Salary · New York in-house buyers
PEP: useful metric or vanity number?
A company buys two New York legal markets: hours from firms, and in-house seats on its own payroll. Profit per equity partner sits on neither invoice. Using it to set a fee or a hire mis-sets both.
Two markets. One vanity number.
A New York general counsel who asks whether profit per partner is a price signal is already standing in two markets: the panel the company instructs, and the in-house desk it employs. Across 1,675 structured interviews with New York in-house counsel and hiring managers, those were the only two prices that still made sense once a compensation committee opened the file.
The chief legal officer is an employee. PEP is what remains after the firm has paid everyone who is not an equity owner. Copying the residual into an offer letter is how a New York posting misses the statute and the market on the same afternoon. Strip it from the paper. Rebuild on ACC cash.
A company buys hours and payroll seats. It does not buy an owner’s residual. How the residual is built is the next section.
- $3.59M
- Am Law 100 average PEP, 2025Firm-wide owner residual, not take-home and not a New York-office cut
- David Lat, Original Jurisdiction, 30 April 2026, citing the 2026 Am Law 100
- $1,795
- New York Am Law billed hour, H1 2025What in-house teams were invoiced for partner time, not a rack rate
- Brightflag, Hourly Rates in Am Law 100 Firms, 2025 edition
- $410k
- U.S. GC / CLO median total cashSelf-reported, effective 1 March 2025; not a New York-only cut
- ACC / Empsight, 2025 Law Department Compensation Survey
- 41%
- legal departments under a cost-cut mandate772 chief legal officers, 20 industries, 48 countries
- ACC / FTI, 2025 Chief Legal Officers Survey
A company buys hours and payroll seats. It does not buy an owner’s residual.
PEP is net income divided by equity owners. It is not a rate and not a salary.
The metric a compensation committee keeps quoting is an average over a shrinking denominator. That is a fact about partnership design, not a fact about what a New York general counsel should pay.
Owner residualCompany cash
- PEP Net income divided by equity owners. Moves when salaried ranks grow and the equity rank does not. Never on the invoice.
- The billed hour What the legal department is invoiced, by rank, practice and metro. The fee market the company actually buys.
- In-house cash What the head of HR can put on a posting for a general counsel, chief legal officer or associate general counsel seat.
PEP is net income divided by equity owners, not a rate and not a salary. David Lat’s 30 April 2026 write-up of the 2026 Am Law 100, covering calendar 2025, is blunt about the arithmetic: average profits per equity partner of $3.59 million, up 14.0 percent; revenue per lawyer of $1.39 million, up 8.7 percent; aggregate gross revenue of $178.95 billion, up 13.0 percent; attorney headcount 128,868, up about 4 percent, with nonequity ranks up almost 7 percent and equity ranks up about 2 percent. Those are firm-wide owner and productivity averages. They are not a New York-office P&L, and they are not what any named individual took home.
The denominator is the point a chief legal officer is owed. Equity owners, in the Am Law construction, are those who receive no more than half their compensation on a fixed-income basis. Everyone else — income / nonequity ranks, counsel, associates — sits outside it. Profit those salaried lawyers generate accrues to the equity residual. Hold the equity rank nearly flat and grow the salaried ranks, and PEP rises without a single extra dollar appearing on the company’s invoice. Bloomberg Law, on 10 June 2026, reported the same lever from its firm questionnaire: equity-shareholder counts stayed roughly flat in the prior year while nonequity counts grew 5 percent. Citi’s 2026 Client Advisory, published 11 December 2025, recorded the 2025 run-rate version through nine months: equity-partner headcount −0.5 percent, income-partner growth +6 percent, leverage +4.3 percent.
That is why a law firm partner salary conversation and a PEP conversation are not the same conversation. PEP is an average over owners. Individual packages at the extreme end are something else: Bloomberg Law’s June 2026 piece, citing a MesaFive adviser, described individual compensation above $40 million in 2026 as the extreme, at an unnamed firm. Treat that as an anecdote about the tail, not as a fee and not as a general counsel benchmark. The companion page on partner pay at the Am Law top 50 owns the residual as a residual. This page owns the buyer’s question: whether a New York company can use it.
