Canada’s improving economic climate might be starting to translate into more jobs for small Canadian law firms, according to the latest compensation survey conducted by Canadian Lawyer. Of the 256 firms that answered the question, 34 per cent said they would hire more lawyers in the coming year and 63.7 per cent say they are planning to keep the same number of lawyers on staff. Only 2.3 per cent said they were planning to downsize.
The survey was conducted online with the managing partner or chief legal officer from firms or in-house legal departments responding; 315 came from small firms or legal departments that had one to nine lawyers in the team, followed by 70 respondents from organizations staffed with 10 to 49 lawyers. There were only 18 respondents coming from legal teams of 50 lawyers or more.
More than 83 per cent of respondent law firms reported 2009 annual gross revenue (before taxes and partner distribution) of under $5 million; 8.5 per cent had earnings between $5 and $10 million; and eight per cent had earnings over $10 million, including 3.2 per cent with earnings over $200 million.
Last year was one of economic austerity, and it is not surprising that more than half of the firms polled, 57 per cent, did not give bonuses to their associates in 2009, while 43 per cent did. However the Canadian Lawyer compensation survey finds the earnings of partners did increase in 2009 compared to 2008, averaging about seven per cent.
When it comes to compensation for partners, the 193 firms that provided information on the subject show that a large part of the respondents, 44 per cent, make between $51,000 and $150,000 per year with 22 per cent each in the ranges of $51,000 to $100,000 and $101,000 to $150,000. Seven per cent of the partners are in the highest pay bracket surveyed, $450,000 and up, while 9.7 per cent are in the lowest bracket, up to $50,000. Please see accompanying tables and charts for full results.
Looking at the compensation of associates, the median income progressed with each year for experience, as is to be expected, starting nationally at $62,000 for those called to the bar in 2009 and going up to $100,000 for those called in 2002 and earlier. The sample size of 70 is made up of mostly smaller law firms. See the accompanying tables for more detailed numbers.
In the survey’s findings for in-house lawyers, the median income for general counsel at the director level was $135,000, with the lowest reported annual income being $60,000 and the highest $300,000.
Higher up the food chain, general counsel at the executive level have a median income of $195,000, with the lowest reported salary being $60,000 and the highest standing at $900,000.
An improving economic climate also led to more companies giving out bonuses this year, with 69 per cent of in-house departments surveyed reporting they gave bonuses to their lawyers in 2009, while 31 per cent said they did not.
Compensation often can be measured in more ways than just salaries. Respondents were also asked if their company offered benefits, with an overwhelming majority of almost 96 per cent saying that they do. In addition, 67 per cent said their company offers other things like paying for professional development, health club memberships, and other perks.
There were 121 in-house law departments that participated in the compensation survey. Of those, 37.2 per cent had an average legal spend under $500,000; 25.6 per cent had a spend between $500,000 and $1 million; 14.9 per cent between $1 million to $2 million; 12.4 per cent between $2 million and $5 million; 4.1 per cent between $5 million and $10 million; and 5.8 per cent had a legal spend of more than $10 million in 2009. The respondents represented many sectors including government (municipal, regional, provincial, federal, and First Nations — including boards and tribunals); financial; industrial/manufacturing; resource-based; service; technology; and non-profits.
Geography and methodology
In the survey, 75.6 per cent of those participating identified themselves as regional law firms or companies, while 24.6 indicated they were national. More than half of the respondents, 53.2 per cent, said they had offices in Ontario; followed by British Columbia with 27.3 per cent; Alberta 26.8 per cent; Quebec 19.3 per cent; Nova Scotia 10.5 per cent; and less than 10 per cent with a presence in the remaining provinces and territories. Firms were allowed to declare offices in multiple provinces and territories.
When Canadian Lawyer looked at compensation, the figures are base salary and do not include any bonuses or perks, which can often be substantial. They were dealt with in other questions. Also, since many respondents gave a salary range rather than a solid number, the average salary between the high and low point was included in the survey’s calculations.
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