ALB's latest salary analysis has revealed that on average in-house salaries are now on a par with those of private-practice lawyers - and in some cases in-house practitioners are earning more.

The ALB Market Average figures - which take into account salary surveys from several major legal recruiters - show that for each level of experience up to six years PQE, in-house salaries across Sydney, Melbourne and New Zealand are in almost every case higher for in-house roles than private-practice roles (the only exceptions are at the one-, two-, four- and five-year levels in Melbourne). At the one-year PQE level in New Zealand, for example, in-housers are on average over 14% better off.

Whilst until recently these results may have been unexpected, David Talalla, director of David Talalla & Associates, says that these days they are not as shocking.

"In this climate, I don't think it is unusual and given the global financial crisis where many legal positions were made redundant and there was a freeze on recruitment by many law firms, it is not surprising that in-house lawyers in Sydney are slightly better paid than their colleagues in private practice. There has also been a general freeze on salaries by most firms for the past 18 months whereas in house lawyers have not experienced such freezes to the same extent," he said.

"Also there has been a pattern of more and more top-tier lawyers making the move to in-house. These lawyers have established a reputation for themselves, and companies and organisations have been willing to accommodate their remuneration requirements - if not through base salary then through other incentives such as bonuses and/or share options."

Peter Turner, CEO of Australian Corporate Lawyers Association, agrees and says that the closing of the gap could very well be a result of salary freezes imposed by private-practice firms over the past year and "may also reflect increasing numbers of corporations employing in-house lawyers and having to present more tempting offers to encourage solicitors to leave private practice."

In New Zealand, the situation is similar. The fact that there is no longer a disparity between in-house and private-practice salaries is, according to Mark Simpson, senior consultant at Hughes-Castell New Zealand, due to the majority of in-house lawyers working for large corporates with hefty in-house teams and the buying power to lure lawyers out of the top tiers of private-practice.

"These large corporates look to attract most of their lawyers from top-tier law firms and need to pay them at that level, often bringing them on board with the promise that they pay at the same level as top-tier firms at each year of post-qualification experience'," he said. 

Lynda Goston, senior consultant of H2R consultant agrees, but adds that the difficulty of returning to private practice once a lawyer has made the leap to in-house might also be a factor.

"In-house lawyers in NZ are generally paid slightly higher than private-practice lawyers because it is generally accepted that they are giving up a career path to partnership with a firm. However, this "rule" only usually applies to up to around 7 or 8 years PQE - after that the pendulum tends to swing the other way, and top-tier senior associates and junior partners are likely to earn more than in-house lawyers."

ALB Salary survey -- In-house vs Private-Practice

 Source: The ALB Market Average is an overall average calculated by ALB, derIved froma a combination of 2009 legal salary surveys from several major legal recruiters