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Great advice from The Lawyer Whisperer

July 25, 2017
Question

What is the market compensation range and practice profile for a Director of IP?

answer
Julie Q. Brush

“Market” compensation for a Director of IP role depends on the following primary variables:

1. The seniority of the candidate

2. The size of the company

3. Size of the team this attorney will manage

4. Whether the company is public or private

5. Size of the company

6. The geographic location of the company and the role

Generally speaking, the seniority range for a Director of IP candidate is between 10-18 years (give or take a year or two). These candidates are patent lawyers typically with an early legal practice foundation in patent prosecution. As their careers progress, they develop broader in house IP experience like IP portfolio management, patent strategy, licensing, copyright/trademark and IP litigation management. Some have management experience, others don’t. The overwhelming majority possesses a technical undergraduate and/or masters degree in one of the following fields: electrical engineering, computer science, physics, mechanical engineering and materials science. If we’re talking about a life sciences company, the technical degree will be in the life sciences/med devices fields like biology, biochemistry, genetics, chemistry, organic chemistry, robotics and mechanical etc. Sometimes these candidates have held roles as patent agents and/or scientists before attending law school.

In a “large to super large” prototypical public company, the compensation range for a Director of IP is $235k – $285k on the base salary, 25%-40% bonus and a stock grant. The grant will be either a mix of options and RSUs or a pure RSU grant, however many companies have moved to the pure RSU grant. The grant range will vary and the vesting schedule will be the typical four-year vest with a one-year cliff. The grant won’t be eye popping, but could throw off a decent annual cash supplement if the company performs well.

For smaller public companies, the compensation range is $215k-$235k on the base salary and 20%-25% target bonus. The stock grant will likely be RSUs and the grant range will vary, but the valuation of the entire grant will typically fall between $150k – $300k.

Private companies who hire a Director of IP tend to offer a lower base compensation – as cash is often tight: $195k – $215k. The base salary range will vary depending on the stage of the company. Later stage companies will offer a higher base salary than earlier stage companies, but the stock grant will be lighter as well. A bonus may or may not be offered (if the company has not implemented a company-wide bonus program, no target bonus will be offered), but if it is, it will fall between 15%-20%. The bigger upside here will be on the stock (an option grant most of the time), which will vary from company to company, but I’ve seen valuations in the $250k – $750k range depending on the company’s stage. The vesting schedule will be the typical four-year vest with a one-year cliff, but some private companies have deviated from this norm and have offered a three-year vesting schedule. A rare few stretch the vesting to five years.

The compensation numbers above are a market pulse for the more expensive geographic regions like California, New York, Boston, parts of Asia and Europe. Regions with a lower cost of living will present numbers that can be 10%-20% lower than their more expensive counterparts.

Outliers from these market ranges do exist, but this is what “market compensation” looks like today for the Director of IP role for the profile describe above.

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