Compensation and Market Trends

Mid-Year Report 2016Legal

Welcome to Barclay Simpson’s 2016 Legal Compensation and Market Trends ReportBarclay Simpson has been producing corporate governance market reports since 1990. We use our Mid-Year Report to update our Annual Report and as an opportunity to focus primarily on compensation. This report seeks to provide insight and guidance into compensation within in-house legal. This is supported by a comprehensive survey of lawyers registered with Barclay Simpson in June 2016. Clearly the respondents are not entirely representative as they are lawyers who are registered with a recruitment consultancy and who have taken time to complete the survey. There are no doubt many lawyers who go through their entire career without doing either. Nonetheless, the results make interesting reading and comparisons with previous years provide useful insights into shifts within in-house legal. Comparable reports exist for all other areas of corporate governance. They can be accessed in section 6 of this report (“About Barclay Simpson”) or at www.barclaysimpson.com.

We place great value on the professional reaction to our reports and would appreciate your comments and any requests for further clarification or information.

BARCLAY SIMPSONCOMPENSATION AND MARKET TRENDS REPORT

2016LEGAL

CONTENTS

OfficesLondonNew YorkDubaiHong KongSingapore

DisciplinesInternal AuditRiskComplianceSecurityLegalTreasury

1 ExECuTIvE SuMMARY p 12 MARKET ANALYSIS p 23 MARKET COMMENTARY p 34 SALARY GuIDE AND COMPENSATION SuRvEY p 54i KEY CONCLuSIONS p 6 4ii OvERvIEW p 74iii GENERAL RESuLTS p 114iv SALARY GuIDE p 20

5 ABOuT BARCLAY SIMPSON p 23

ExECuTIvE SuMMARY1

1

Living with Brexit uncertainty

Our employers survey published at the start of 2016 suggested a buoyant recruitment market for in-house lawyers. 74% of departments reported they had recruited or attempted to recruit in the last six months of 2015 and only 9% reported they were unlikely to recruit in 2016. However, according to our own metrics the number of vacancies being generated by in-house legal had started to fall. This slowdown continued.

There are two explanations for this. Firstly, within the banking sector, which remains a highly significant employer of in-house lawyers, there was a general slowdown of hiring as well as some job losses in investment banking, as many banks have looked to withdraw from uneconomic business lines and cut their costs. The second explanation is the uncertainty leading up to the Eu referendum, which affected both the wider financial services recruitment market and also commerce. Like many others in the recruitment industry we were anticipating that the demand suppressed by the uncertainty of Brexit would result in an uptick in demand as the vote was settled in favour of the status quo. Clearly this did not come to pass. For both clients potentially looking to recruit and candidates looking to change job, the result increases the appeal of doing nothing.

What can we say?In theory, there is no reason why the UK’s financial services industry and wider economy should not continue to be successful outside of the Eu. The uK has many strengths, including a sophisticated

and influential legal and regulatory environment, so If you work as an in-house lawyer what can we say to you? Firstly, uncertainty is no friend of the recruitment market and we are now living in more uncertain times. However, ultimately companies will need to recruit and lawyers will need to change jobs. It will take time but the recruitment market will learn to live with the uncertainty caused by Brexit. Secondly, it would take a heroic level of optimism to assume the financial services market will continue to grow and add jobs in the immediate future. If the industry shrinks it will be less able to support the current numbers of lawyers it employs. Commerce on the other hand is less likely to be affected. Thirdly, the uncertainty is being caused by the anticipation of change. Change or its anticipation is potentially a positive as it requires lawyers to consider its implications and, when necessary, implement the response.

The consequences of Brexit will no doubt have become clearer by the time we produce our Annual Market Report at the start of 2017. In the meantime, as usual, this report focuses on compensation and the results of our annual survey. Our survey was conducted before the Brexit vote and it is likely that some of the sentiments expressed in it may have subsequently changed. The compensation data will have not.

Survey data mixedThe results of our survey were mixed. Whilst there was an increase in the percentage of lawyers not working, those surveyed report it being no more difficult to find a new job than in 2015. It came as no surprise that the percentage of lawyers who reported they had changed job had fallen. When asked why they had moved, job security was not a significant factor. Salary increases for those both staying

and changing jobs had fallen. Overall the results from our survey confirms that in-house lawyers overwhelmingly value three things. Firstly, the salary and wider remuneration they are paid. Secondly, their career development. Thirdly, their work life balance.

A confident profession?When asked the question, 64% of in-house lawyers thought the value of their skills was increasing and only 7% stated a decrease, although on balance a marginally higher percentage of lawyers felt less secure than they did a year ago. The decision to leave the EU will bring two things: uncertainty and change. Whilst uncertainty is never good for recruitment markets, change for many lawyers will ultimately bring opportunities.

ultimately companies will need to recruit and lawyers will need to change jobs. It will take time but the recruitment market will learn to live with the uncertainty caused by Brexit.

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MARKET ANALYSIS2

2

Vacancies

Decline in the number of vacancies continues The rate at which vacancies were being generated had slowed by the end of 2015. Given that the great majority of vacancies result from lawyers changing jobs, the slowdown was confirmed by our survey. 28% of lawyers reported to have changed job in the last 12 months versus 31% in 2015, a modest rather than significant slowdown. In Q1 this slowdown was then exacerbated by the prospect of the Brexit vote and the ongoing restructuring of many Tier 1 investment banks.

