How to negotiate your way to more pay

Across the City law firms have concluded their 2017/2018 financial year. For the first time in a long time most firms across the City have reported strong performance, delivering a profitable finish to the year. Deloitte reports that amongst the UK’s largest law firms there has been an average 8.7% increase in fee income in the final quarter. In fact, all of the UK’s top 100 law firms have reported growth at various levels, the most modest of which was reported to be around 4-6%, seen generally amongst the smaller firms. This strong performance has allowed for the legal recruitment market to pick up pace at all fee earner levels. The private client, employment, litigation and arbitration sectors are just some of the spaces we’ve seen significant expansion and success this financial year.

However, over the last few years we’ve seen a rapid increase in disgruntled candidates, especially at the senior level; candidates that are frustrated and concerned with their level of remuneration and the less than generous pay increases year on year. Work pressures, client targets and billable hours have increased but remuneration has not, at least not at a level that bares any resemblance to the increased pressures our candidates are facing. Inflationary salary increases haven’t stopped but tantilasing bonuses, handsome equity shares and healthy basic salary reviews have. Until now, law firms could persuasively, and reasonably, justify their decisions not to meet salary expectations on conservative financial performance, market instability and of course, Brexit.

Fortunately, the financial diligence and caution most of our clients were, understandably, taking is lessening as market confidence improves. With better fee recoveries, greater freedom to increase hourly rates and further growth and profit forecasted for the coming years, lawyers are wanting to renegotiate their financial packages. Here’s your five point guide on how to do it:

1. Your financials are critical. Be ready and armed with all of your financial statistics from the last 18-24 months (only if it’s positive, of course). You must be ready and able to identify your billings (including on those cases that you may have been the supervising matter associate/partner). Be ready to identify, with figures, the fees you have recovered and, most importantly, be ready to identify what percentage of that work originated from you versus what work was allocated to you. If your figures are not necessarily representative of what you have achieved in the past, dissect them, analyse them and be ready to explain why.
2. Your managerial capabilities shouldn’t go unnoticed. Take a close look at which team members you have trained, supervised and/or mentored. At non-partner level this is a very valuable contribution since you’re freeing up partner time that can otherwise be spent winning client work.
3. Business development shouldn’t be just a cliché. Your business development efforts must be documented and accounted for irrespective of how senior or junior you are. It’s a given that every lawyer shows their face in the right space at the right time. How else will you ever enhance your peer profile? But, what else have you done to stand out from the saturated crowd? What events have you orchestrated? What clients have you attracted to your team or the wider firm? What proportion of potential clients are you able to successfully convert into retained clients?
4. Valuable non-fee earning contributions. Have you assisted with managing or mediating any team grievances? Have you spent time reviewing the team/firm’s complaint procedure? Have you assisted with improving the team’s knowledge management function in your spare time? What valuable pro-bono work have you assisted with and what difference has this made to the firm’s reported corporate responsibility. A common contribution that often goes a miss in the salary review process is contributions to, and management of, submissions to legal directories. Such rankings have become the ‘go to’ place for competitors, peers, referrers, counsel and, more frequently, potential clients. It is a hugely time consuming and important task; don’t let it go unnoticed.
5. Phone a friend. Approach three or so people you have worked with in the past 12 months and ask them if they’d be happy to provide a few lines about their experience of you. A well-balanced combination might be: a) senior counsel you’ve instructed on a matter you were heavily involved; b) a former client (ideally in circumstances where the matter has been concluded); c) a professional referrer; and d) an opponent you worked really well with (if your work is non-contentious in nature think about a professional peer that has referred work to you previously).

At risk of stating the obvious, the art to a successful salary review (or indeed any performance related review meeting) is to make sure you have properly prepared for it. That means having all the important information at your finger tips. Leave your comfort zone. Rarely are these meetings concluded unsuccessfully if you have assimilated the right information, presented it with confidence (remember we often have a very skewed perception of our abilities) and, make sure what you’re presenting resonates with the person sitting across the table from you. If you do that, you’re 50% the way there.

If compensation is not your only driver, or indeed, the negotiations do not conclude as you would hope, please get in touch with us to consider, on a strictly confidential basis, how we can help.