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Mycousinsteve

Salary Negotiation Tips

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Hey team, I will be going for a 1st year associate position interview. I have an idea of what the range is for my field (~60-85k, same firm I articled at), but I’m wondering if and how to negotiate. I do not have any other offers at this juncture so I don’t have much leverage. 

My strategy is to go in, listen to what they say, and if they give me a number which is substantially lower than what I’m expecting, than I can say something along the lines of “based on my research, my understanding is your proposed figure is below the market rate for a first year lawyer. I’m more comfortable at x range and I’m prepared to work hard and so forth to demonstrate why I’m deseving as such.”

Beyond that I’m not sure what else I can say. Ultimately I recognize I’m lucky to have a potential offer and this is just the starting ground. I also recognize I’m not 5 years in with a book of business, a solid reputation, and 3 other offers on the table, which would better enable me to negotiate.

That said, it’s obviously easier to get these things out of the way before accepting a job, rather than asking for a raise 2 years in and crossing your fingers.

 

Any help would be appreciated thanks!

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12 hours ago, Mycousinsteve said:

 

Hey team, I will be going for a 1st year associate position interview. I have an idea of what the range is for my field (~60-85k, same firm I articled at), but I’m wondering if and how to negotiate. I do not have any other offers at this juncture so I don’t have much leverage. 

My strategy is to go in, listen to what they say, and if they give me a number which is substantially lower than what I’m expecting, than I can say something along the lines of “based on my research, my understanding is your proposed figure is below the market rate for a first year lawyer. I’m more comfortable at x range and I’m prepared to work hard and so forth to demonstrate why I’m deseving as such.”

Beyond that I’m not sure what else I can say. Ultimately I recognize I’m lucky to have a potential offer and this is just the starting ground. I also recognize I’m not 5 years in with a book of business, a solid reputation, and 3 other offers on the table, which would better enable me to negotiate.

That said, it’s obviously easier to get these things out of the way before accepting a job, rather than asking for a raise 2 years in and crossing your fingers.

 

Any help would be appreciated thanks!

I've never negotiated a legal salary, but from my experience in past positions, I would not give a proposed range. If you went into a store to buy a TV and the salesperson said:

"Yep. This model right here? Ooof. It costs between $1000.00 and $2000.00. So, how much do you want to pay?"

You'd likely be walking out of the store $1000.00 lighter.

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59 minutes ago, setto said:

I've never negotiated a legal salary, but from my experience in past positions, I would not give a proposed range. If you went into a store to buy a TV and the salesperson said:

"Yep. This model right here? Ooof. It costs between $1000.00 and $2000.00. So, how much do you want to pay?"

You'd likely be walking out of the store $1000.00 lighter.

Agreed. My comment, however, was more so to say that if they offer me a figure which is substantially lower than the going market rate, than I would pipe up and say something but quote a hard figure, not a range. That said, if what they offer me is within the aforementioned “range” than I would probably let it go. Gotta start somewhere I suppose. 

Did you then just accept whatever you have been offered in previous years and move on? 

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33 minutes ago, Mycousinsteve said:

Agreed. My comment, however, was more so to say that if they offer me a figure which is substantially lower than the going market rate, than I would pipe up and say something but quote a hard figure, not a range. That said, if what they offer me is within the aforementioned “range” than I would probably let it go. Gotta start somewhere I suppose. 

Did you then just accept whatever you have been offered in previous years and move on? 

I'm an articling student with a larger full service firm. From my understanding, there isn't much leeway with negotiating salaries until you are in the 4th year-ish range as they stick firmly to lockstep. You take what they give you for the chance to participate in the delightful pyramid scheme that is a national firm.

Having said that, I've had considerable business experience before law school. But like I said before, the legal world can be weird sometimes and is a market I've never participated in before law school, so please consider that before taking any of my advice.

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Problem is as a first year associate you have very little leverage.  My instinct would be to listen to their offer, if it's within the market range then take it, if you think it's below range make a counter-offer, but be prepared to just take what is offered anyways.