Citi remains the most important U.S. expansion market in New York and names London second. That ranking is a firm-side intention, not a conversion rate. Do not import a UK residual into a New York fee or a New York hire. The two markets a company buys here are the invoice and the payroll. The residual belongs to the people who own the firm.
The residual
PEP is net income divided by equity owners. It moves when the firm adds salaried lawyers or holds the equity rank flat. A general counsel does not pay it.
The invoice
The company pays billed hours, rank mix and any alternative fee. Brightflag records what in-house teams were actually invoiced, by metro and practice.
The payroll
The company also buys in-house seats: general counsel, chief legal officer, associate general counsel, legal operations. ACC/Empsight prices those titles as cash, not as an owner residual.
The invoice carries a billed hour. It does not carry PEP.
What a New York general counsel actually pays a firm is rank mix, metro and practice on hours that were invoiced. The owner residual is a different ledger.
Brightflag’s 2025 edition of Hourly Rates in Am Law 100 Firms is the fee-side instrument: billed (invoiced) rates, not rack rates, for 1 January to 30 June 2025, drawn from billions of dollars of outside-counsel spend. The New York partner hour on the grid above is the metro peak. Around it, the same file puts a blended Am Law 100 hour at $1,145 (+8.3 percent versus 2024, after +10.0 percent the year before); Am Law 1–25 partners at $1,635 and their associates at $1,065; Am Law 76–100 partners at $845. M&A partners at the top 25 billed $1,843 (+9.7 percent); corporate $1,692; litigation $1,594. Partners accounted for 30.3 percent of billed time at Am Law 1–25 versus 50.0 percent at Am Law 76–100. Rank mix is a lever the general counsel already owns. PEP is not.
Thomson Reuters Institute, with Georgetown Law’s Center on Ethics and the Legal Profession, published the 2026 State of the US Legal Market on 7 January 2026 and put 2025 worked rates up 7.3 percent in the report body (7.4 percent versus 2.8 percent inflation in the companion Law Firm Rates Report dated 20 October 2025). Average Am Law 100 lawyer standard rates “cracking the $1,000 barrier” against about $600 elsewhere is the arithmetic the same report gives for moving work downstream. Ninety percent of legal dollars still flow through standard hourly arrangements, per Legal Tracker in that write-up. A chief legal officer policing rates, alternative fees and AI clauses is managing that 90 percent. Indexing the conversation to an owner residual does not touch it.
Citi’s Figure 13, in the May 2025 Annual Survey of Law Firm Performance as published in the 11 December 2025 Client Advisory, is the cleanest demonstration that the title “partner” is not a price. For 2024, large-firm equity owners realized $1,327 an hour on 1,529 hours. Income ranks realized $1,052 on 1,526 hours and took salary and bonus of $850,000. Counsel realized $1,036 and took $529,000. Associates realized $789 on 1,652 hours and took $346,000. Contribution after overhead — the number that shows an income rank contributing less than counsel — sits on the bars below. A company paying a “partner” rate is not paying PEP. That is the mix file. It is not the residual.
The invoice carries a billed hour. It does not carry PEP.
A New York posting must carry a cash range. PEP is not one.
The second market a company buys is its own in-house desk. The head of HR has to publish a number. The residual cannot be that number.
The requisitionThe person who can sit
- Posted cash NYC Local Law 32/59 and Labor Law section 194-b force a good-faith min and max onto the advertisement. PEP cannot go there.
- New York bar UBE, NYLE, MPRE, NYLC — or motion under Court of Appeals Rule 520.10. Manhattan seats certify to the First Department.
- SDNY / EDNY Joint Local Rule 1.3, as amended 2 January 2026, for any federal-court seat. A company buying that desk is buying this gate, not a residual.
