2011-2012 Business Support Salary and Benefits Benchmarking Survey: An analysis
No-one is going to suggest that the current business climate is easy, but if business services salaries for the past year are anything to go by, then law firms are holding steady despite the prevailing economic storm.
The ‘2011-2012 Business Support Salary and Benefits Benchmarking Survey’, which polled the views of 80 leading law firms and was conducted by specialist recruitment consultancy Totum, also revealed longer-term trends in the recognition and reward of business services professionals.
Together the findings reflect the increasingly critical and valued role such professionals play in helping to shape a changing profession.
Salaries on the up
Survey findings reveal that 85% of participating firms expect business services salaries to increase this year which is an 8% increase on the last two years and a positive message given the uncertain economic climate.
The fact that no respondent firms pointed to salaries going down this year increases this sense of optimism as well as confirming once and for all that the value provided by high calibre business services professionals to law firms is now recognised.
Firm foundations: The value of finance
In terms of salary, finance appears to be the most stable and lucrative of business services divisions.
Finance professionals can earn the highest salaries of all the business services teams. Finance Directors (FD) in London firms are earning on average £166,638. This compares to average London director salaries in other functions of £148,923 in HR, £148,246 in marketing and £125,547 in IT.
In addition, finance salaries have increased across nearly all levels since 2009. Finance director salaries in London have particularly leapt, and directors and senior managers outside of London have also enjoyed decent increases.
That finance salaries remain solid makes sense. Rigorous financial management has become ever-more critical, and never more so than in a fragile economy where every penny counts.
Many firms have also implemented new financial management systems in recent years, including alternative pricing structures and more complex performance related remuneration.
Quite simply, highly capable and strategic-minded finance professionals are in high demand. Competition for the best – which also keeps the salaries up – remains high.
Marketing proves its mettle
Marketing and business development (BD) has also enjoyed a strong performance this year despite – or perhaps because of – economic uncertainties. When work and clients become scarce, effective marketing comes to the fore.
Marketing and BD salaries for instance remain high – currently on a par with HR but rising. The past two years have seen salary rises across all levels of marketing seniority – and some of them have been particularly substantial.
Law firms once held a rather sceptical view of marketing – but the figures suggest a clear understanding among firms of the vital role marketing and BD professionals now play in new business generation and ongoing client relationship management.
Salaries among HR professionals also remain good, closely competing with marketing salaries if not coming out slightly higher this year
These high salaries make sense given the increasingly strategic role HR has played in the legal sector – particularly among the larger firms that have rapidly grown on a global level, and especially as the recession has put effective people management and restructuring strategies centre-stage.
Poised and ready for economic recovery: The critical role for legal IT
The survey findings suggest that legal IT may be having the toughest time in the current economy from a remuneration perspective. Particularly at the most senior levels, the average salary often trails other business services functions by £10,000-£20,000 or more.
On the whole, however, legal IT salaries in 2011-2012 are higher than in 2009-2010, despite a slight drop this year in average salaries at more senior levels In London. Outside London, director level salaries have fared much better with salaries rising by 10% this year.
Any lull in IT salaries is also likely to be temporary. When the economy eventually recovers IT will likely find it gets a significant boost as firms realise they need to address a recession-linked lag in IT investment and urgently update systems.
The benefits of law
Beyond salaries, the survey reveals that benefits are increasingly being used across business services functions as a creative and cost-effective way to attract and retain top talent. This works for employees who are increasingly choosing to work with firms that can offer a wide range and choice of benefits. But benefits can also work for firms that can’t always compete for top talent on the basis of salary alone.
This year 85% of firms are offering salary sacrifice benefits schemes – 16% more than in 2010-2011. In addition, 41% of firms are offering flexible benefits – an increase of 18% on last year.Specific benefits include the obvious: life assurance, pension and private healthcare for instance. But 84% of firms are now offering reduced working days per week compared with 63% last year. Such a benefit can be a win-win situation for firms and employees alike, offering work/life balance opportunities for staff and cost-efficiencies for firms in more cash-strapped times.
A positive outlook
Business services salaries in law have held up remarkably well despite the kind of ongoing economic uncertainty that has kept many a salary completely frozen in other sectors.
This suggests that business services functions are already highly valued by their firms; perhaps the recession has even given some the opportunity to really demonstrate their worth.
At the same time, the climate is encouraging innovation. Benefits are increasingly creative and tuned to the changing requirements of a new generation of employees joining legal.
Uncertainties undoubtedly remain. How could they not in the current economic climate? But for business services professionals, the legal profession is proving that it is not only one of the more stable sectors, but it is also one that is now willing to embrace creative thinking in what has become a period of major change in the profession.