In spite of the slowdown, there are a number of areas generating demand. Within financial services this includes demand for corporate lawyers and those with specialist funds, trade and asset finance experience. Also regulatory lawyers and those with experience of derivatives/structured products, data privacy and general commercial lawyers. There are also pockets of demand for employment lawyers, litigators and energy specialists. Within commerce a particularly notable area of demand is privacy and more generally, the technology sector has shown an appetite for lawyers.

Encouragingly, following the Brexit vote there has been little evidence of companies changing their immediate recruitment plans, and if anything, we have seen a small increase in the number of vacancies. At least the result of the referendum is now known.

Rate of placements

Market becomes more cautious? To provide a better insight into the dynamics of the legal recruitment market, this graph plots the rate at which placements have been made across the last four years. The graph demonstrates the rate at which vacancies are being filled.

At the start of 2016 we noted that the rate of placements had slowed. This was the result of a shortage of lawyers with the skills and experience required and also an element of caution had crept into the recruitment market. We opined as to whether this was a harbinger of a more general slowdown in the recruitment market. We will perhaps never know because after a short pick up in March the uncertainty of the Eu referendum slowed the legal recruitment market as it did others.

Whilst there is now an element of caution from both candidates and clients, as noted above, in the immediate aftermath of Brexit there has been a modest increase in the vacancy levels. This is surely positive, as all recruitment markets run on confidence. The number of vacancies is vital to this confidence. If, for example, lawyers believe there are a number of opportunities available, they will have greater confidence to enter the recruitment market and, more importantly, to accept realistic job offers when they are made.

- Placement rate

- New vacancies- Outstanding vacancies

3

MARKET COMMENTARY3

Recruitment remains necessary The legal recruitment market is a more uncertain place than it was a year ago. However, we anticipate that the outcome of the Eu referendum is something that the in-house legal recruitment market will adjust to and come to terms with. The key will be the avoidance of any serious economic set back and, within the financial services industry, access to the single market and the passporting of services without a fee.

General observations As revealed in our survey, the salary increases achieved by those lawyers who have changed jobs have fallen. In-house legal departments are currently sticking to their salary budgets and declining to negotiate offers upwards. Candidate salary expectations need to be tightly managed throughout recruitment processes, given there is little opportunity to negotiate offers above advertised salary bands. Occasional exceptions to this are critical senior level hires or regulatory positions.

Significant increases in private practice salaries are having an inevitable impact on the salary expectations of practice lawyers looking to make their first move in-house. Many accept the trade-off between their salary expectations and their career development and work life balance. However, these increases have left some with excessive salary expectations for the in-house sector even though they may only be looking to maintain their current remuneration. As such, their job searches are likely to be prolonged. Budget controls for in-house support functions are stricter than for fee-earning private practice positions and

the potential drop for those with 5 years PQE will in some instances, make a move in-house unbridgeable.

Given that companies are less likely to negotiate on salary what about the background and experience of potential recruits? Companies remain highly selective. Candidates who can demonstrate solid progress within a limited number of employers are of greater interest than those that have used a buoyant recruitment market to make multiple moves to maximise their immediate earnings. Whilst some companies are very clear in their requirements and are seemingly prepared to wait indefinitely, they are usually seeking senior lawyers and often have the support of law firm secondees in the interim. Companies are more likely to be flexible in their requirements for junior, priority recruits.

Opportunities for in-house lawyers are opening up in related areas of corporate governance: it is now usual for a lawyer to transfer into compliance or even risk. More recently, we are seeing opportunities opening up for lawyers in data privacy too. As a specialism this is relatively new. Whilst practical experience is key as it grows, the area is drawing recruits from both legal and information security backgrounds.

A longer term development within the in-house legal recruitment market is the number of lawyers who are not ‘actively’ looking or responding to job postings but who would move for the ‘right’ role. From a recruitment perspective, knowledge of this type of candidate is increasingly vital. Access to this pool of high quality candidates is possible by specialist recruiters who know what the candidate wants. This is also relevant given a structural change within the legal recruitment market. Many of

the larger banks and financial institutions employ in-house recruitment teams, who use Linked-In and other social media extensively. This results in many lawyers being bombarded with vacancies and direct calls, the majority of which are irrelevant or of no interest. Specialist recruiters embedded in their respective markets are better able to access and build long term, personal relationships based on trust and can assist in identifying truly appropriate opportunities.

“Companies remain highly selective. Candidates who can demonstrate solid progress within a limited number of employers are of greater interest than those that have used a buoyant recruitment market to make multiple moves to maximise their immediate earnings.

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Sector observations Recruitment activity in banking slowed significantly in the first half of 2016 with recruitment processes often proceeding more cautiously or on occasion put on hold. There were redundancies in some bulge bracket investment banks and others employed recruitment freezes to help cut costs. Encouragingly post Brexit activity in the sector has rebounded with an increase in vacancies, and recruitment processes that had otherwise dragged being pursued with a sense of purpose. Currently it is difficult to forecast beyond the immediate future although a likely fall in transactional activity later this year will have an inevitable effect on recruitment.