This might sound pretty passive (and it is), but you'll be in much better shape to negotiate as a 2nd or 3rd year associate.  You'll have actually billing history to point to.

And OP didn't say the size of their firm - it is correct large national firms will have lockstep compensation, with no real room to negotiate.  But smaller to even mid-size firms will be more flexible.

[Note: as always be careful taking business advice from a career government lawyer]

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Not a national firm, they’re a smaller firm and sporadically hire, although I have heard the lock step salary increases. I’m going to guess there may be a little wiggle room to negotiate and I want to be my own advocate but I agree once I have some more experience I’ll be in a better position. 

That being said, I’ll try and put in a counter if it’s not a reasonable rate. But my question is what’s my argument? How and why do I defend why I should be given a higher rate than what they offer? Sure I can say it’s “below the market rate” but I don’t have much else to go on. 

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9 minutes ago, Mycousinsteve said:

Not a national firm, they’re a smaller firm and sporadically hire, although I have heard the lock step salary increases. I’m going to guess there may be a little wiggle room to negotiate and I want to be my own advocate but I agree once I have some more experience I’ll be in a better position. 

That being said, I’ll try and put in a counter if it’s not a reasonable rate. But my question is what’s my argument? How and why do I defend why I should be given a higher rate than what they offer? Sure I can say it’s “below the market rate” but I don’t have much else to go on. 

What's wrong with how you put it aboce? “based on my research, my understanding is your proposed figure is below the market rate for a first year lawyer. I’m more comfortable at x range and I’m prepared to work hard and so forth to demonstrate why I’m deseving as such.”

One note: at a smaller firm you may have more flexibility negotiating a base pay + % of billing arrangement, rather than a straight salary - at least that was my experience in a small firm.

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1 minute ago, Malicious Prosecutor said:

What's wrong with how you put it aboce? “based on my research, my understanding is your proposed figure is below the market rate for a first year lawyer. I’m more comfortable at x range and I’m prepared to work hard and so forth to demonstrate why I’m deseving as such.”

One note: at a smaller firm you may have more flexibility negotiating a base pay + % of billing arrangement, rather than a straight salary - at least that was my experience in a small firm.

I suppose because I don’t have a second offer/haven’t been applying elsewhere as of yet I don’t have the confidence to go in as boldly. But objectively that is the right approach. I also articled at the same firm so I can point to my work ethic and so forth. 

I suspect it’s going to be a base + commission structure rather than straight salary. In which case I suppose I can ask for a higher percentage as my counter which would work in conjunction with bringing up my past experiences. 

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10 minutes ago, Mycousinsteve said:

I also articled at the same firm so I can point to my work ethic and so forth

Caveat I'm still a law student but I suspect another thing going for you is the fact that you're familiar with their internal processes. Internal hires are generally preferred over external because of efficiency reasons, regardless of industry.

And I'm sure you can point to more than just work ethic. Think of specific experiences during articling that were particularly impressive.

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18 minutes ago, Mycousinsteve said:

I suppose because I don’t have a second offer/haven’t been applying elsewhere as of yet I don’t have the confidence to go in as boldly. But objectively that is the right approach. I also articled at the same firm so I can point to my work ethic and so forth. 

I suspect it’s going to be a base + commission structure rather than straight salary. In which case I suppose I can ask for a higher percentage as my counter which would work in conjunction with bringing up my past experiences. 

If you articled there, are there any associates who can give you advice on rates?

I negotiated my first year compensation with my firm. We talked about market rates for salary, market hourly rate for first year calls in our field, how much revenue I could potentially generate, other associated costs, fee split percentages etc. It was pretty candid. We came to an agreement after about a week of back and forth, based on all these considerations. And I'm due to renegotiate in 5 months time (which we also agreed, based on how the year went).

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4 minutes ago, thegoodlaw said:

If you articled there, are there any associates who can give you advice on rates?

