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Great advice from The Lawyer Whisperer

January 15, 2019

What is the compensation and reporting structure for a VP of Legal? Is it better to have a broader title like this or something more specific?

Julie Q. Brush

In earlier LW articles, I describ the various attorney profiles that define a private company General Counsel. However, one such profile fits more squarely into a role that is not as elevated as a true GC. That role is what I refer to as a “GC Light”. This attorney profile tends to be on the more junior side of the GC seniority spectrum (between 12 – 15 years), has a strong commercial/tech transactions background and often enters the role without prior GC experience. S/he has solid law firm and in house experience often with well-branded employers and served in a high-ranking position within his/her former legal department (often the #2 lawyer). This attorney is tasked with the blocking and tackling of the sales, commercial and other tech agreements, setting up the department infrastructure and handling most general corporate, IP, privacy and other matters that come down the pipe. This isn’t a core strategic position and exposure to the board is fleeting.

The title for this type of position does not include the words “General Counsel”, but rather is monikered as “Head of Legal” “Head of Legal Affairs”, “Director of Legal Affairs” or VP of Legal. The reporting structure is typically to the company’s CFO, but it can also report to other executives like the CAO and COO. It does not report to the CEO, but there are some exceptions.

Compensation varies depending on the stage of the company, funding, geographic region and seniority of the candidate. Base compensation is between $210k – $240k, bonus is 20%-30%. There is a stock (options) grant, but it doesn’t come close to the grant of a prototypical GC with a CEO reporting structure. The exact stock numbers are not uniform across companies and depend on their internal compensation metrics. But general ranges are in the .03 -.1% or a $250k-$850k valuation as the initial grant (give or take) with a one year cliff and (typically) a four year vesting schedule. Of course there are outliers, but these numbers are considered “market” in today’s in house legal market.

As for the title semantics, is it better to have a title like VP of Legal or something more detailed like VP Legal, Commercial and Operations? With these two examples, you’re better off opting for the VP of Legal and keeping the title broad. This title suggests that you lead the legal department and handle all legal matters that involve the organization. From a marketability perspective, this is more desirable as you prepare for the next rung on the leadership ladder. In contrast, the VP Legal, Commercial and Operations title projects a narrower focus by emphasizing commercial and operations – even if your role carries more responsibility. In addition, the specificity creates some uncertainty as to whether you lead the department (is there a VP Legal, Corporate too? Do you both report to an SVP GC? Who runs the show?). So stick with VP of Legal if you have the option to choose.

The VP of Legal is a critical executive who often carries the weight of a young company on his/her legal shoulders. But despite the role’s importance, its executive stature is lower than that of a classical GC…that is often reflected in title, reporting structure and compensation. The information and data above is what is most common for such attorneys in today’s market. So if you are contemplating this type of opportunity, leverage this information as a benchmark as you assess its appeal and whether it is the right role for you.

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