Asset management, like banking, was subdued in the first half of 2016 although it did not suffer the formal recruitment freezes employed by some of the investment banks. Many companies in the sector simply took a cautious approach as both uK centric and global issues clouded the economic outlook. There were few new positions with replacement roles being the norm. General Counsels are suggesting their teams are unlikely to grow in the near-term. Those companies that have recruited have been seeking junior lawyers although there is a shortage of appropriately experienced candidates to meet the demand.

The cost of regulation within the insurance sector in the last 2 years has impacted the budgets and headcounts particularly for smaller insurance companies and those operating in the Lloyds market. Larger companies have relied more heavily on contractors. Post Brexit, in spite of Solvency II being largely resolved, the sector has continued to recruit with new regulation such as the Insurance Act requiring in-house legal expertise. Insurance is potentially less affected by Brexit given the global nature

of the industry and the unique nature of the Lloyds market. Notwithstanding increased regulation lawyers are currently sought by innovative smaller insurers in addition to larger companies as they look to deploy cutting edge technology and expand into new markets. Merger and acquisition activity within the sector has resulted in movement at all levels from 2 PQE up to GC level. There has also been some redundancies as legal teams have been integrated. Some lawyers have used these mergers as an opportunity to move to smaller entrepreneurial companies and often away from insurance.

In spite of Brexit the in-house commerce sector has remained buoyant with technology and telecoms companies providing a significant source of demand. Across all areas of commerce, privacy counsel are in high demand and many positions are taking time to fill. There is a generally positive outlook for the next 6-12 months within commerce with many companies confirming plans to recruit.

How are lawyers feeling?Our survey was conducted before Brexit, but in the full force of the uncertainty prior to the vote. Lawyers were confident that the value of their skills was increasing. It came as no surprise that the percentage of lawyers who reported to have changed job had fallen, although when asked ‘why they had moved, why they would move or what they would most like to change about their current role?’, job security was never provided as a material reason. However, the number of lawyers out of work has crept up to 3%, with 55% of those unemployed reporting that it was difficult to find another job, a similar percentage to 2015. 34% of lawyers reported to feel more secure than a year ago; 35% less secure.

Staff retentionIn this year’s survey we also gave lawyers the opportunity to share what they might like to say to their employer. There was not one common message. As might be expected, we received a significant number of comments expressing dissatisfaction with their compensation, ranging from base salaries to bonuses and other benefits. This was already evident from our survey where 49% of lawyers expressed dissatisfaction with their remuneration, up from 42% in 2015.

Most managers can do little about the remuneration they are able to offer their staff. However, other comments, and there were not many that were complimentary about their employer, included a lack of recognition, career development, work life balance and communication. Many of these would appear to be fixable with enlightened management. If staff retention is a measure of a legal department’s success, then promoting open lines of communication where employees can express their concerns, would seem a potentially worthwhile initiative.

49% of lawyers expressed dissatisfaction with their remuneration, up from 42% in 2015.

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4

This Mid-Year Report includes a significantly expanded section on salaries and compensation, designed to give a much fuller picture of overall remuneration packages.

Most lawyers are keen to know their market worth. This is not always easy to address. Two otherwise similar lawyers may enter the recruitment market and accept materially different salaries. We provide this caveat because we are aware that the legal recruitment market is sufficiently diverse that it defies simple categorisation. However, in-house lawyers and their employers want guidance and this is what we attempt to provide.

As recruitment consultants we are involved in the negotiations that take place between employers and prospective employees. We are aware that whilst salary is usually the most important consideration, a number of other factors make up total remuneration. In addition to the data we gather from the placements we make and the recruitment work we do, including contact with legal and human resources departments about salary and benefits, we have also conducted a Compensation Survey to provide specific detail on all different types of remuneration within in-house legal.

Lawyers registered with Barclay Simpson June 2016 The Survey was of lawyers registered with Barclay Simpson and was conducted in June 2016. It generated hundreds of responses.

We hope that you find the results interesting. This report provides the key highlights of the Survey. If you would like more detail about your specific sector or role, please call Adrian Simpson on 020 7936 2601 (as@barclaysimpson.com).

This section is broken down into 4 parts:

1. Key conclusions – Key conclusions from Legal Compensation Survey

2. Overview – Commentary on the major trends in salaries and other benefits paid to in-house lawyers

3. Compensation Survey – Results of Compensation Survey completed by lawyers

4. Salary Guide – Guide to salaries for specific legal roles and positions

Legal2016 SALARY GuIDE AND COMPENSATION SuRvEY

4

5

Recruitment activity healthy, but downp 28% of lawyers have changed job in the last 12 months,

down from 31% in 2015

p Career development remains the most important motivation for moving (55%), although salary has become more important (up from 11% to 15%)

Slowdown in salary increasesp Average salary increase for non-movers down

from 6.9% to 5.9%

p Average salary increase for job movers down from 15% to 13%

Other benefits add almost 40% p At 84%, bonuses were almost universally paid and at 25% of

base salary, highly significant in value

p Additional pension benefits were received by 79% and overall pension benefits were worth 9% of base salary

p As in other areas of corporate governance, the average value of other benefits has dropped but at £4,200 remains substantial

Significant drop in satisfaction with remunerationp Drop in the level of satisfaction with current level of

remuneration from 58% in 2015 to 51%

value of skills increasingp 64% of lawyers feel that their skills have become

more valuable, with only 9% feeling they have become less valuable

Slight decrease in job securityp 35% of lawyers are feeling less secure than a year ago

p Proportion of lawyers not working up from 1% in 2015 to 3%

p Out-of-work lawyers are not reporting it any more difficult to secure another position than in 2015

Flexible working increasingly importantp Flexible working up from 55% in 2015 to 63%

p Strong desire for even more flexible working (73%)

Proportion of women continues to risep The percentage of women working in in-house legal is the

highest in corporate governance and has increased from 40% in 2015 to 44% in 2016

The results of the Barclay Simpson 2016 Legal Compensation Survey reveal lawyers becoming marginally less satisfied with their compensation. However, the attitudes and rewards of lawyers between different sectors, regions, genders and other classifications are many and various. We hope you find the results interesting.

