It’s the dream of many in-house attorneys – and even many of their colleagues working at law firms – to earn a spot on the list that shows the highest-paid general counsel.
But before going on a personal spending spree, specialists in the placement of lawyers at companies caution there are some common threads on each person who makes such a list.
They may have wide responsibilities, the law department at the company where they work is large, the company is large, too, the company made profits, and the GC may have had a role in making those profits, according to John Gilmore, managing partner at BarkerGilmore.
“The general counsel contributed to the business’s success,” Gilmore explained in an interview with InsideCounsel.
GCs on the list may also have attended one of the nation’s most respected law schools, may have worked at a prominent law firm and have proven track records. In addition, to get such high compensation, it may mean the GC has held the position at the same company for a while, Gilmore said. In fact, upon their retirement, the new GC will not be earning as much because they may be new to the company, as well as to the position.
For instance, CBS GC Louis Briskman retired at the end of last year. Briskman first joined CBS in 1975 when it was Westinghouse Electric Corp. He ranked No. 1 on the list of highest paid GCs in 2012, and was No. 2 in 2013. His last year’s total take-home pay was almost $24.9 million.
There are some other qualities found among GCs who earn among the highest compensation levels. Victoria Reese, global head of Heidrick & Struggles’ Legal, Risk, Compliance & Government Affairs Practice, said in an interview that the person has the “ability to look beyond what the law says to what are reputational risks.” That means seeing how something will be viewed by shareholders, government officials and the public. They advise the board and have the ability to retain, develop and hire the right legal team. The GC knows when to run something up the chain of command, too, “so there are no surprises,” she said. The top GCs also can work with fewer resources given that private law firm’s rates and legal department’s salaries may be increasing. They also need to be able to manage legal risk across the world, dealing with different jurisdictions. They need too to be creative, coming up with options to give the company the same result without impacting on risk. And they need to fit with the company’s and board’s culture, as well as being a “true business partner” to the board and CEO, she said.
“The general counsel is critical to the overall strategy of the company,” Reese said. “General counsel are now at the table when new opportunities are being discussed.”
There is some turnover among the GCs who work at companies listed among the Fortune 500. Gilmore estimates 10 percent of the GCs on the Fortune 500 are new each year, mostly because of retirements.
Those who make the top paid GC list, such as Brackett Denniston at General Electric, who was ranked No. 1, last year, have impressive credentials as well as charisma and leadership skills, Gilmore said.
Though there appears to be just one woman among the top ten highest paid GCs last year, Gilmore said that 21 percent of the Fortune 500 companies have women GCs. That is an increase of about 17 percent over the past five years.
That number will be increasing, placement firms said, and eventually will lead to more women getting on the list of top ten highest paid GCs.
“That number is going to change significantly over the next five years,” Gilmore said. He points out that 43 percent of the placements BarkerGilmore had over the past three years were women.
When it comes to women getting the top GC positions, “progress has been slow,” Gilmore said. “We’re just turning the corner.”
CEOs and board members are looking for more women and minorities who have excellent legal backgrounds and interpersonal skills. Many are being hired for succession planning functions, too.
One example of a top woman GC is Marcia E. Backus, who has been vice president and GC at Occidental Petroleum since October 2013. Previously, Backus was a partner at Vinson & Elkins, where she headed the firm's Energy Transactions/Projects Practice Group. Also, while in private practice she worked with Occidental on multiple oil and gas transactions.
Clearly, there is still room for improvement when it comes to women getting the higher salaried GC jobs. “It’s getting better,” Reese said, pointing out that law firms and corporate legal departments are adding women attorneys and often adding responsibilities given to women lawyers. But they need to do more to get women in leadership positions. For instance, some GCs will have communications and human resources reporting to them, and that would give a female GC more responsibility and visibility. Compliance is another sector where women may find opportunities.
In Backus’ case, the company hired her away from a law firm. Other GCs may be named after one Fortune 500 company hires a GC away from another company, or the company may choose to promote someone from within the same company, such as a deputy general counsel.
Many come with or may have had “highly visible, high-level positions which bring credibility to the law department and the company,” Gilmore adds. “No one questions how they got the position.”
Looking ahead, the highest paid GCs may include more names of general counsels who work at tech firms, an increasingly number of which are having IPOs and going public.
In the meantime, attorneys look forward to being on the list of the highest paid GCs.