cromwell (57%) were not far behind.
The top 100 general counsel come next at 55%. Next comes law firms Cahill Gordon (51%), Wachtell (47%), Quinn Emanuel (46%), Boies, Schiller (17%), and Irell & Manella (8%).
Stock Options for General Counsel Make a Difference
These comparisons hide some crucial factors, including the benefits of acquiring equity. The highest-earning general counsels receive a significant part of their compensation in equity. Considering stock options, some general counsel positions begin to appear much more attractive.
So it is necessary to take another look at the 2020 surveys. When accounting for equity compensation, the number of GCs ahead of Wachtell’s profits per partner rises from two to 41. In fact, some of the general counsels receive total compensation that would exceed that of even the highest-paid BigLaw rainmaker. For example, Chewy’s general counsel, Susan Helfrick, received total compensation of $30.3 million, but less than $1 million of it was in cash. Also, Apple’s GC Kate Adams pocketed cash compensation of $3.56 million, but her total compensation equalled $25.2 million.
With law firms, profits per equity partner gives little signal of the payoffs that come to the top rainmakers. Because of this, firms have a wide range of compensation ranges. At the most traditional end of the spectrum, a firm’s highest-paid partner might get four times the pay of the lowest-paid partner. But at a firm with more aggressive “eat-what-you-kill” framework, that ratio may be 10 times or higher.
In a 2018 New York Times article about the lateral talent battles, there were reports of eight-figure pay packages for superstar recruitments at firms such as Kirkland & Ellis and Paul, Weiss. No one is sure just how many BigLaw attorneys have reached $10 million, but the lateral market for partners with a strong book of business remains extremely attractive and in demand.
About the General Counsel and Attorney Data
For the general counsel compensation data, researchers reviewed the top 100 highest-paid GCs as listed in the 2020 ALM Intelligence GC Compensation Survey. However, this data isn’t comprehensive. To wit: ALM compiles its data from proxy statements filed with the SEC; as a result, just public companies are included. The article’s source for BigLaw partner compensation was the 2020 edition of the Am Law 200 ranking.