4iKey Conclusions

6

A notable trend across all sectors is that lawyers are more likely to move for a better work / life balance as their salaries rise. This is a similar pattern to our other surveys.

Whilst salary is not the primary motive for lawyers seeking another job, they will almost invariably use the opportunity to better their salary. Clearly lawyers have some success.

Our survey indicated that 66% of lawyers who had changed employer in the last 12 months were content with their salary, against only 42% who had not changed employer.

Motivation for potentially entering the recruitment marketIn our survey last year we first asked what is the most likely reason lawyers would look for another job or attend an interview? This year we now have comparatives. It is interesting how little difference there is between 2015 and 2016. Job security is again less of a motivating factor and in common with our other surveys, salary is a far greater motivating factor for those who might consider moving than those who actually have. However, we suspect salary is a bigger motivation than lawyers are prepared to admit after they have moved. Career development remains key although at 51% it is more important for those working in commerce than in financial services at 37%.

Q - If you were to look for another job or go for an interview, what would be the most likely reason?

Motivation for entering the recruitment market This analysis looks at what has motivated lawyers to change employer in the last 12 months. In spite of 24% of lawyers reporting that they did not receive a salary increase in 2016, up from 23% in 2015, salary was the primary motivation for only 15% of lawyers who entered the recruitment market. 55% of lawyers reported that career development was the primary motive. However it appears to be more of a motivation for men with 60% of men citing it compared to only 50% of women. Women were more likely to be motivated by a better work / life balance.

Q - What was your primary motivation for looking for another job?

It was a little surprising that in spite of a rise in the number of lawyers reporting they are not working (a theme common across all our reports) only 4% of lawyers reported they had changed job because they felt insecure, which fell to only 1% of those working in commerce. Surprisingly managers appeared to be more likely to be motivated by insecurity than non- managers. 4% is a significant decline from the 11% of lawyers who reported they were motivated to move by insecurity in 2015. We would have assumed that the economic back drop was more benign in 2015, particularly given that 55% of lawyers who were not working reported they were finding it more difficult than they expected to secure another job. The percentage was unchanged on 2015.

4iiOverview

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Salary increases achieved by lawyers who stayed with their employerAccording to our survey, the average increase for lawyers who stayed with their existing employer, having jumped from 5% to 6.9% in 2015, has fallen back to 5.9% in 2016. Whilst the headline rate is perhaps unsurprising, averages can be misleading. Breaking out the averages demonstrates a wide range of outcomes. For example, some lawyers who stayed with their employer will have benefited from promotions or the salary increases achieved through buy-backs, when they might otherwise have resigned and looked to leave. Others, and there are many, received no increase at all.

Q - What best describes your salary increase in the last year?

What is interesting is that the trend for higher percentage salary increases in commerce has continued. It probably needs to given the often significantly higher level of salaries in financial services and the higher levels of dissatisfaction relative to financial services expressed by lawyers working in commerce.

However, it remains surprising how many lawyers and those working in other areas of corporate governance have not benefited from a salary increase. It is more common in financial services than commerce. It might not be entirely representative of the wider market given that if a lawyer has not received a salary increase they are probably more likely to be registered with a recruitment consultancy. A common refrain from our comments section is that some lawyers were confident they could earn more and understood they were underpaid, but their current job had other significant work / life benefits. Others, perhaps not so ready to voice their frustration, simply do not have marketable skills and experience. They have perhaps come to know their bargaining position is weak, as does their employer. How this might affect their overall motivation and effectiveness as an employee remains to be seen.

Salary increases achieved by changing employer The survey indicates that the average salary increase achieved by lawyers changing jobs is 13%, down from 15% last year. It is interesting to review the last five years of data. Although this does not capture a full economic cycle (2009 might have been interesting), it does capture the post Euro crisis economic set back in 2012. The range over the last five years has been no more than 3% and possibly varies less than we might expect. It does however demonstrate that 2014 was a hiatus of activity in the more recent in-house legal recruitment market.

The likely explanation for the low variation is that regardless of market conditions there are still those lawyers with highly marketable skills and experience who expect to be paid the same level of premium. For example, when economic conditions are poor, high calibre lawyers, and the ones most likely to get jobs, will expect a risk premium for trading what they consider to be a secure position for a potentially less safe one. In better economic conditions that premium is simply swapped for one that recognises their scarcity value. Either way, regardless of market conditions, valuable lawyers with marketable skills benefit from a significant premium when they change job.

