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bertiewooster

Salary negotiation - commission structure

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I'm a 5th year call, in the process of leaving the firm I articled with for a new firm and starting to negotiate pay. I'm a solicitor, practicing primarily in wills and estates with some real estate.

I'm in a small community, moving to another small community, and am finding it difficult to get much information about pay outside of the larger centres.

I do, however, think that what I'm currently making is kind of odd. I get a base of $75k, plus 10% of anything I bring in over $150k, and 20% of anything I bring in over $175k. My impression from others I've talked to is that this is a bit unusual, but my problem is that my good friends, who are willing to talk money, are in Toronto, and I'm not close enough with any of the young lawyers in my town to ask. 

I'd like to shoot for a higher commission. What I'm not clear on is whether it's more common to be paid a lower commission on everything collected, or a higher commission only on collected billings above a certain target.

If this has been discussed before, please point me to the proper thread - I did search but didn't see any discussion of this particular question.

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22 minutes ago, bertiewooster said:

I'm a 5th year call, in the process of leaving the firm I articled with for a new firm and starting to negotiate pay. I'm a solicitor, practicing primarily in wills and estates with some real estate.

I'm in a small community, moving to another small community, and am finding it difficult to get much information about pay outside of the larger centres.

I do, however, think that what I'm currently making is kind of odd. I get a base of $75k, plus 10% of anything I bring in over $150k, and 20% of anything I bring in over $175k. My impression from others I've talked to is that this is a bit unusual, but my problem is that my good friends, who are willing to talk money, are in Toronto, and I'm not close enough with any of the young lawyers in my town to ask. 

I'd like to shoot for a higher commission. What I'm not clear on is whether it's more common to be paid a lower commission on everything collected, or a higher commission only on collected billings above a certain target.

If this has been discussed before, please point me to the proper thread - I did search but didn't see any discussion of this particular question.

What do you collect in a year, and what % is your compensation of those total receipts? 

 

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Last year (my 4th year out) I collected approx. $210k, and made about $9,500.00 commission. So my total compensation of $84,500.00 was just over 40% of my receipts. 

 

(edited because I misread your question)

Edited by bertiewooster

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9 minutes ago, bertiewooster said:

Last year (my 4th year out) I collected approx. $210k, and made about $9,500.00 commission. So my total compensation of $84,500.00 was just over 40% of my receipts. 

 

(edited because I misread your question)

That's pretty standard. 

Are you bringing in work? If so, you could probably negotiate a better percentage than 40%. 

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Realistically, I think the distance is far enough that I won't bring many clients with me, if any. The new firm has no solicitor at the moment but lots of files, so the work is sort of there waiting for me.

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Being an articling student, but having worked in a pure commission environment in a previous career, I would be inclined to ask for something in the vein of eat what you kill minus shared expenses or something close to 60-40 in your favour than a straight 40% cut. Depends on who you're working with and what the capacity is for increases in business.

Again, I am an articling student. I have literally 0 experience with law firm pay structures, but this is something I think about a lot.

 

If you're not going to be doing any business development, then I would be inclined to think that they may as well have you on a salary. Look at it from an objective perspective and think how your current structure could be as easily structured as a straight 85k salary and see why that makes sense. Your current salary structure is also kind of weird to me, it might as well be 77,500 with 20% of receipts over 175k/year.

If you're considering splits, I would always ask to the see three years receivables and billables before accepting or even mulling the idea over.

I was offered one of: 55k/year, 35k/year base with 20% split on all receipts, or a 40% split as an articling student/first year with fees/insurance/CPLED covered by employer.

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Your base is $75,000 and you will get $75,000  

That means you get 50% up to $150,000

However, you will get a lower percentage between $150,001 to$174,999. You will get $75,000+$2,500=$77,500 if $174,999= $77,500 or 44.28%

For $210,000 you got $95,000.

$210,000-$175,000 =$35,000 x 20% = $7,000+$2,500+$75,000 

$84,500 is 40% of $210,000.

If you pull in $250,000,then you will get $250,000-$210,000 =$40,000

20% of $40,000 = $8,000. Your total will be $84,500+$8,000 = $92,500

$92,500 is 37% of $250,000.

"diminishing return arrangements?"

Edited by Luckycharm
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