When evaluating an offer, determine what is and is not negotiable. Find out whether your target employer has a lock step or merit-based compensation system and where you might fall within their scheme. Many law firms have an established base or narrow range of compensation for each class year within their associate ranks, while others have compensation bands depending upon the lawyer’s mastery of core competencies. In-house employers also often have preset salary ranges based upon executive bands or levels. At the partner level, most firms have some system or formula for setting compensation, with varying amounts of discretion or room for negotiation. Most organizations also have established benefits plans and set perks. Therefore, you may find yourself with an offer package where not everything is open to negotiation.
It is important to understand exactly where there is room for movement. Pushing for concessions that are impossible for the employer to make may damage your relationship or terminate discussions. You also must consider the entire compensation package, not just the salary component. If salary is on the low end and not negotiable, other items in the package may make up the difference to make, overall, a very attractive offer.
The components of a typical offer break down as follows and will vary depending upon whether you are at the associate or partnership level, and whether you are interviewing for an in-house or law firm position:
- Base salary is the most easily quantifiable component of the offer.
- Bonuses (for signing, hours over a stated minimum, performance, etc.), profit sharing, percentage of business generation, stock options/grants/employee stock purchase plan, a stake in the client investment fund, and the like are secondary cash components.
- Benefits include some or all insurance premiums (health, life, long- and short-term disability, vision, dental, and dependents’ coverage), 401(k) or other retirement plan (and employer matching), “cafeteria” plans, paid vacation or personal days, paid/reserved parking, continuing education tuition reimbursement or other professional training expenses, relocation plan, parental leave, child- or eldercare expense assistance, loans/forgivable loans, Bar exam stipend (if applicable), and – depending upon the employer’s business – discounts on goods or services.Consider, also, negotiating vesting schedules or cash in lieu of any of these benefits.
- Perks might include a business development allowance, bar and other professional organization dues, print or online subscriptions, country club/health club memberships, employer charitable donation matching programs, travel expenses, car or transportation allowance, cell phone, laptop computer or tablet device, office furnishings.
- Other, less quantifiable but still important terms of an offer may include title and/or timing of partnership consideration, start date, flex time/telecommuting, billable hours requirements, timing and frequency of performance and compensation reviews, duties/responsibilities, assurances that you will be working on particular types of matters or with certain partners or clients, office size and location, etc.
Don’t put potential employers in a bidding war over you. This will leave the impression that money is your most important priority and that you might leave for another opportunity that pays just a little more.
Know up front what you want and what you would accept, and don’t keep asking for more. You want to negotiate your best deal when you are walking in the door, however, as it will serve as a baseline for your compensation adjustments down the road. If base salary is negotiable, ask for a little more than you want so you have room to move, but don’t make an outrageous request. Likewise, request a few perks and benefits that are expendable, as this will allow you to give up some in return for others. Don’t go to the mat for things that, truly, are not deal-breakers for you.
If you find that the base salary is non-negotiable or, even after bargaining it remains below your target, move to your next angle of approach: “Although the salary component of your offer is not as high as I had anticipated based upon my market research, I am still very interested. Is there anything else here that is negotiable in order to sweeten the package?” Determine, for example, whether there is any wiggle room in your title or classification that might affect your compensation. That way, you can get an increase without violating the prospective employer’s established compensation system. Alternatively, perhaps you can ask for a performance and salary review in three to six, rather than the standard 12 months. If you agree to take less money now in return for reevaluation or reconsideration later, however, make sure you get this promise in writing and preferably with specific, measurable goals and rewards.
Any move should make career sense first and economic sense second. When evaluating an offer against your current compensation and competing offers, compare the economic and non-economic value of the various components. The best job offer overall may not be the one with the highest current monetary value. You want to communicate to your potential employer that you appreciate this move for the totality it presents. Consider the challenge and opportunity for career growth, training or exposure to a broader or more sophisticated practice, variety of work, more responsibility, chemistry with your new colleagues, the ability to attract and better serve clients, stability and growth of the organization, a more balanced lifestyle, and its alignment with your long-term career goals. Sometimes trading top dollar for other considerations can lead to greater job satisfaction and higher earning power in the long run.