ACC and Empsight International’s 2025 Law Department Compensation Survey — 1,632 self-reported U.S. respondents, data effective 1 March 2025 — is the payroll taxonomy a New York head of legal actually prices. The cash scale below is that survey’s title stack. What the scale does not carry: general counsel / chief legal officer 90th percentile base $506,000; 96 percent short-term-incentive eligible at a 35 percent target; 63 percent long-term-incentive eligible at a 40 percent target; deputy general counsel median total cash $368,000 and median TDC $424,000; associate general counsel median total cash $294,000; senior attorney median total cash $228,000; attorney median total cash $160,000; single-lawyer general counsel median base $234,000 and median total cash $255,000. Prior law-firm experience added 21 percent to CLO median base and 16 percent to attorney median base. This is a U.S. national self-report, not a New York-only cut. It is still the band a compensation committee can defend. PEP is not.
Company scale moves the chair more than any residual does. The same ACC/Empsight executive summary puts chiefs of legal at organizations with revenue above $5 billion at 44 percent more base and 173 percent more total target compensation than chiefs at organizations under $1 billion; large-company CLO median total target exceeds $1 million. Twenty-eight percent of respondents had changed jobs in the past two years; 16 percent had received a promotion; non-promoted merit increases averaged 3.5 percent (median 3.0 percent). The general counsel salary 2026 page owns the full cash anatomy. This page owns the mistake of indexing any of it to PEP.
The statute is what makes the residual unusable as a posting input. NYC Administrative Code § 8-107(32), Local Law 32 of 2022 as amended by Local Law 59 of 2022 (Council 28 April 2022; Mayor 12 May 2022; effective 1 November 2022), requires a good-faith minimum and maximum annual salary or hourly wage on advertisements for jobs, promotions or transfers performed at least in part in New York City. New York State Labor Law § 194-b, effective 17 September 2023 (NY DOL P687, September 2023), extends a similar duty to private employers with four or more employees for work performed at least in part in New York, or that reports to a New York supervisor or office even if the work is remote out of state. Open-ended ranges are forbidden. An Am Law owner residual is not a good-faith range for an associate general counsel seat. If it cannot go on the posting, it cannot set the offer.
Live 2026 postings make the same point without a survey. A global alternative-asset manager posted, on 2 September 2026, a New York Legal & Compliance attorney (Total Portfolio Management, AVP) at an expected annual base of $135,000–$200,000 plus discretionary bonus, with “management of external counsel” named as a duty — the hire a funds desk makes instead of buying a residual. A New York–headquartered Am Law firm’s careers page, accessed 9 September 2026, listed New York associate seats in antitrust and competition (3–6 years, expected base $260,000–$390,000) and IP litigation (3–7 years, $260,000–$420,000): the hours a company buys, not a CLO payroll. Cravath’s published New York associate scale, the same week, ranged from $225,000 to $420,000. On the public side, the New York City Law Department pays Assistant Corporation Counsel between $87,737 and $188,235 by years after law school; the Department of Consumer and Worker Protection posted an Associate General Counsel on 21 June 2026 at $160,858; the U.S. Attorney’s Office for the Southern District of New York advertised an Assistant United States Attorney (Financial Litigation) at $137,926–$197,100 including locality, deadline 30 September 2026; the State Attorney General’s Level 1 assistant band is $99,002–$139,308 plus $4,000 location pay for New York County. None of those advertisements carries PEP. NALP’s 2025 U.S. Associate Salary Survey, released 28 May 2025 and taken as of 1 January 2025, puts the New York City first-year median at $225,000 (56.5 percent of 23 reporting NYC offices). Above the Law’s June 2026 scorecard then recorded a New York–headquartered first mover, on 2 June 2026, resetting the associate scale to $235,000 through $455,000 effective 1 July 2026. That is the cost stack inside the firms a company buys from. It is not a general counsel salary table.
Attorney median base
The first in-house title a head of legal posts. Companion total-cash figures sit in the paragraph above.
ACC / Empsight, 2025 Law Department Compensation Survey, effective 1 March 2025PEP rose because leverage and rates moved. Department budgets did not.
The 2025 residual is a story about hours, rates and a smaller equity rank. It is not a story about what a New York legal department was authorized to spend.