I negotiated my first year compensation with my firm. We talked about market rates for salary, market hourly rate for first year calls in our field, how much revenue I could potentially generate, other associated costs, fee split percentages etc. It was pretty candid. We came to an agreement after about a week of back and forth, based on all these considerations. And I'm due to renegotiate in 5 months time (which we also agreed, based on how the year went).

There’s nobody I’m particularly close to there, although I tried to get a general idea of what 1st year rate at the firm is and I have a good idea. I also wouldn’t be surprised if they come at me with some sort of structure + potential to renegotiate at 6 months or 1 year in. Caveat though is that obviously at that time they can turn around and say sorry we don’t have a budget for a raise right now, whereas right now I obviously haven’t started working there yet so there’s a higher chance of success at negotiating a better rate. 

They’ve essentially intimated to me that me that I have the job. I’ve made a good impression, so its just a question of sitting down for a meeting and having that chat. This isn’t solicitor work, its exclusively litigation (I’d rather not to get too specific for anominity) so I can’t really point to previous hourly billings and what not, but if they do offer me a base + commission structure, than I suppose I can turn it around and negotiate the commission structure or the starting base and go from there. 

Ultimately the one thing I do have going in my favour is that whereas you need articling to get your license, I will have my license I’m done all that jazz. Meaning I can walk away if I’m unhappy. I probably woudln’t unless its a totally terrible offer and I realize how difficult it can be to land a job, but there’s nobody forcing me to stay there type thing. 

From what I’m gathering, the strategy should be to go in, listen to what they have to say, and respond with a firm counter, whether it be for a higher commission or base, or salary altogether if I’m wrong it isn’t a base/commission. Point to my experiences articling there, why I’m an asset, and then move on. 

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Posted (edited)

These are some tips my friends and I have shared while negotiating our salaries or bonuses (which are in no particular order):

1) track your hours now. Billable, non billable, and what has been collected. It is difficult to gather this from some firms. Break it down by month and calculate what you expect you would do in a year, assuming 20 days of vacation, etc.

2) take #1 for the year and divide it by 3. This seems to be the rule of thumb for salaries. I don’t know why, and I don’t know if it’s standard. Is it billable? Is it collected? Nobody knows and the rules always change!

3) Find out what other firms, other associates, former associates, NALP, other resources say you should be earning. Take it all with a grain of salt. If you can point to a published report, great.

4) Don’t give them a large range, or at least don’t expect them to pay you 85k when you asked for a range of 60-85k. Try to get them to tell you their # first and then you can be better off telling them if that doesn’t fit in your range. Explain to them in percentages how far off they are (e.g. that’s 20% less than the market salary according to report XYZ).

5) There are other non-salary items that they can provide which can be huge cost savings to you and you can try negotiating if it’s not included : Law society fees, insurance, robes, bar association or other legal association fees, the amount of your CPD budget, technology budget (laptop, cellphone, cellphone plan, etc.). Think about items that are going to be necessary for you in order to practise and that the firm may already have or be able to get at a discount (and write off as a business expense).

Lastly, you’re way more marketable 1 year into practise than you are as an articling student. So yes, you can try to negotiate. But don’t be surprised if a firm that lowballs you in the start does the same thing come review/bonus time. Just come prepared and negotiate as professionally as you can. I know some senior lawyers are offended by the concept of negotiating a salary with a junior...but I don’t know how much I would trust a lawyer that can’t (reasonably) advocate for themself.

 

Edited by purplelego
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8 minutes ago, purplelego said:

These are some tips my friends and I have shared while negotiating our salaries or bonuses (which are in no particular order):

1) track your hours now. Billable, non billable, and what has been collected. It is difficult to gather this from some firms. Break it down by month and calculate what you expect you would do in a year, assuming 20 days of vacation, etc.

2) take #1 for the year and divide it by 3. This seems to be the rule of thumb for salaries. I don’t know why, and I don’t know if it’s standard. Is it billable? Is it collected? Nobody knows and the rules always change!

