Wanted: one C-level executive to act as trusted confidant on legal matters and chief enforcer when things go awry; must be versed in ethical behavior and a law school graduate; knowledge of corporate litigation and regulatory risks is essential; expected to lead battles against meddlesome regulators. Long hours, good pay.
Welcome to the world of the modern general counsel. And get this: People actually want the job.
Volkert
Indeed, Charles Volkert, executive director of staffing firm Robert Half Legal, says the role of general counsel has “expanded significantly” in many corporate cultures. Besides their role as legal adviser to the board and the chief executive, Volkert says general counsels are expected to be “savvy business strategists, the interpreter of the regulations that apply to their organization, to assess risk and to manage outside counsel.”
The demand for skills that extend far beyond technical legal expertise has drawn lawyers from varying backgrounds into the corporate world, as evidenced by numerous high-profile names taking general counsel jobs. One such example is James Comey; after a long and successful career that culminated in a stint as U.S. attorney for Manhattan and then deputy attorney general of the United States, he left the Department of Justice in 2005 to become general counsel of the defense contractor Lockheed Martin Corp.
Comey
“I had five children about to go to college one after another, after a career in public service I needed to make some arrangement for that,” Comey jokes about his career move.
A lawyer of Comey’s caliber certainly has his pick of where he could work. But the choice between joining a large law firm or going in-house was “an easier call” than he expected, he says.
“In-house jobs, especially at a company the size of Lockheed Martin, are similar to what I was doing at the Department of Justice: helping manage a big situation with lots of lawyers and a broad scope of matters,” he says. “I enjoyed doing it and I liked the idea of having a single client, of being part of an organization, and being involved in strategy.”
Baier
Given today’s regulatory climate, the appeal of a lawyer with prosecutorial experience is obvious, experts say. “They have some sensitivity to what will catch the eye of the SEC or other governmental enforcement bodies,” says Carl Baier, president of recruiting firm Baier Legal Search and a former attorney general for California. “Companies are looking for someone who can keep them out of trouble and who has good judgment in terms of securities compliance. That has become front and center.”
“It’s a public way for a company to send the message that if their house isn’t in order, they’re going to get it in order.”
—Martha Ann Sisson, Principal, Garrison & Sisson on recruiting former prosecutors
Martha Ann Sisson, principal of boutique attorney-recruiting firm Garrison & Sisson, says hiring a former prosecutor also can be a way to make a statement: “It’s a public way for a company to send the message that if their house isn’t in order, they’re going to get it in order.”
When asked how his prosecutorial background has helped him in his role at Lockheed, Comey cites an ability to work under pressure and juggle multiple priorities simultaneously. His trial experience doesn’t hurt either.
“[Trying cases] enables you to take a set of facts early on and picture where they’re going to go and how they might be viewed by an audience without your particular viewpoint,” he says. “A trial lawyer instinctively looks at and cross-examines the facts and thinks about how a judge and jury might view them. That enables you to see down the line.”
Where Good GCs Come From
While some companies look to the public sector for talent to lead their legal teams, recruiters say the vast majority of GCs still come from corporate transactional backgrounds. “Corporate transactional is still the foremost background for GCs,” says Volkert, followed by large commercial-litigation experience. Experience with ethics and in corporate governance and business management are also major plusses.
As the economy has improved and the demands on corporate legal departments have risen, Volkert says he’s seen “expansive growth” within those departments in the last 12 to 18 months, well beyond the general counsel’s office. Some companies are creating in-house positions that didn’t exist several years ago to take on specific areas of work, since general counsels now are expected to be “more focused on driving the right information to the board and CEO.”
Companies are filling out their legal departments with specialists “because the GC is being pulled in so many different directions,” Volkert says. “Departments that were three to five attorneys in some cases are now 10 to 20 attorneys.”
Krebs
All that is not to say the job description for a corporate counsel has been rewritten entirely. Fred Krebs, president of the Association of Corporate Counsel, says that while the job is now in “a much more high-profile environment … the skills haven’t changed.”
Besides knowing the law, Krebs says general counsels must have good judgment and the highest moral and ethical standards. “You also have to be courageous, willing to say no, and willing to say yes,” he says.
And more than ever, he says company lawyers “need to make sure that the board has the right processes in place and the right information to make good decisions.”
LEGAL BRIEFS
Some key findings from the Altman Weil 2006 survey:
The national median salary for chief legal officers in 2006 stood at at $280,000; senior attorneys' median salary was $140,000.
The national median bonus for chief legal officers was $132,000. Division general counsels received $104,000, senior attorneys $29,200.
Stock options for chief legal officers had a median fair market value of $919,400, more than twice the same group’s’ total cash compensation. Deputy CLOs received $230,100 in stock options, senior attorneys $87,900.
Size of law department is a key factor in compensation. Chief legal officers in departments with over 25 lawyers took home 88.9 percent more than the national median in total cash compensation. Deputy CLOs in large law departments earned 57.5 percent more than the national median.
Source
Base Salaries Up For In-House Lawyers, Bonuses Mixed According To 2006 Compensation Survey (Altman Weil, Oct. 31, 2006)
Sisson says much the same. Today’s general counsel is “increasingly becoming more of a strategic business adviser and less of a day-to-day hands on practitioner.” And while companies may need more lawyers with particular areas of expertise, the general counsel “is utilized more appropriately for big picture issues.”
Comey cites three hallmarks of the successful general counsel: “good judgment, common sense and the ability to manage and work well with people.” In addition, he says, “Good leaders in any public company now understand that ethics is different from compliance.”
Comey describes compliance as “understanding where the boundaries are on the field,” while ethics “is how you conduct yourself on that field within those boundaries.” They need to talk about how people need to conduct themselves “even when they’re not close to the sideline,” he says.
The good news: Like many other corporate jobs today, along with their increased responsibilities and risk, general counsels also are seeing higher salaries.
Wilber
“In the last three to four years, we’ve seen year-on-year increases in GC compensation,” says James Wilber, a principal at Altman Weil, which provides management-consulting services to legal organizations. “The market is getting better, both in that there’s more demand for lawyers in-house and in that companies are placing higher values on their legal people.”
While performance-based pay increased first (reflecting a lingering uncertainty about the economy), Wilber says now base pay is increasing as competition for in-house lawyers rises. Chief legal officer salaries increased 8 percent in 2006, according to the Altman Weil Law Department Compensation Benchmarking Survey. The national median CLO salary was $280,000 and median equity compensation hit $919,000, although bonuses were down slightly.
Sisson expects the compensation to continue to rise as companies try to stay competitive with law firms and market pressure. Including salary, cash bonus, and long-term equity compensation, some general counsels could see their annual pay approach $500,000—nearly the level of pay for an equity partner at well-heeled law firms.
“Such increased compensation reflects their increased role and is necessary to attract the ‘right candidate,’” she says. “It’s the most competitive type of position. It’s the job everyone wants.”
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