Last year the difference between the average salary increase achieved by staying with an existing employer and moving was 6.9% for staying and 15% for moving. In 2016 the equivalent percentages are 5.9% and 13%. This may go some way to explaining why the percentage of lawyers reporting they are satisfied with their remuneration fell from 58% in 2015 to 51% in 2016. This is not entirely dissimilar to results from other areas of corporate governance. The legal recruitment market has slowed as demonstrated by Barclay Simpson’s own metrics together with the percentage of lawyers reporting they have changed job in the last year. There are a wide range of considerations that go into the decision to accept a position and whatever the resulting salary increase, whilst the most recent average is 13%, the average is not the typical increase.

June 2012

June 2013

June2014

June2015

June 2016

13% 14% 16% 15% 13%

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Q - Which best describes how your current salary compares to your salary in your previous role?

Analysing the average reveals a wide range of outcomes. In fact, only 24% of lawyers actually accepted a salary increase between 10% and 20% and few near the actual average of 13%.

What is notable this year against both 2014 and 2015 is the fall off in the percentage of lawyers achieving salary increases in excess of 30%. In those years approximately 20% of lawyers reported that they achieved salary increases in excess of 30%. This year it is down to 15% of lawyers. Notwithstanding the year on year average there are still lawyers benefiting from substantial increases. Whilst some of these increases are the result of lawyers relocating to London or from overseas (there is also movement the other way), companies are more willing and required to pay significant increases to those lawyers with the skills and experience that match their often strict requirements.

It might seem curious that in 2016 that 25% of lawyers (a percentage not significantly different from previous years) would move job for the same or less. An important factor, but by no means the full explanation is the movement of lawyers from private practice into in-house roles. Although it is becoming less common for practice lawyers moving in-house to take a salary cut, it is still the price most pay in order to benefit from what they perceive to be the enhanced career development that it offers, as well as the opportunity to have more control over their work / life balance. For others it is the result of relocation, for example a move away from London or perhaps the opportunity to work in a new sector. A better work / life balance is sought not only by lawyers in practice but also many employed in-house. In our survey 26% gave it as the principal reason they have changed job in the last year. Equally whilst base salary is the most compelling element of any offer, there are other benefits such as pensions, bonuses and holiday entitlement to be considered.

Salary v Remuneration Whilst base salaries always catch the headlines, offers of employment invariably include other benefits. On average, these additional benefits make up over 30% of total remuneration. We will use this opportunity to provide an overview of the other benefits that lawyers might expect to receive.

BonusesOverall the average bonus increased from 24% in 2015 to 25% in 2016. However, there was a modest fall in the percentage of lawyers reporting their employer paid a bonus, down from 87% in 2015 to 84% in 2016. Of those who received a bonus, 33% reported receiving a higher bonus against 49% who reported a reduction. Bonuses awarded to lawyers working in financial services are consistently higher than for those in commerce. In 2016 it was 29% of salary for those who worked in financial services and 20% for lawyers working in commerce. Other even more substantial differences exist between managers and non-managers, and between lawyers working in London and the regions.

Bonuses, whilst potentially a good way of retaining and motivating staff, are rarely an efficient way of attracting them. Bonuses are often non-contractual and may be paid on the basis of corporate or personal performance or a combination of the two. There can also be a qualifying period.

An issue with bonuses is that whilst a lawyer entering the recruitment market who has benefited from a bonus may add it to their base salary, they are more inclined to discount bonuses when negotiating their expected salary. This goes some way to explaining what can be relatively high increases in the base salaries achieved by lawyers moving between employers.

Pensions Given work-place pensions have now become mandatory, there is little point asking lawyers if they are entitled to an employer pension contribution. In 2016 we have therefore asked if their employer paid above the statutory minimum. 79% reported they did with an average employer contribution of 9%, which was unchanged from 2015.

Larger employers are generally more willing to pay higher contributions and managers also stand to benefit from higher contributions. 46% of lawyers benefit from an employer contribution of between 5-10% of which 24% fall into the most common range of between 5-7.5%.

For new recruits, final salary pensions no longer exist in the private sector. Those who still benefit from these appreciate how valuable they are and the cost of giving them up to join a new employer can be prohibitively expensive. Pension schemes in the private sector are invariably money purchase where the employer commits to making a contribution based on a percentage of salary.

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Whilst there can be a short qualifying period before contributions commence, work-place pension legislation requires all companies to enrol an employee in a pension scheme within three months of employment commencing. For those who elect to stay enrolled, minimum employer and employee pension contributions based on an employee’s salary are now mandatory. Most companies pay above these minimums based on a fixed percentage of an employee’s base salary. The employee may or may not be required then to match it. Frequently employers will be prepared to match additional contributions made by the employee up to a fixed percentage. The percentage may increase with the age of the employee, their length of service and management status.

Other benefits86% of lawyers reported they received other benefits in 2016, with the average value of those benefits falling from £4,400 in 2015 to £4,200 in 2016. Such a fall appears to have been mirrored across all the areas of corporate governance that Barclay Simpson addresses. Benefits are higher in commerce than in financial services because of the value of car allowances where this benefit is more common. Equally they are notably higher for managers than non-managers.

However, even in commerce, cars or car allowances have become a less common benefit although they can still be expected where a role requires significant travel. In terms of overall remuneration, a car allowance is frequently offered in lieu of a car and is often considered as non-pensionable salary when evaluating overall remuneration. A more common benefit for those working in London is a location allowance. This is a supplement for those working in London to cover the increased cost of either living in or commuting to London. The most valuable other benefit is Critical Illness Cover which is expensive to provide and is usually restricted to senior roles. However, Private Health Insurance is common and is often extended to all immediate family members.

