Knowledge is Power: Preparing to Negotiate Your Compensation Package

Knowledge is Power: Preparing to Negotiate Your Compensation Package

Preparation is key to effectively negotiating your compensation when either starting a new job or asking for a raise. Before negotiating, do your research to establish a reasonable salary range, know your bottom line and non-negotiables, consider alternative concessions, understand the employer’s constraints, recognize their “pain points” and your value in alleviating them. Don’t forget the final step, psyching yourself up for the process. With preparation, you will feel more confident and make a stronger argument to achieve the best results.

 

Gather facts and figures

As a baseline, you should know the total value of your current compensation package and each of its various components. This includes not only your base salary, but also any bonuses and profit sharing, benefits such as all types of insurance and retirement plans, and perks such as car allowance, computers, phones, extra vacation time, etc., as well as the timing and amount of your next expected increase. If you are considering relocating, calculate the cost of living differential, so you understand the buying power of your salary in the new locale. There’s a substantial difference, for example, between Iowa dollars and New York dollars!

You also need to know the fair market value for someone with your skills and level of experience at the size and type of law firm or company and in the geographic area where you are interviewing. Salaries at law firms in the same region can vary depending upon size and the profitability of its practice areas. Research the target employer, its competition and (for in-house positions) the industry, the typical benefits package for this type of employer in this geographic area and, if possible, an approximate range of what your target employer usually pays and its standard benefits package.

The SEC requires publicly-traded companies to disclose their executive compensation. You can research compensation for the top management, and estimate compensation for someone in your desired position from there. Other sources for compensation information include industry websites, government labor data and help-wanted ads from your target employer and competitor law firms and companies. Online salary resources include: GlassdoorPayScale, Salary.comIndeed.com, Vault.com, The Bureau of Labor Statistics, and careeronestop.org.

Professional and Bar associations also are excellent sources of salary information. These associations often conduct regular surveys of their members, yielding current and job specific salary information. Trade publications, such as those found at Law.com, often publish compensation information relating to law firms and corporate law departments. The U.S. Bureau of Labor Statistics and the Occupational Outlook Handbook also provide helpful data and statistics on salaries. If you are using a legal search consultant, ask your recruiter, who should have in-depth knowledge of the market and the compensation packages offered by the prospective employer and its competitors. Anecdotal evidence from your colleagues, friends, and coworkers also is helpful, but take such information with a grain of salt. Investigate more than one of these resources to obtain several perspectives.

 

Establish a realistic salary range and your target number

Once you have a clearer understanding of the salary ranges prevalent for the type, size, and location of your target law firm or company, develop a general range that is reasonable for the position and within which you feel comfortable. It’s important to know your bottom line, below which you will not accept an offer. Calculate the amount necessary to meet your needs (this figure does not need to be mentioned, just kept in mind). Consider your salary history and current rate of compensation, and determine the salary increase over your current compensation that would entice you to make such a career move, and that should set the lower end of your range. Weigh the nature of the opportunity when determining your bottom line, however. There may be circumstances that merit taking a short-term pay cut because the position offers the potential for greater career growth in the long run.

In negotiations, don’t offer a number at the low end of the range, as that tells the prospective employer that you are willing to accept that amount, and it’s difficult to negotiate up from there. Aim for the high end of the range, a bit more than you expect to receive, so you have wiggle room during the process.

 

Consider constraints and present alternatives

Recognize the prospective employer’s constraints. There may be a strict seniority or lock-step compensation system which limits their ability to offer anything outside a narrow range. Also, consider the authority, interests, and individual concerns of the person on the other side of the table. For example, negotiating with a prospective boss is very different than negotiating with an HR representative. The better you understand their constraints and motivations, the more likely you can propose options to accommodate them. Beforehand, brainstorm a few other bonuses, benefits, and non-salary perks that you might accept in lieu of compensation. Possibilities include title, schedule flexibility, personal leave, profit sharing, reduced-cost benefits, an accelerated review, or professional development opportunities. Just make sure to get the all elements of the package in writing before you accept an offer.

 

Build your case

Marshal evidence proving you're well worth the salary you're requesting. Refresh your recollection by reviewing your salary history and compensation research, your major qualifications and accomplishments relevant to the position you seek, and examples of how you helped past employers save money, increase earnings, or improve efficiency. Think about the prospective employer’s “pain points” and articulate specifically how valuable you can be in solving those problems and contributing to the firm’s success.

Create and practice delivering a one-minute "elevator pitch" summing up your qualifications, experience, and potential value to the organization. Look for any loopholes or inconsistencies in your argument and try to anticipate and craft responses to any potential objections to your compensation request.

 

Psych yourself up

Negotiating about money is stressful especially when negotiating on behalf of yourself. Sometimes it helps to mentally reframe the exercise so that your own needs aren’t primary. Tell yourself that a better outcome benefits not only you as an individual, but also your family and others similarly situated in the organization, or in the legal profession as a whole. For example, successful salary negotiations on behalf of any individual woman can help narrow the gender gap between men’s and women’s earnings across the board.

Rather than approaching compensation negotiation as combat, think of it just a conversation leading to agreement, or as a game involving a process of back and forth. Lawyers, especially, shouldn’t passively accept the first offer. In most cases, some negotiation is expected. In fact, failure to do so can be a negative as it signals that you might be a pushover when advocating on behalf of a client.

To prepare, visualize yourself striking a balance between being simultaneously calm and alert, proactive and patient, confident yet humble, and fully grounded yet creative. Like an actor warming up to go on stage, develop rituals to get into character. Learn what works for you and, just before negotiating, meditate, exercise, strike a power pose, listen to calming or invigorating music, or do some deep breathing.

Practice! Look for opportunities to negotiate over smaller matters in your personal and everyday life. Notice how often you can and do negotiate with your colleagues, friends, children, and significant other each day. Set up role playing practice sessions, as well.

Most importantly, believe that you are worth every penny.

Valerie Fontaine

Valerie Fontaine

Valerie A. Fontaine earned her JD from UC Hastings College of Law and her BA, Phi Beta Kappa and magna cum laude, from UCLA. She was on the Editorial Board of COMM/ENT, a Journal of Communications and Entertainment Law. Valerie practiced law with a prominent Los Angeles law firm and entered the legal search profession in 1981. Valerie serves as Secretary to the Board of Directors of the National Association of Legal Search Consultants (NALSC).
Valerie Fontaine

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