Want the right salary? This is a harsh new market calling for skillful handling of the process.
"Before entering into salary negotiations, it is imperative that you understand the economics of your law firm before you can even entertain the idea of “reasonable raise.”
If you’ve ever read the lists for Top Ten Stressors, losing your job is right up there with life altering events. Looking for a new job or asking for an unplanned salary increase should be the stressor located on the list right under losing your job. If you’ve been on the job market or involved with a firm that has “battened down the hatches” in response to “tough economic times”, you know that this current tight market can wreak havoc on your nerves. You search and search, receive plenty of rejections, search again, interview, interview, interview and sit tight. Or, you rehearse the ask-for-a-raise scenario with your boss only to find your forehead is sweating right on down to your shoes.
Then, after finding that dream job, you hold your breath hoping the right amount of money will be offered. That little stressor is guaranteed to give you hives, insomnia or worse, little crow’s feet right around your otherwise perfectly smooth eye-area from all the worrying you’re bound to do. All I can say to that is, “Botox!! Someone give me Botox!!”
Relax. Chances are if your strategy is in place, and the job is a fit, you’ll end up getting the dollars you want or at least, pretty close to it. You’ve got to know at this point in your career, that there are ground rules to the negotiating game. Some of those rules work and some, well, let’s just say because nothing in life is a guarantee, they’re good to know about anyway.
Above all else, knowing the current marketplace is the first place to start. Generally speaking, today’s raises are little more than 2-3% if at all. Several years ago, prior to recessions, economic downturns, and lean-mean-company-machines, raises in law firms could go upwards of 8-10%. Bonuses in some firms were heavenly. Some paralegals in major metropolitan areas reported bonuses of $10,000 - $20,000.00. I doubt these were the paralegals who also received overtime pay, however. But the fact remains, that law firms were once of a more generous mindset than they are today. Of course, things were very different. Clients were more accepting of a law firm’s bills. Hardly even questioned it, actually. Wow, have things changed!
In order for a paralegal to get ahead in today’s shaky market, it is imperative that you understand the economics of a law firm before you can even entertain the idea of “reasonable raise.” Going to the boss to ask for a raise based solely on what you think you should earn does not always get you what you want. Asking your present or potential employer to give you thousands and thousands of dollars more than what they were thinking of won’t work simply by saying, “I’m worth it.” There has to be some substantive reasoning behind the incremental dollars. Before you jump for more money, consider:
1. What is the market rate for someone with your experience level, educational background, and work history from comparable firm or organization?
2. What percentage of salary increase does the firm generally give employees? Or, if you are seeking employment, about how much more than a candidate is currently earning does the firm generally go? Some firms will only be willing to grant a slight increase; others insist on lateral moves while others will pay whatever the going rate is.
3. Was the firm’s paralegal department profitable last year? (This is hard information to obtain.) If the firm’s department suffered a revenue or net loss last year, chances of getting a stellar raise, despite your performance, may not be very good. However, you can use this as a negotiating technique if you are seeking a new position. You might say, “By hiring someone at my experience level and expertise, you may be able to turn this program around.” In other words, Ms. Employer, pay the right dollars for the right person.
4. Has the firm recently undergone huge changes that called for significant investments such as computer systems, phone systems, office renovation? Investments that do not bring in revenue are cash outlays that can temporarily cripple cash flow. If your firm is suffering from the Great Recession, it may not be looking to increase salaries. Firms may trim raises or high salaries in an effort to survive.
5. Are you profitable? Are the firm’s billing rates in line with going rates? Is time being written-off that you don’t know about? Often times, paralegals not aware that they are “stars” in the eyes of the administrator because they are highly profitable. If that’s the case, the firm might be able to let loose with a few more dollars. Or, if you are negotiating for a new position, do the math for yourself. If the billing rates are too low and you are asking for a high salary, what incentive does the firm have hire you if they are unwilling to charge more?
Here are just a few suggestions that can help you the next time you get an offer or negotiate for a raise:
1. When asked the salary or raise you are seeking, don’t give a range. Giving a range gives employers permission to offer you the lower amount. Many paralegals have said, “I’m seeking between $55 and $60,000” and are taken back if they receive the lower figure. In my book, you’ve given employers permission to offer you the lower amount, so there should be no surprises. It’s much better to say, “I’m looking for around $60,000”, or, “I’m seeking the upper $70’s.”