Life Assurance, usually linked to a pension scheme is usual, as is payment of at least one professional subscription. Other benefits may include season ticket loans in London, gym membership, subsidised dental care, personal and accident insurance and staff discounts. These are generally low value benefits.

Holiday entitlement The average number of days’ holiday survey-wide was 26, down from 27 in 2015.

43% of lawyers surveyed receive 25 days’ holiday, with 60% reporting 24 to 27 days’ holiday. Lawyers working in financial services on average benefit from an extra day of holiday against those working in commerce. Holiday entitlement, regardless of sector, is more likely to be enhanced by the number of years worked than seniority. As a strategy, it represents a good way of rewarding loyalty and retaining staff, but a poor way of attracting new employees.

An increasingly popular benefit is to provide employees with the opportunity to buy extra holidays. This is usually limited to an additional 5 days and would be purchased through salary sacrifice.

Flexible working Flexible working is popular and is something that lawyers value. The percentage benefiting from flexible working, having fallen last year, rose in 2016 from 55% of lawyers to 63%. 26% of lawyers who changed job in the last year gave it as their primary reason for moving, 73% reported they would like to work more flexibly and a further 14% indicated that it was what they would most like to change about their job. Another 73% of lawyers reported that having changed job they benefited from flexible working unlike the 60% of those who had not change job. This implies that flexible working was either offered by their prospective employer or they negotiated it as part of their agreement to accept the position.

Longer term we have little doubt that flexible working will become more common within legal. It is an effective means of retaining staff and few employees who have benefited wish to give it up.

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The composition of the sample ranged across all areas of legal. Here are some key statistics:

Sample

p Proportion of women continuing to rise and is the highest percentage in corporate governance

p 65% of men work in financial services, 35% commerce, whereas 48% of women work in financial services, 52% in commerce

p Women have worked in legal for an average of 10.2 years versus 12 years for men

p Increase in respondents with management responsibility

p 61% of men describe themselves as managers versus 46% of women

4iiiGeneral Results

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Q - Are you currently working?

Rise in proportion not working

p Percentage of lawyers not working has risen, but remains comparatively low

p 34% have been looking for over 3 months, an increase on 2015

p 55% of out of work lawyers finding it more difficult to find a new job than they anticipated, a similar percentage to 2015

Q - Have you changed employer in the last 12 months?

Recruitment activity

Fewer lawyers report changing job

p Lawyers are less likely to have changed job in the last 12 months

p 33% of women have changed job, versus 24% of men

p 35% working in financial services have changed job, versus 26% in commerce

p 29% in London have moved employer, versus 22% in the regions

p No material difference between managers and non-managers

Q - How qualified are you?

General findingsSignificant increase in average level of experience

p The average level of experience of in-house lawyers has risen to 11.3 years in 2016 from 10.6 years in 2015

p 57% of in-house lawyers have over 10 years experience

p Financial services in-house lawyers have an average of 12.4 years post qualified experience versus 10.9 years for commerce

p Managers 12.6 years versus non-managers 9.6 years

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p Salary becomes relatively more important for lawyers who would consider moving, particularly for non-managers

p Career development is more important for lawyers working in commerce than in financial services

Q - If you were to look for another job or go for an interview what would be the most likely reason?

Sub-group Career Development

Salary Work / Life Balance

Job Security

Men 50% 36% 12% 2%Women 44% 37% 17% 2%Managers 51% 34% 12% 3%Non-managers 42% 43% 14% 1%Financial Services 37% 43% 16% 4% Commercial 51% 40% 9% 0% Overall average 47% 37% 14% 2%

Q - What was your primary motivation in looking for another job?

p Career development remains the most important motivation, although salary has become more important

p Significant fall in job security as a motivating factor

p Men substantially motivated by career development; work / life balance of greater concern to women

Career development still most important

Sub-group Career Development

Salary Work / Life Balance

Job Security

Men 60% 16% 20% 4%Women 50% 15% 30% 5%Managers 56% 7% 33% 4%Non-managers 58% 25% 16% 1%Financial Services 57% 11% 28% 4% Commercial 53% 20% 26% 1% Overall average 55% 15% 26% 4%

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Q - Which option best describes your salary increase in the last year?

Average salary increase for non-movers down to 5.9%

p Average salary increase down from 6.9% in 2015 to 5.9% in 2016

Sub-group Salary Increase 2016

Men 6.1%Women 5.7%Managers 5.8%Non-managers 6.0%London 6.1%Rest of UK 5.6%Financial Services 5.5%Commercial 6.2%Overall average 5.9%

Q - Which band best describes your base salary?

Salaries

Average base salary in survey £108,900

Sub-group Average Salary

Men £120,500Women £95.500Managers £121,100Non-managers £93,300London £113,600Rest of UK £83,600Financial Services £126,500 Commercial £86,300Overall average £108,900

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Q - Overall do you believe you are adequately compensated?

Significant decrease in satisfaction with remuneration

p Significant decrease in satisfaction with remuneration – down from 58% in 2015 to 51% in 2016

p The more lawyers earn, the more satisfied with their salary they become

Sub-group Satisfied with renumeration

2016

Men 59%Women 41%Managers 51%Non-managers 50%Changed employer (12 months) 66%Not changed employer 42%Financial Services 57%Commercial 43%Overall average 51%

Q - Which best describes how your current salary compares to your salary in your previous role?

