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When it comes to compensation raises for counsel, they can end up in “no man’s or no woman’s land,” said Jeff Lowe, senior managing partner and market president for Washington, D.C. at consulting firm CenterPeak.

He said their pay doesn’t really track with associates or nonequity partners, because some lawyers are seeking to remain in counsel positions, while others are trying to move up. Still, others may be brought in from the government or another firm, and their position is temporary, while other firms don’t even have counsel positions. In that context, it becomes difficult to evaluate or scale lawyers in the counsel spot.

“You have associates making almost $500,000, so in a sense, [counsel] get squeezed by firms, because the firms feel like, ‘What options do we have?’” Lowe said. He added that, “Generally speaking, they’re less likely to have business than someone who has a partner designation, so that makes their ability to move more challenging. They’re more senior so they can’t slot into the associate world at all. So, it has to be a firm looking for someone with their particular expertise, and it’s just gotten to be more challenging as the years have gone by.”

As Law.com reported last year, it’s becoming harder for some firms to justify counsel tiers, as firms launch or rapidly expand their nonequity tier of partners, and as associate pay increases. Now, senior associate pay and counsel pay can frequently overlap, recruiters have said.

“At firms that recently added a non-equity tier of partners, many existing counsel are wondering where they fit going forward,” said Scott Yaccarino, a New York-based recruiter and founder of Empire Search Partners.

But at those firms with a single tier of partnership, and most firms that have longstanding two-tier structures, “we've seen counsel compensation increase as well. There has never been a one-size-fits-all, market-wide compensation scale for counsel,” Yaccarino added.

A recent ALM Flash Survey found lawyers with an “of counsel” designation average just over $289,000 a year, while their median salary is right around the same number: $290,000 even. They also averaged about twice as much in annual bonuses as the average associate, according to the flash survey: about $60,600 versus $30,783. The survey collected responses from all sizes of firms, from the smallest (1-99 lawyers) to the largest (1,500+ lawyers), but cautioned that it was a small sample of counsel.

While the kinds of people in counsel spots “runs the gamut,” said Katherine Loanzon, a managing director at Kinney Recruiting, many are still paid generously.

“There are some counsel at elite firms that are being paid close to $1 million [a year], and I think it’s a comfortable position to be in, especially if their skills are very niche,” Loanzon said in an interview. “And I think it’s an individual choice if they’re comfortable staying counsel, and it’s the right career position for them.”

For firms that have created two-tiered partnerships, adding more counsel or slotting more lawyers into counsel spots “is really about a retention of talent,” Loanzon added.

Counsel Leverage

For Am Law 50 firms, the share of “other lawyers” (which includes counsel at firms) fell by 2.1% from 2022 to 2023, the most recent year full-time equivalent head count figures are available from ALM. For the Am Law 100, it was nearly flat, showing 0.2% growth, while Second Hundred firms grew their “other” lawyer ranks by 3.9% in 2023, according to ALM data.

So while some elite firms are finding less need for counsel ranks, many others outside the Am Law 50 are turning to them to grow, boosting their leverage.

Those lawyers have similarly helped firms grow billing rates and put up better profitability, especially if associate pay increases haven’t totally pushed up counsel compensation too.

Looking at long-term trends, the portion of “other” lawyers in Big Law who aren’t equity partners, non-equity partners or associates has increased over the last decade-and-a-half, from an average composition of 10% of firms to an average of 13%, according to a recent report.

Meanwhile, the portion of equity partners (-3.4%) and associates (-4.3%) has sunk. Those types of other lawyers, such as counsel, are part of the changing composition of firms that has helped them increase their billing rates.

“We’re definitely seeing that in play with law firms in the market, with firms favoring more senior folks,” said Bill Josten, strategic content manager for Thomson Reuters, which published the figures on changes in law firm composition. He said while it’s not the exclusive cause of higher rates (firms are just generally being more aggressive, too), it is “an appreciable factor” in the rate calculus. “If you have more work being done by higher-rate timekeepers, that’s going to naturally increase that overall average figure.”