The salary landscape for in-house lawyers has shifted dramatically over the past five years, as companies wrestle with how to attract and retain high-calibre talent without attempting to replicate the pay scales of private practice. Law firms, especially the US entrants in London, have continued to escalate associate and partner pay in response to competitive pressures, with newly qualified associates now commanding packages north of £200,000 and mid-levels earning considerably more. Against this backdrop, investment managers, technology scale-ups and regulated businesses are increasingly in search of general counsel and legal teams with the same level of training and expertise, but unlike law firms, their legal functions are cost centres, tied to wider corporate pay structures and budgets.
The demand for experienced first-time general counsel has risen markedly, with boards recognising the premium placed on those with a blend of private practice and in-house experience. For many companies, particularly those backed by venture capital or private equity, equity compensation has become an important lever to close the gap between in-house and private practice cash salaries. Regional divergences also persist: London continues to command the highest salaries in Europe, but roles on the US East Coast often offer more cash-heavy packages, while the Middle East provides a different incentive altogether in the form of significant tax advantages.
The pressure point for companies is clear. Those that underpay risk losing out on candidates capable not only of providing legal expertise but of exercising commercial judgment and leadership. Yet boards remain wary of being drawn into the spiral of law firm pay inflation, especially when their legal teams do not directly generate revenue.
The most attractive in-house packages emerging in the market today are not those that seek to compete head-on with private practice, but those that blend a competitive base salary—albeit below law firm levels—with performance-related bonuses and long-term incentives such as equity or carried interest for fund-side roles. Increasingly, candidates are also weighing career trajectory, placing value on roles that allow them to shape strategy and grow into broader leadership positions.
For businesses, the challenge lies less in direct competition with law firms than in differentiation. In-house roles offer a breadth of responsibility, strategic influence and a balance of lifestyle that private practice struggles to match. When combined with thoughtful and creative approaches to compensation, they continue to appeal strongly to exceptional talent, even against the backdrop of spiralling private practice pay.