Thomson Reuters Institute / Georgetown, in the 7 January 2026 report, put 2025 demand for the average firm at +1.9 percent (third-best year since the global financial crisis), Q3 at +3.9 percent, and weekday-adjusted demand averaging about 2.5 percent and hitting 4.4 percent in July. The report attributes the reversal to the second Trump administration, tariffs, trade disputes and a restructuring of the federal government. Average firm profit grew 13.0 percent. Midsize demand nearly 5 percent in the latter half of 2025; the Am Law 100 “couldn’t crack 2 percent.” Technology spend +9.7 percent; knowledge-management costs +10.5 percent; lawyer salaries +8.2 percent; lawyer FTE +2.9 percent; direct expenses 32 percent of average firm revenue. Net Spend Anticipation among corporate buyers dropped toward pandemic-era lows; the Institute forecasts demand slipping toward contraction by mid-2026. The sample: 184 U.S. firms, including 50 Am Law 100, and Market Insights interviews with about 2,500 legal buyers at companies with revenue above $50 million. Hours and sentiment moved. They did not move together.
Citi’s nine-month 2025 run-rate, in the same 11 December 2025 advisory, is the firm-side rhyme: revenue +11.3 percent, demand +1.9 percent, rates +9.6 percent, headcount +2.9 percent, productivity −0.6 percent, compensation expense +9.8 percent, operating expense +8.4 percent, collection cycle +1.2 percent, inventory +12.7 percent. Am Law 1–50: demand +1.8 percent, headcount +3.1 percent (all salaried), revenue +12.1 percent, inventory +14.6 percent. The advisory opened the year with executive orders targeting firms and tariff-driven volatility that delayed broad M&A — and still recorded that rate-and-leverage year. PEP moved because the denominator shrank. That is not a price the legal department pays.
ACC’s 2025 Chief Legal Officers Survey (772 CLOs, ACC with FTI Consulting, 20 industries, 48 countries) is the buyer-side constraint. Cost-cutting mandates climbed with company size: 51 percent at $1–5 billion revenue, 55 percent at $5–20 billion, 63 percent above $20 billion. Of those sending more work out, 43 percent attributed increased outside-counsel use to the global regulatory landscape. Sixty percent report higher litigation costs; 44 percent higher litigation volume; 42 percent more internal investigations. Understaffing is the top departmental barrier; 14 percent cite lack of budget. Headcount intentions, outside-counsel volume, extra functions and the U.S. reporting line sit on the bars below. A residual that printed a double-digit Am Law rise in that year is not a signal that the in-house desk got cheaper, or that the panel should get more expensive as a matter of right.
The work that filled the hours was regulatory and transactional, not residual. FTC Chair Andrew N. Ferguson’s memorandum of 18 February 2025 kept the 2023 Merger Guidelines in effect; a Davis Polk client update dated 21 February 2025 noted that the new HSR form had taken effect on 10 February 2025 with substantially more documents even for non-problematic deals. Wells Fargo Corporate & Investment Banking, citing LSEG/Pitchbook as of 31 December 2025, put U.S. announced M&A at $2.3 trillion (+57 percent), second-highest year on record after 2021, on 12,007 deals (−11 percent); sponsor deal value $1.2 trillion. Renaissance Capital’s 2025 Annual Review (2 January 2026) counted 202 U.S. IPOs raising $44.0 billion. The Administrative Office of the U.S. Courts, Table C-1 for the twelve months ending 30 September 2025, recorded 11,109 civil filings commenced in the Southern District of New York. FinCEN’s interim final rule of 26 March 2025, made permanent on 14 August 2026, stripped the domestic beneficial-ownership wave; New York’s LLC Transparency Act, effective 1 January 2026, left a narrower filing duty on non-U.S. LLCs authorized in the state, with pre-2026 entities due by 31 December 2026. The SEC, on 29 May 2026, proposed full rescission of the March 2024 climate-disclosure amendments after staying them on 4 April 2024 and ending its defense on 27 March 2025 — a compliance cycle a public-company securities AGC had to build and then unwind. NYDFS updated 23 NYCRR Part 200 custody guidance on 30 September 2025, and its September 2026 careers board still listed Virtual Currency associate-attorney and civil-investigations enforcement seats in New York City. None of those desks prices off PEP.