2. Never lie about the salary you are now getting. There are 3 things that employers can check: dates of employment, reason for leaving and salary. In this day and age of tighter background checks, you take the risk of being found out. It’s not worth losing the job because you inflated your current salary.
3. Know what the market will bear at your experience level. Don’t guess about what the going rate is for positions at your experience and expertise levels. Get your hands around current survey data. If you are offered a salary or raise at below market rate, you might say, “According to recent salary survey information, this offer/raise is slightly below market rate. How can we work together to bring the base number up?”
4. If you get an offer/raise that is below what you were expecting, do not respond with a close-ended question or statement such as:
a. This offer is less than what I am currently earning.
b. I would like the compensation part of the offer re-evaluated.
c. Can you change the salary?
d. The base salary is lower than what I expected.
You’ve given the employer no room for negotiation and you’ve responded negatively to what is probably a well-thought out offer/raise. Instead, it is better to respond with:
a. I appreciate the pressure you must be under. I would like to find a way for us to resolve one area of concern. I’m hoping that the firm has some flexibility.
b. Thank you for this insightful offer/raise. I’m delighted to work (remain at) at Rain & Thunder. However, there is one remaining issue that I hope we can resolve together.
c. I have some concerns about the level of assignment in regards to what the corresponding pay is. Can you clarify a few things for me?
5. You might also use these techniques:
a. Given your need for someone with my background and given my interest in this firm, can you share with me how we might exercise some flexibility in this offer/raise?
b. How can we reshape this compensation package?
6. If you still can’t get them to come up in the offer/raise, try these:
a. In what ways can we redefine this offer/raise?
b. In what way, other than compensation, can we think about changing the nature of this offer/raise?
7. You might be able to negotiate additional perks instead of compensation. Some of those perks might be:
a. A better or private office
b. Additional vacation
c. Credit for more experience with the firm
d. Salary in lieu of health insurance (perhaps your spouse already has you covered)
e. Better or stronger title (You can always take that with you when you leave and leverage it for more money then.)
f. Continuing education
g. A salary review in 3 – 6 months.
When you start the negotiation process, remember that you place yourself in a risk-taking situation. There’s always the risk the employer will say no or even, while rarely, withdraw the offer. But if you accept an offer knowing that you are not at all happy about it, you’ll probably be looking to leave in a very short time.
There are two approaches to your negotiations: Countering is used when you are uncomfortable with every aspect of the offer. You will negotiate from top to bottom to improve the offer. A limited counter is used when you feel the offer is partially acceptable or close to what you want and you negotiate for a portion of the offer. At the outset of either approach, realize that whatever salary or perks the firm decides to bestow upon you must be met with a realized benefit to the firm in doing so. Train yourself to present a benefit to the firm for each request.
You must decide what your acceptable range of salary will be. Take in factors such as your current salary as an experienced paralegal; going market rate for experienced or entry-level; location of the employer (some regions pay less); size of the firm; current market conditions; practice specialty and level of assignment. Don’t expect to go much higher than current market unless you have an exceptional skill you are bringing to the marketplace.
Take deep cleansing breaths…….walk into the meeting prepared for a collaborative discussion, not a fight. A decision to accept a position or raise should be based on many factors and salary is only one of those factors. Make an intelligent, informed decision. Above all, don’t walk into the negotiating session with an “all or nothing” attitude. You’ll be defeated easily.
If you are leaving too much on the table, leave the door open to be reviewed in 3 to 6 months. Be sure you ask for a salary review, not a performance review. Some firms have the attitude that you are an unproven commodity. If you do get the firm to commit to a mid-year review, be sure to get it in writing. Three months down the line, it will be difficult for the reviewer to recall exactly what was said, or it’s even possible that the same person will not be in that position.
Be sure to portray a positive, confident, easygoing professional (even if you are extremely nervous) and above all, don’t issue an ultimatum. They aren’t effective. If you are working with a headhunter, for heaven’s sake, make sure they are skilled in negotiations! Nothing is worse when the headhunter does not understand what you want. If you are negotiating on your own, here is a great opportunity to get involved in the process. Only you can take your career and make it what you want. The negotiating process is a perfect opportunity to help shape that career.
There you go! Negotiating for a new position or raise can be fun and exciting. Just remember to be flexible, open, good at what you do. Don’t try to alienate anyone. The rest should fall into place.