3) Find out what other firms, other associates, former associates, NALP, other resources say you should be earning. Take it all with a grain of salt. If you can point to a published report, great.

4) Don’t give them a large range, or at least don’t expect them to pay you 85k when you asked for a range of 60-85k. Try to get them to tell you their # first and then you can be better off telling them if that doesn’t fit in your range. Explain to them in percentages how far off they are (e.g. that’s 20% less than the market salary according to report XYZ).

5) There are other non-salary items that they can provide which can be huge cost savings to you and you can try negotiating if it’s not included : Law society fees, insurance, robes, bar association or other legal association fees, the amount of your CPD budget, technology budget (laptop, cellphone, cellphone plan, etc.). Think about items that are going to be necessary for you in order to practise and that the firm may already have or be able to get at a discount (and write off as a business expense).

Lastly, you’re way more marketable 1 year into practise than you are as an articling student. So yes, you can try to negotiate. But don’t be surprised if a firm that lowballs you in the start does the same thing come review/bonus time. Just come prepared and negotiate as professionally as you can. I know some senior lawyers are offended by the concept of negotiating a salary with a junior...but I don’t know how much I would trust a lawyer that can’t (reasonably) advocate for themself.

 

Thanks your feedback. Couple comments: 

 

1) This isn't solicitor work, it's litigation, so billable hours/targets or whatever does not apply. 

2) I'm going in as a 1st year Associate, this isn't an articling student position, however, I get the spirit of your comment - I'm obviously a lot more marketable a couple years in rather than as a rookie. 

3) Correct me if I'm wrong, I've heard that most firms will cover law society fees, law pro, and so forth , so I'm not sure if I should hold that with significant weight if that's the case here. However, if they offer items such as medical/dental insurance, RRSPs, life insurance, generous vacation time, etc I agree that those benefits do have their own added value on top of whatever salary is offered (whether straight salary or base/commission). 

4) Yes I'm prepared to go in with a figure in my mind based on reports I've found online as well as information I've picked up from my discussions with friends and colleagues, and if they are substantially off from that figure, I will point that out in a polite/non-aggressive way and see if there's an opportunity to meet somewhere in the middle. That said, I have heard from other lawyers who have their own firms that generally, 1st year rates are pretty much standard and non-negotiable. I suppose anything can happen, but my main focus is not to leave a sour taste/come off as greedy when I'm only just beginning my career. Certainly if I had a couple years under my belt, a book of business, and potentially a second offer in my pocket, I wouldn't be afraid to be a little more ambitious with my negotiations. 

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44 minutes ago, Mycousinsteve said:

Thanks your feedback. Couple comments: 

 

1) This isn't solicitor work, it's litigation, so billable hours/targets or whatever does not apply. 

2) I'm going in as a 1st year Associate, this isn't an articling student position, however, I get the spirit of your comment - I'm obviously a lot more marketable a couple years in rather than as a rookie. 

3) Correct me if I'm wrong, I've heard that most firms will cover law society fees, law pro, and so forth , so I'm not sure if I should hold that with significant weight if that's the case here. However, if they offer items such as medical/dental insurance, RRSPs, life insurance, generous vacation time, etc I agree that those benefits do have their own added value on top of whatever salary is offered (whether straight salary or base/commission). 

[remainder omitted]

1) What? Billable hours, targets, etc. generally apply to litigation settings as well as solicitor. Even if it's not part of an official/communicated policy at your firm, billable hours are just a metric for your financial productivity and I can't imagine your firm would be uninterested in that.

2) The 1/3 formula isn't about your productivity/marketability now vs. later. The general thought is that 1/3 of your billed amount goes to you, 1/3 goes to overhead/expenses, and 1/3 is firm profit.

3) Most medium and large firms in Toronto will cover Law Society fees, but I'm not sure that's so common for smaller firms or outside the city.

