Double-digit raises for in-house counsel: survey

In-house counsel, particularly those with one to three years of experience, are expected to see a higher than average salary increase this year, according to a new survey by Robert Half Legal.

According to the Robert Half Legal 2007 Salary Guide, salaries for corporate lawyers in Canada are generally projected to rise 11.3 per cent this year, with the base compensation for in-house lawyers in their first three years of practice rising 12.4 per cent on average compared with 2006. Salaries for first-year associates working in-house are also projected to rise 12 per cent this year.

In general, average starting salaries for lawyers in Canada are expected to rise 9.2 per cent in 2007, while average starting salaries for all legal professionals are projected to go up 8.3 per cent.

Lara Dodo, a vice-president with Robert Half Legal, told Law Times there is also a trend relating to specific practice area experience, in areas such as corporate compliance, Canadian investor confidence measures, and Sarbanes-Oxley Act compliance.

The survey also asked members of the legal community in both Canada and the United States their opinion on which would be the fastest growing practice areas over the next 12 months. One quarter of those surveyed expect issues of ethics and corporate governance to be the fastest growing area this year, followed by litigation with 23 per cent of the vote, and intellectual property at 19 per cent.

“Ethics and corporate governance was the frontrunner, which is again linked back to Canadian investor confidence measures and Sarbanes-Oxley. So experienced lawyers with regulatory compliance backgrounds will be increasingly sought after by legal departments [that] are dealing with those issues,” said Dodo.

In addition to in-house counsel, first-year associates are projected to see some of the largest increases in base compensation compared with last year.

In particular, first-year associates in small firms can expect one of the largest increases in base compensation overall, up 10.8 per cent compared with 2006. Salaries for new associates working in large and midsize firms are also expected to increase by 9.9 per cent.

Large-firm associates in their first three years of practice will also likely see a higher than average salary increase this year, according to the guide.

“New business development and continued regulatory activities are driving the demand for legal professionals with specific practice area expertise,” specifically in the areas of corporate governance, litigation, and intellectual property, according to Dodo.

“A new grad has had that summer experience specific in those practice areas, that’s why we’ve seen this bump in increased compensation for those first-year associates,” she added.
“Growth in new business initiatives is continuing to drive demand for skilled legal professionals, so to meet these demands law offices are filling vacancies. Previously they were placed on hold.

“They are also creating new positions and planning for future development, so there’s much more strategic management of infrastructure,” said Dodo.

She added that, therefore, “legal employers are beginning to witness a shortage of skilled candidates specific to those hot practice areas and, as a result, they’re having to look at offering more competitive compensation and focusing on retaining top talent.”

In terms of lawyers with more than four years of experience, it is the large-firm lawyers who will see the largest salary increase this year, up 9.1 per cent over last year.

According to the guide, the eastern provinces in particular “are seeing hiring activity in litigation and securities due to growth in the financial services sector,” while those with expertise in the banking, commercial real estate, and finance sectors are most in demand in Toronto.

In Ottawa, the high-tech industry is making a steady comeback, says the study, which is putting patent lawyers with business experience in higher demand with larger law firms.

“In many provinces, midsize law firms and corporate legal departments are recruiting experienced legal professionals who possess the skills and background to deliver superior service. Lawyers are sought for corporate transactions, information technology patents, and tax law.

“Those with highly specialized qualifications such as engineering, biotechnology or finance can negotiate higher salaries. Senior-level lawyers with portable books of business are also in strong demand,” according to the guide.

In other areas of the legal profession, experienced law clerks and paralegals at large and mid-sized firms are expected to see the largest salary increases in that sector this year, with a senior or supervising law clerk working at a midsize firm with more than seven years of experience earning 10.7 per cent more this year.

Information in the guide was based on factors such as expected demand for positions, research on hiring trends conducted by Robert Half Legal, the North American placements made by Robert Half Legal, a review of 2006 average starting salaries, and the projection of current trends into 2007.

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