The Bureau of Labor Statistics Occupational Outlook Handbook puts national median lawyer pay at $151,160 in May 2024 (SOC 23-1011). OEWS is a wage survey: it excludes most self-employed workers and does not capture equity-owner profit draws. It is useful only as a reminder that PEP is not a wage. The New York State Unified Court System’s Attorney Registration Unit, at the end of calendar 2025, counted 102,325 registered attorneys with New York County as county of business (or residence if no business address), 105,395 in the First Department, 193,536 in-state, 367,591 registered in total. That is the pool a head of HR draws from. It mixes firm, in-house, public and non-practicing. It is not Am Law headcount, and it is not a residual.
PEP moved because the denominator shrank. That is not a price the legal department pays.
When profit per partner mis-sets the fee and the hire.
If the number cannot go on a New York posting and does not appear on the invoice, it is color in a board pack. It is not an input. Sartori has watched that mistake land in the file.
Usable inputVanity residual
- Fee file Does this number appear on an invoice the company has paid? Billed hour, rank mix, alternative fee. Keep.
- Hire file Can this number go on a New York posting as a good-faith cash range? ACC band, incumbents, approved min/max. Keep.
- Vanity Owner residual, firm-wide, last calendar year. Useful as firm-health color. Strip it from the offer and the rate card.
Sartori & Partners has worked the New York in-house market for more than ten years, for listed issuers, sponsor-backed platforms, alternative-asset managers and large private companies. Over the trailing three years the firm closed 24 in-house searches on this line, with a 94 percent completion rate and a typical timeline of 4 to 7 months; median offer-to-acceptance is 16 working days, and counter-offer incidence on the line is 28 percent. What this page adds is how PEP enters those files — and how often we miss it at the door.
Of those 24 closed New York in-house searches, 9 were general counsel or chief legal officer chairs at companies that already had a legal function, and 15 were associate general counsel, deputy, specialist or legal-operations seats. None of the 15 mid-level files used PEP as an input; 11 of the 15 arrived with a posted range already drafted from a peer-company survey or from last year’s incumbents. Three of the nine GC/CLO files arrived with an Am Law PEP chart in the compensation-committee pack. Sartori did not flag two of those three at intake. Both then slipped past the 4 to 7 month window and required a second compensation paper before an offer would hold. That is the finding that does not flatter the method: the residual still gets into the briefing when the client walks in with it, and we have let it through.
Direct testimony from the same cohort is consistent with the telemetry. A chief legal officer at a New York–listed corporate, revenue between $1 billion and $5 billion, told us the CFO had asked why an associate-general-counsel offer sat “below what the Am Law 100 makes per partner.” The CLO’s reply, as reported to us: “because we are not hiring an equity owner.” A head of legal at a New York alternative-asset manager, among 41 funds-desk hiring managers inside that cohort over an 18-month window, said the posted AVP/attorney range was built from last year’s incumbents and a peer-fund survey — “nobody in this building can tell you the PEP of the firms we instruct, and I would not want them to.” Of 88 heads of legal and HR directors inside the same cohort who had drafted a New York posted range over 24 months, 81 described the inputs as incumbents, a peer survey, or ACC/Empsight; 4 named an Am Law print as a first draft they then had to abandon.
Two composites, presented as Sartori engagements, sit inside that envelope. A listed New York issuer, revenue in the $1–5 billion band, opened a chief-legal-officer succession with a board pack that led on the Am Law residual. The search took six months once the paper was rebuilt on ACC total-cash and TDC bands for that revenue size; the first slate, priced as if the chair were an owner residual, had produced no one the compensation committee would sign. A sponsor-backed funds platform in Manhattan posted an in-house funds attorney (AVP) against last year’s incumbents, in a mid-five to low-six-figure base, with management of external counsel written into the job. Time-to-fill landed inside four months. No one in that process asked what the instructed firms printed for PEP. The second file is the one that closes.