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23 minutes ago, barelylegal said:

1) What? Billable hours, targets, etc. generally apply to litigation settings as well as solicitor. Even if it's not part of an official/communicated policy at your firm, billable hours are just a metric for your financial productivity and I can't imagine your firm would be uninterested in that.

2) The 1/3 formula isn't about your productivity/marketability now vs. later. The general thought is that 1/3 of your billed amount goes to you, 1/3 goes to overhead/expenses, and 1/3 is firm profit.

3) Most medium and large firms in Toronto will cover Law Society fees, but I'm not sure that's so common for smaller firms or outside the city.

Yeah, all of this.

But if it does turn out that billables/targets don’t apply to litigation then I’m running straight to my bosses to let them know that they’ve been scamming me for the past few years 🤯.

 

 

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29 minutes ago, leafs_law said:

Yeah, all of this.

But if it does turn out that billables/targets don’t apply to litigation then I’m running straight to my bosses to let them know that they’ve been scamming me for the past few years 🤯.

 

 

Perhaps its the type of litigation work you’re doing? I’d imagine if the firm is operating on a retainer agreement, then clearly tracking your time and therefore billing against the client’s retainer is important. But if let’s say you’re in PI and you’re operating on a contingency fee situation, then I’d imagine whether you work 19 hours or 140 for that one file, regardless you’re still taking away whatever % is agreed between the firm and the client in terms of a future settlement/if it goes to trial and you’re successful. 

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49 minutes ago, Mycousinsteve said:

Perhaps its the type of litigation work you’re doing? I’d imagine if the firm is operating on a retainer agreement, then clearly tracking your time and therefore billing against the client’s retainer is important. But if let’s say you’re in PI and you’re operating on a contingency fee situation, then I’d imagine whether you work 19 hours or 140 for that one file, regardless you’re still taking away whatever % is agreed between the firm and the client in terms of a future settlement/if it goes to trial and you’re successful. 

Interesting. Do they not track hours in PI? What if the client wants to jump ship to different counsel, how would you bill them for services rendered?

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53 minutes ago, Mycousinsteve said:

Perhaps its the type of litigation work you’re doing? I’d imagine if the firm is operating on a retainer agreement, then clearly tracking your time and therefore billing against the client’s retainer is important. But if let’s say you’re in PI and you’re operating on a contingency fee situation, then I’d imagine whether you work 19 hours or 140 for that one file, regardless you’re still taking away whatever % is agreed between the firm and the client in terms of a future settlement/if it goes to trial and you’re successful. 

Or legal aid work, depending on the file.

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43 minutes ago, setto said:

Interesting. Do they not track hours in PI? What if the client wants to jump ship to different counsel, how would you bill them for services rendered?

For the record I'm not in PI, I just picked that as an example of civil litigation type work. I don't actually know what happens if the client wants to end the relationship. Perhaps in that case yes they would get some sort of a bill for hours worked, but generally, whatever the settlement is, the firm would bill a percentage of that. 

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5 hours ago, Mycousinsteve said:

Perhaps its the type of litigation work you’re doing? I’d imagine if the firm is operating on a retainer agreement, then clearly tracking your time and therefore billing against the client’s retainer is important. But if let’s say you’re in PI and you’re operating on a contingency fee situation, then I’d imagine whether you work 19 hours or 140 for that one file, regardless you’re still taking away whatever % is agreed between the firm and the client in terms of a future settlement/if it goes to trial and you’re successful. 

I am humbled. I have never even thought about what goes on in the contingency fee world in terms of effects on advancement and compensation.

Admittedly, I’ve always been on Bay and while I do take notice when opposing counsel is on a contingency agreement, i only do so where that gives me some insight on their motivations for litigation strategy.

Though, if I operated my own firm on contingency, I would still want to track my associates’ hours as a way of seeing how much work they’re actually doing for me. There is probably an art and science to quickly making money without spending many hours on a file, even at a junior level, but I also think that a junior shouldn’t be penalized for spending tons of their time on a file that doesn’t end up being lucrative. 

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