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In-house legal salaries 'trail inflation'

Posted by: Laurence Simons 07/01/13

British in-house lawyer salaries have fallen in real terms in recent years as their average value increases have not kept up with the pace of inflation, according to a new report.

Salaries rose by 2.7 per cent in the year to September 2012,  research by Incomes Data Services (IDS) found, but this did not equate to much in the real world, with inflation averaging 3.7 per cent in the same period.

While this may have some benefit in terms of allowing people with in-house legal jobs to subtly leave their wage slip lying around to impress friends and acquaintances who have not kept up to date with the vagaries of the British economy over the last 12 months, it still leaves lawyers earning less than they might expect given the increasing importance of their role.

Relief could be on the way, however, with IDS suggesting that several positive signs indicate that people with in-house legal positions are set to see improved remuneration over the coming years.

IDS principal researcher Nasreen Rahman said: "Businesses have been keeping a tight rein on staffing costs since the recession and pay growth for support staff, even for in-house lawyers, has been sluggish."

However, in-house counsel have become extremely popular lately as a swathe of high-profile regulatory mishaps reminded companies that getting their legal advice from their favourite hairdresser might fill the awkward gaps in conversation when he's trimming behind the ears but doesn't ensure they will avoid litigatory mishaps.

"An increasing number of organisations are now looking to bolster their in-house legal teams by bringing specialist talent in-house in order to reduce their reliance on external counsel.

"In-house lawyers may miss out on the larger bonuses, salaries and profit shares on offer in private practice law firms but they are willing to trade this off for a better work-life balance with more regular working hours," explained Mr Rahman.

This follows a report from Consero that suggested in-house legal teams are having to cope with shrinking budgets as economic uncertainty and attempts to reduce outgoings are encouraging businesses to cut funding across all aspects of their work.

The 2012 Chief Litigation Officer Data Survey found that 66 per cent of firms kept their in-house legal teams the same size in 2011 and 2012, while only 27 per cent increased their numbers.

With the global economy looking unlikely to recover strongly over the coming months, it seems UK legal teams will need to continue to make do with what they can get.