Sartori maps about 67,000 lawyers in New York. Coverage is not a claim about who is sitting in a general counsel chair, and it is not a PEP. The quarterly survey since 2019 is the other instrument: New York in-house respondents in the 2025–2026 waves named billed-rate inflation, not the Am Law residual, as the number they take to procurement. Companies that call in-house counsel recruiting in this city are usually trying to put a lawyer on the payroll, not to decode an owner average. Legal recruiters in New York earn their fee on that distinction.
- Q1 Does this number appear on an invoice the company has paid? No → it is not a fee. Do not cap a rate with it.
- Q2 Can this number go on a New York posting as a good-faith cash min and max? No → it is not a hire. Do not index an offer to it.
- Q3 Is it an owner residual from last year’s Am Law print? Yes → firm-health color, at most. Strip it from the paper that sets the fee or the hire.
- → Invoice or posting: keep. Residual: vanity. If it cannot go on the posting, it cannot set the offer.
| When | What should be true | Vanity read | Who owns it |
|---|---|---|---|
| Rate-card renewal | Billed hours by rank and metro, alternative-fee share, partner-time mix on the actual matters | The panel firm's Am Law PEP print as a reason to accept or reject a rate | General counsel + legal operations |
| AGC / counsel posting | A good-faith cash min/max under NYC Local Law 32/59 and Labor Law § 194-b, built from ACC bands and incumbents | An Am Law residual copied into the requisition as if it were a salary | Head of legal + head of HR |
| GC / CLO chair | ACC/Empsight total cash and total direct compensation by company-revenue band, plus equity the board actually grants | A slide that asks why the chief legal officer does not 'make what Am Law makes' | Compensation committee |
| Panel addition or cut | Conflicts, government-contractor exposure, clearance and building-access risk, HSR and dispute capacity in New York | PEP rank as a proxy for whether the firm can do the work | General counsel |
| M&A / HSR wave | In-house corporate and antitrust capacity for the heavier HSR form; overflow priced by billed hour, not by owner profit | Assuming a high-PEP firm is the default for every notification | Chief legal officer + corporate AGC |
| Funds / custody file | The in-house funds attorney who manages external counsel, at a posted AVP/VP cash range | Indexing that seat to the PEP of the firms the desk instructs | Head of legal (asset manager) |
| Litigation spike | SDNY docket reality, Special Federal Litigation capacity, and whether the work sits in-house or on the panel | Reading a PEP print as a predictor of trial outcomes | General counsel |
| Budget lock | Net Spend Anticipation, the cost-cut mandate already on the legal-department budget, and rank mix on the invoice | A residual that rose while the legal department was told to cut | CEO + chief legal officer |
| Instrument | Who publishes it | Unit | What a general counsel can do with it |
|---|---|---|---|
| PEP | ALM / Am Law 100 | Dollars per equity owner, firm-wide | Firm health for a board that owns a relationship. Not a fee. Not a hire. |
| Revenue per lawyer | ALM / Am Law 100 | Dollars per lawyer, firm-wide | Productivity context. Still not an invoice and still not New York-only. |
| Billed hour | Brightflag / the company's ELM | Dollars per hour actually invoiced | Rate card, AFA, rank mix. This is the fee the general counsel pays. |
| Contribution per seat | Citi / Hildebrandt | Dollars after overhead, by title | Why an 'income partner' hour is not an owner residual. Context for mix, not a posting. |
| In-house total cash / TDC | ACC / Empsight | Dollars on the company's payroll | Offer, posting range, compensation-committee paper for the chief legal officer. |
For the in-house desk, the residual is a posting error waiting to happen.
- Write a cash range first. NYC Local Law 32/59 and Labor Law § 194-b will force it onto the advertisement. ACC/Empsight plus incumbents is the paper a compensation committee can sign.
- Name the seat the company actually employs. General counsel, chief legal officer, associate general counsel, legal operations — not an owner title borrowed from the panel.
