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A Brief Overview of Compensation in the California Legal Market

A Brief Overview of Compensation in the California Legal Market

Experienced Los Angeles Legal Recruiters

For attorneys looking to move to a new position, whether in Biglaw or at an in-house legal department, there may be a number of considerations that they are taking into account as they explore their options: lifestyle, culture fit, opportunities for advancement, opportunities to do interesting work, etc.  Perhaps the central consideration, however, is that of compensation.

California boasts a thriving legal market, but attorneys may not be wholly aware of the dynamics that are impacting compensation on the California legal market.  Let’s take a brief look.

General Trends to Consider

High Turnover Rates

As with many other industries, the legal industry is seeing higher turnover rates.  Attorneys are beginning to explore their options more aggressively when they are dissatisfied with various aspects of their employment.  As a result, legal industry employers are becoming increasingly concerned with the “personality suitability” of an attorney-candidate for the workplace.  It is not enough for an attorney to be highly-qualified.

In-House Growth, Though Spending Remains Strong

In-house legal departments continue to grow and diversify, which may make such departments a strong option to explore for attorneys who are still somewhat early in their career — in the past, in-house legal departments were seen as static and slow-moving, but this perception is changing.

It’s worth noting that spending on outside counsel remains strong, so despite internal expansion in the in-house context, it does not appear that high-end Biglaw work is being cannibalized.

Performance, Compensation, and Expectations

Salaries are increasing across the board, but employers seem to be concerned about performance metrics, and many are linking those performance metrics to compensation in some way, whether by offering bonuses that are more closely tied to performance, or by establishing a higher floor for billable hours.  Further, employers are requiring younger attorneys (third and fourth-year associates, for example) to shoulder greater responsibilities in the workplace.

Biglaw Compensation

Biglaw compensation is lockstep and structured across-the-board.  Compensation (salary and bonus) begins at a set amount for all attorneys of a given “entering class,” and increases by a pre-established amount on an annual basis.

Prestigious California firms tend to match (or come close to) salaries being paid out at the largest Biglaw firms in New York City.  As such, starting salaries hover around $190,000 in California Biglaw, though annual compensation increases may differ from firm-to-firm.  It is not until an associate reaches junior partner status that they begin to see a real shift in their compensation (at which point they will receive a cut of the business they bring in).

In-House Compensation

In-house compensation is much more varied than Biglaw compensation, as the legal department is not an autonomous entity.  It must answer to the needs of the larger organization that it serves.  This can be a positive or a negative, depending on your perspective, career goals, and expectations.

In Silicon Valley, for example, in-house legal departments in large tech companies frequently offer incentive structures that reflect that typical of other professionals in the industry — you may be offered a slightly lower salary, or slightly lower yearly bonuses, but be offered significant alternative compensation in the form of stock options.  If you were to work for the in-house legal department of a bank, on the other hand, then it’s more likely that you will see a traditional compensation structure (in addition to a more traditional work hierarchy).

It’s worth noting that in-house compensation tends to trail that of Biglaw at every level of experience.  An associate attorney in Biglaw will almost certainly earn more than in-house counsel of equivalent experience.  Similarly, a junior partner in Biglaw will almost certainly earn more than an Associate General Counsel of equivalent experience.  The delta of this difference can vary quite significantly depending on the in-house legal department, however, as some are more willing to offer competitive compensation to secure (and keep) high-quality attorneys.

Contact Garb Jaffe & Associates for Guidance

Are you an attorney interested in making the transition to another firm or in-house legal department in California, or in making a more transformative change in your legal career?  We can help.

Here at Garb Jaffe & Associates, our experienced Los Angeles legal recruiters have spent decades helping attorney-candidates navigate challenging hiring processes.  We provide comprehensive assistance from beginning-to-end: identifying suitable landing spots for the attorney-candidate, editing the resume, practicing interviews, and advising on various other matters throughout the process.

Legal recruitment can be something of a confusing “black box” for attorneys, but it’s actually rather straightforward.  We believe that transparency is the best policy, as the dynamic of legal recruitment is quite beneficial for attorney-candidates.  As legal recruiters, we are paid by employers to find them suitable placements — we connect qualified attorney-candidates with law firms and in-house legal departments looking to hire.

Attorney-candidates do not pay for their placement.  Further, we are not paid until six months after a placement, and only if the attorney is still working with the employer, so we are incentivized to secure ideal, pleasing placements for attorney-candidates.

Call 310-207-0727 or send us a message online to connect to an experienced Los Angeles legal recruiter at Garb Jaffe today.

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