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When the U.S. economy tumbled in 2008, the crisis was akin to an earthquake. Rattled by mounting financial uncertainties, businesses scrambled to stabilize themselves with serious cost reductions.
Not surprisingly, legal department consultants, staffing firms and compensation experts interviewed for InsideCounsel's January 2009 compensation report, "Salary Slump," predicted layoffs, budget cuts and salary freezes across the nation's law departments as the recession became a grim reality.
What They Want
Knowing what skills employers desire in potential employees is a must in any industry. In the in-house field, sought-after expertise depends highly on the legal hurdles companies are facing. The practice areas earning the heftiest paychecks in 2010 were reflective of corporate America's preoccupation with precaution.
Ninety-three percent of companies in Hildebrandt's survey said salary increases at all attorney levels are based on merit--meaning they want their lawyers to prove their worth. This mindset certainly isn't new, but the data is a reminder to in-house counsel that they must work hard to earn rewards and ensure job security.
Working for Bonuses
Scanning through Hildebrandt's annual law department salary survey, one data set practically pops off the page. Bonuses, the survey results indicate, have jumped an average of 73.5 percent between 2009 and 2010. Even the significantly lower median increase of 10.2 percent is enough to make jaws drop in envy.
Long-term incentives--deferred compensation such as stock and equity--may not have returned to pre-recession levels, but they're likely to become increasingly important components of compensation packages in years to come.
Supply and Demand
One thing that didn't change during the recession was law firms' dominance in the salary arena for legal professionals. Even as law firm salary growth has slowed, it has outpaced in-house salaries, and it continues to be true that experienced law firm attorneys who make the move in-house typically face salary cuts.