- Buy the gate, not the print. New York bar; SDNY/EDNY where the desk needs federal court; for funds desks, the years of formation work the posting already names.
- If a board slide leads on PEP, rebuild before the first slate. The two GC/CLO files we let through at intake both ran long.
For the panel, the residual is firm-health color. The fee is the billed mix.
- Open the invoice, not the Am Law ranking. Metro, practice and rank mix set what the legal department pays. Citi’s contribution table is why an income-rank hour is not an owner residual.
- Re-underwrite use. Clearance, building access and government-contractor exposure were panel questions in 2025. PEP does not grade them.
- Staff the HSR and dispute wave in-house where it is cheaper, and buy overflow by the hour. Midsize demand captured the 2025 growth the Am Law 100 did not.
- Do not convert a residual into a discount you are owed. Leverage moved the print. It did not move the hour you were billed in New York.
Common questions from general counsel and heads of legal
Is profit per partner a useful number when a general counsel sets a New York fee or a hire?
No. It is a firm-wide owner residual; the usable New York prices are billed hours and in-house cash. David Lat’s April 2026 write-up of the 2026 Am Law 100 puts 2025 average PEP at $3.59 million; that figure never hits the company’s invoice or the posted range a New York advertisement must carry. Price the panel on Brightflag billed hours and the in-house seat on ACC/Empsight cash.
What should a chief legal officer use instead of PEP to set a fee or a general counsel salary?
Use the billed hour for the panel and the ACC cash band for payroll. Brightflag’s 2025 edition records New York Am Law billed hours at $1,795 for H1 2025; ACC and Empsight, effective 1 March 2025, put U.S. general counsel median total cash at $410,000 (90th percentile $764,000). Those are the two markets a company actually buys.
Why did Am Law PEP rise in 2025 if legal-department budgets did not?
Because leverage and rates moved, not because in-house budgets grew in lockstep. David Lat’s April 2026 Am Law 100 read puts 2025 PEP up 14.0% while equity ranks grew about 2% and nonequity ranks about 7%; Citi’s 2026 Client Advisory records equity-partner headcount −0.5% through nine months of 2025 against income-partner growth of 6%. ACC’s 2025 CLO survey, meanwhile, found 41% of legal departments under a cost-cutting mandate. The residual inflated as the buyer tightened.
Does a high-PEP firm cost a New York in-house team more on the invoice?
Not as a rule. PEP is not on the invoice; billed mix is. Brightflag’s H1 2025 file puts the blended Am Law 100 billed hour at $1,145, with Am Law 1–25 partners at $1,635 and Am Law 76–100 partners at $845, and with partners taking 30.3% of billed time at the top 25 against 50.0% at 76–100. Rank mix and metro, not the owner residual, set what the general counsel pays.
Can PEP go on a New York in-house job posting?
No. Since 1 November 2022 a New York posting must carry a good-faith cash range, not an owner residual. NYC Administrative Code § 8-107(32) (Local Law 32/59) and New York State Labor Law § 194-b (effective 17 September 2023) are the stacked duties. A $3.59 million Am Law average is not a lawful range for an associate general counsel or chief legal officer seat.
How do Sartori's New York in-house searches treat PEP when a board brings it in?
As a briefing error to strip, not as an input. Of 24 closed New York in-house searches over three years, 3 of 9 general counsel / chief legal officer files arrived with an Am Law PEP chart in the compensation paper; Sartori did not catch two of those at intake, and both then ran past the typical 4 to 7 month time-to-fill. The mid-level files — 15 of the 24 — used posted ranges, not PEP.
Am Law ledgers, billed-rate files, and department surveys.
Owner residuals come from the 2026 Am Law 100 as reported in April 2026. Billed hours come from Brightflag's H1 2025 invoice file. In-house cash and CLO spend mix come from ACC/Empsight and ACC/FTI. Contribution per seat is Citi Figure 13 for 2024. Regulatory clocks are the primary documents.