Average salary increase for job movers drops to 13%

p Average increase achieved by lawyers changing job fell from 15% in 2015 to 13% in 2016

Sub-group Salary Increase 2016

Men 14%Women 12%Managers 11%Non-managers 15%London 14%Rest of UK 11%Financial Services 15%Commercial 9%Overall average 13%

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Sub-group Paid Bonus 2016

Managers 88%Non-managers 80%Financial Services 87%Commercial 81%Overall average 84%

p Slight drop in the percentage of companies paying bonuses since 2015

Q - Does your employer pay a bonus?

BonusesBonuses still the norm

Q - Which of these as a percentage of your salary best describes your last bonus?

Level of bonuses remains high at 25%

p Average bonus up from 24% in 2015 to 25% in 2016p Substantial differences between bonus levels in

London and the regions

Sub-group % Bonus 2016

Managers 32%Non-managers 17%London 28%Rest of UK 12%Financial Services 29%Commercial 20%Overall average 25%

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Q - What contribution to your pension as a percentage of your salary does your employer make?

Average contribution remains at 9%

p Average pension contribution in 2016 was 9%, identical to 2015

p Typical pension contribution in 2016 was 10-15%, received by 27%

Q - What is the approximate monetary value of any other benefits such as health, travel or car allowances?

Other benefits

Slight reduction in average value of other benefits

Sub-group value of Benefits

Managers £4,900Non-managers £3,300Financial Services £4,000Commercial £4,500Overall average £4,200

p Average value of other benefits £4,200 in 2016, versus £4,400 in 2015

p 86% of lawyers receive some form of other benefits, down slightly from 88% in 2015

Q - Does your employer provide you with any pension benefits above the statutory minimum?

Pensions

Additional pension benefits common

p Managers more likely to receive additional pension benefits

p Lawyers in commerce more likely to receive additional pension benefits than those in financial services

Sub-group %

Managers 86%Non-managers 71%Financial Services 74%Commercial 86%Overall average 79%

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Q - Does your employer provide you with the opportunity to work flexibly to any significant level?

Significant increase in flexible working

p Women and managers more likely to benefit from flexible working

p Flexible working more common in financial services than commerce

p Changing job appears to increase the likelihood of flexible working

Sub-group Flexible Working

Men 60%Women 66%Managers 70%Non-managers 55%London 65%Rest of UK 53%Changed employer (12 months) 73%Not changed employer 60%Financial Services 68%Commercial 58%Overall average 63%

Q - Would you like the opportunity to work more flexibly?

Desire for even more flexible working

p Desire stronger from women and those who have changed job in the last 12 months

Sub-group Desire to Work Flexibly

Men 65%Women 78%Managers 72%Non-managers 74%London 75%Rest of UK 64%Changed employer (12 months) 79%Not changed employer 70%Overall average 73%

Q - What is your holiday entitlement?

Quality of life

Slight drop in holiday entitlement

p Average holiday entitlement has fallen from 27 days in 2015 to 26 days in 2016

p The most common holiday entitlement is 25 days, enjoyed by 43% of lawyers

p 60% of lawyers benefit from between 24 and 27 days

p Only 8% of lawyers have less than 24 days, but only 6% more than 30 days

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p Changing job increases feeling of security p Managers feel less secure than non-managers

Q - Do you feel more or less secure than a year ago?

How people are feeling

Significant minority feel less secure

Sub-group More Same Less

Managers 31% 35% 34%Non-managers 38% 34% 28%Changed employer (12 months) 53% 24% 23%Not changed employer 26% 39% 35%Financial Services 34% 27% 39%Commercial 35% 39% 26%Overall average 34% 31% 35%

Q - Do you feel your skills have become more or less valuable?

Strong consensus that value of skills is increasing

p Managers far more likely to feel their skills have become more valuable

p Lawyers who have changed job are also more likely to believe their skills have become more valuable

Sub-group More Same Less

Managers 77% 17% 6%Non-managers 48% 40% 12%Changed employer (12 months) 74% 17% 9%Not changed employer 60% 31% 9%Financial Services 64% 30% 6%Commercial 63% 25% 12%Overall average 64% 27% 9%

Q - What would you most like to change about your job?

Salary the most important issue

p Although work / life balance is important, salary and career development are the key issuesp Career development highest for those who have not changed job and for non-managersp Salary most important for men and managers

Sub-group Salary Work / Life Balance

Job Content Career Development

Job Security My Manager Recognition

Men 41% 14% 6% 27% 3% 5% 4%Women 33% 14% 6% 35% 2% 4% 6%Managers 42% 17% 3% 27% 3% 3% 5%Non-managers 32% 10% 10% 36% 2% 6% 4%Changed employer (12 months) 35% 26% 9% 14% 6% 5% 5%Not changed employer 39% 9% 5% 37% 1% 5% 4%Financial Services 38% 17% 5% 28% 3% 6% 3%Commercial 37% 10% 8% 35% 2% 2% 6%Overall 37% 14% 6% 31% 3% 5% 4%

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Barclay Simpson analyses the salary data that accumulates from the placements we make in the uK. This provides a guide to salaries for in-house lawyers.

The salary ranges quoted are for good rather than exceptional individuals and take no account of other benefits in addition to salary, such as bonuses, profit sharing arrangements and pension benefits.

