General Counsel compensation in UK private equity: key changes and how to secure the right package

The role of General Counsel (GC) in UK private equity firms is evolving fast. What was once largely a risk and compliance function has become central to deal strategy, fund operations and value creation. As a result, compensation structures are beginning to reflect this shift, though there is no one-size-fits-all model.

Packages are evolving beyond base salary to include carry and long-term incentives – especially as upcoming tax reforms come into play. As specialists in hiring in-house legal teams for private equity, we’re seeing new trends emerge and key considerations for GCs negotiating their next move.

Base salary and bonus

Most GCs in UK private equity firms receive a solid base salary complemented by an annual discretionary bonus. Bonus size varies widely depending on the firm’s scale, fund lifecycle stage and the GC’s involvement in transactions.

At larger firms, bonuses can match or even exceed base salary, especially where the GC leads fund structuring, M&A or regulatory navigation.

Spot bonuses

Spot bonuses – one-off payments linked to specific deals or projects – are growing in use, though details are rarely public. These bonuses reward significant contributions like closing major transactions, managing fundraises or resolving complex regulatory challenges. While not always formally structured, they demonstrate increasing recognition of GCs as commercial leaders, not just legal advisors.

Carry and co-investment

Unlike investment professionals, GCs do not typically receive carried interest or co-investment rights by default. However, in some firms – especially those with inclusive partnership cultures – senior GCs may negotiate access to these long-term incentives. This is more common where the GC sits at the management table, contributes to fund governance or supports strategy beyond Legal Counsel.

It’s important to note that carry is usually negotiated over time rather than offered upfront and often comes with vesting conditions.

The impact of upcoming UK tax reform

From April 2026, the UK will change the tax treatment of carried interest. Unless certain conditions are met, carry will be taxed as income rather than capital gains. Funds that meet the “average holding period” test can still qualify for a lower effective tax rate (~34%) instead of the full income tax rate (up to 45%).

This reform affects how attractive carry is as a form of compensation and may push firms to reconsider offering carry or to increase cash and bonus elements instead. For GCs, understanding these changes is critical when negotiating any carry or deferred incentives.

Why compensation differs so much across firms

There’s no standard playbook for GC pay in UK private equity – and that’s part of the challenge. Compensation can swing dramatically depending on the firm’s size, fund maturity and how deeply the GC is embedded in the business. Some firms treat the GC as a strategic partner, involved in everything from deal structuring to investor relations, while others still view the role through a narrower compliance lens.

Culture plays a big role too: firms with flatter hierarchies or more collaborative leadership styles tend to offer broader incentive packages, including access to carry or co-investment. Ultimately, it’s not just about what the GC does – it’s about how the firm values that contribution. Factors influencing compensation include:

• Firm size and assets under management
• Fund lifecycle stage
• Scope of the GC’s responsibilities
• Firm culture and governance structure
• The GC’s influence and relationship with investment teams

What GCs should ask for

When negotiating compensation, consider these key questions:

• Is there a discretionary bonus scheme linked to fund or transaction milestones?
• Have GCs or other non-investment professionals received carry or co-investment, and on what terms?
• Is carry awarded at hire, or only after certain milestones or tenure?
• How will the April 2026 tax changes affect carried interest or deferred compensation?
• Are you involved in discussions about long-term incentives and firm economics?
  

GCs are increasingly recognised as strategic partners within UK private equity firms. While base salary and annual bonuses remain the foundation, spot bonuses and negotiated access to carry or co-investment are growing in importance.

It’s worth going beyond the headline numbers. Ask about visibility into firm performance, your role in shaping long-term strategy and whether legal is part of broader compensation conversations. These discussions aren’t just about securing a better package – they’re about making sure your contribution is reflected in how the firm invests in you.