Sources and further reading
42 references- Sartori & Partners — New York Legal Talent Research Programme (1,675 structured interviews; ~67,000 lawyers mapped; quarterly surveys since 2019; mandate telemetry) sartoriglobal.com ↗
- The Top 20 Most Profitable Law Firms (2025) davidlat.substack.com ↗
- The 2026 Am Law 100 Is Out, And Surprise: The Rich Law Firms Got Richer abovethelaw.com ↗
- 2026 Report on the State of the US Legal Market: Peak prosperity and the fault lines below thomsonreuters.com ↗
- 2026 Report on the State of the US Legal Market (PDF) blogs.thomsonreuters.com ↗
- The legal market at a crossroads: 5 forces reshaping law firm success in 2026 legal.thomsonreuters.com ↗
- Law Firm Rates Report 2026: Law firms discover the hidden engine driving their pricing power thomsonreuters.com ↗
- 2026 Citi Hildebrandt Client Advisory citiglobalwealth.com ↗
- 2026 CITI HILDEBRANDT CLIENT ADVISORY (PDF) citiglobalwealth.com ↗
- Law Department Compensation Survey (2025 Executive Summary) acc.com ↗
- Risk, Compliance, Data Privacy, and Regulatory Changes Named Top Concerns for Global Chief Legal Officers acc.com ↗
- 2025 ACC CHIEF LEGAL OFFICERS SURVEY KEY FINDINGS acc.com ↗
- Hourly Rates in Am Law 100 Firms: Increases and Key Drivers (2025 Edition) 4713142.fs1.hubspotusercontent-na1.net ↗
- Big Law Equity Ranks Shrink to Make Room for $40 Million Pay news.bloomberglaw.com ↗
- LOCAL LAWS OF THE CITY OF NEW YORK FOR THE YEAR 2022 No. 59 nyc.gov ↗
- Pay Transparency | Department of Labor dol.ny.gov ↗
- PAY TRANSPARENCY LAW for Employers (P687 09/23) dol.ny.gov ↗
- Memorandum … SUBJECT: Merger Guidelines (FTC Chair Ferguson, 18 February 2025) ftc.gov ↗
- Trump administration signals strong approach to antitrust enforcement davispolk.com ↗
- Executive Order 14263—Addressing Risks From Susman Godfrey govinfo.gov ↗
- Trump signs executive order targeting law firm Susman Godfrey reuters.com ↗
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Am Law PEP and RPL are firm-wide owner and productivity averages for calendar 2025. Brightflag records billed hours invoiced in H1 2025. ACC/Empsight cash is U.S. self-report effective 1 March 2025, not a New York-only cut. Citi contribution figures are 2024 large-firm averages. Posted ranges are employer careers pages. Sartori figures are the New York in-house program: one interview cohort, 24 closed searches over three years.
PEP is not converted here into an implied hourly rate, a general counsel salary, or a multiple a company should pay. London is named as Citi’s number-two expansion market and is not explained. The $40 million individual package is an adviser anecdote from Bloomberg Law, June 2026, not a residual and not a fee. Charts that are not external statistics only count this page’s own lists.
Price the desk. Do not index it to the residual.
The payroll bands, the Am Law residual, and the in-house seats below the GC chair are adjacent files. This page owns only whether a company can use PEP as a price.
General Counsel Salary 2026
The payroll market this page refuses to index to PEP — base, bonus and long-term incentive for the chief legal officer the company actually employs.
Read the GC cash bandsPartner pay at the Am Law top 50
The residual itself: what the Am Law print actually measures, and why the average is not anyone's take-home. This page owns whether a company can use it.
Read the residualIn-house counsel salary 2026
Associate general counsel through senior attorney — the seats a New York head of legal posts, with cash ranges the pay-transparency statutes will force onto the advertisement.
Read the in-house bandsFor general counsel and heads of legal
Need a New York in-house seat priced on cash, not on a residual?
We run in-house and general counsel search for companies that have to put a lawyer on the payroll. Quiet, evidence-led, and just as willing to strip a vanity number from the briefing as to put a name on a slate.