4ivSalary Guide

INVESTMENT BANKING SALARy RANGE

Newly Qualified (0-1 yrs exp) £60 – 75,000

Junior Lawyer (2-3 yrs exp) £75 – 90,000

Lawyer (4-5 yrs exp) £85 – 105,000

Lawyer (6-7 yrs exp) £100 – 125,000

Senior Lawyer (8+ yrs exp) £110 – 150,000

Head of Legal £130 – 200,000

General Counsel £200,000+

ASSET MANAGEMENT / WEALTH MANAGEMENT

Newly Qualified (0-1 yrs exp) £60 – 70,000

Junior Lawyer (2-3 yrs exp) £70 – 85,000

Lawyer (4-5 yrs exp) £80 – 95,000

Lawyer (6-7 yrs exp) £85 – 110,000

Senior Lawyer (8+ yrs exp) £95 – 130,000

Head of Legal £110 – 160,000

General Counsel £130,000+

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RETAIL BANKING

Newly Qualified (0-1 yrs exp) £55 – 70,000

Junior Lawyer (2-3 yrs exp) £65 – 80,000

Lawyer (4-5 yrs exp) £75 – 90,000

Lawyer (6-7 yrs exp) £85 – 100,000

Senior Lawyer (8+ yrs exp) £90 – 115,000

Head of Legal £100 – 130,000

General Counsel £140,000+

INSURANCE

Newly Qualified (0-1 yrs exp) £50 – 65,000

Junior Lawyer (2-3 yrs exp) £60 – 75,000

Lawyer (4-5 yrs exp) £70 – 90,000

Lawyer (6-7 yrs exp) £80 – 95,000

Senior Lawyer (8+ yrs exp) £90 – 120,000

Head of Legal £95 – 140,000

General Counsel £130,000+

COMMERCE - FTSE 100 (OR EQUIVALENT MULTINATIONAL COMPANy)

Newly Qualified (0-1 yrs exp) £55 – 70,000

Junior Lawyer (2-3 yrs exp) £65 – 80,000

Lawyer (4-5 yrs exp) £70 – 85,000

Lawyer (6-7 yrs exp) £75 – 100,000

Senior Lawyer (8+ yrs exp) £85 – 120,000

Head of Legal £100 – 150,000

General Counsel £160,000+

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IN-HOUSE COMMERCE - FTSE 250

Newly Qualified (0-1 yrs exp) £50 – 60,000

Junior Lawyer (2-3 yrs exp) £55 – 68,000

Lawyer (4-5 yrs exp) £65 – 80,000

Lawyer (6-7 yrs exp) £70 – 95,000

Senior Lawyer (8+ yrs exp) £80 – 105,000

Head of Legal £95 – 150,000

General Counsel £150,000+

IN-HOUSE COMMERCE - SME

Newly Qualified (0-1 yrs exp) £45 – 55,000

Junior Lawyer (2-3 yrs exp) £50 – 70,000

Lawyer (4-5 yrs exp) £65 – 75,000

Lawyer (6-7 yrs exp) £70 – 90,000

Senior Lawyer (8+ yrs exp) £75 – 100,000

Head of Legal £90 – 135,000

General Counsel £135,000+

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ABOuT BARCLAY SIMPSON5Barclay SimpsonBridewell Gate, 9 Bridewell PlaceLondon EC4V 6AWTel: 44 (0)20 7936 2601Email: bs@barclaysimpson.com

If you would like to discuss any aspect of the reports please contact the following divisional heads:

Corporate Governance Adrian Simpson as@barclaysimpson.comInternal and IT Audit Tim Sandwell ts@barclaysimpson.comRisk Dean Spencer ds@barclaysimpson.comCompliance Tom Boulderstone tgb@barclaysimpson.comSecurity Mark Ampleford ma@barclaysimpson.comLegal Jane Fry jf@barclaysimpson.com

To discuss our international services please contact:Europe Tim Sandwell ts@barclaysimpson.comMiddle East Chris L’Amie cla@barclaysimpson.comAsia Pacific Russell Bunker rb@barclaysimpson.comNorth America Daniel Close dc@barclaysimpson.com

Barclay Simpson is an international corporate governance recruitment consultancy specialising in internal audit, risk, compliance, security, business continuity, legal and treasury appointments. Established in 1989, Barclay Simpson works with clients in all sectors throughout the UK, Europe, Middle East, North America and Asia-Pacific from our offices in London, New york, Dubai, Hong Kong and Singapore.

We add value by using our unique focus on corporate governance, our highly experienced specialist consultants and access to both the local and international pools of corporate governance talent. Our strength lies in our ability to understand client and candidate needs and then to use this insight to ensure our candidates are introduced to positions they want and our clients to the candidates they wish to recruit.

For more in-depth coverage, comprehensive reports and compensation guides exist for the Internal Audit, Risk, Compliance, Security and Legal recruitment markets. These can be accessed from the links below.

We also produce other specialist reports, each of which can be accessed for free on our website: www.barclaysimpson.com

www.barclaysimpson.com/mid2016markettrends/auditwww.barclaysimpson.com/mid2016markettrends/riskwww.barclaysimpson.com/mid2016markettrends/compliancewww.barclaysimpson.com/mid2016markettrends/securitywww.barclaysimpson.com/mid2016markettrends/legal

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