Effective compensation negotiation requires research and preparation. You're representing yourself in these negotiations-no one else is watching out for you. Inadequate preparation may lead to undercompensation (no fun) or to an inappropriate salary request that may alienate an employer (also no fun).
*Note: if you got your job through OCI, compensation is determined by your employer and you have no room to negotiate. In fact, it is considered inappropriate to negotiate in such situations. Government positions usually don't allow for salary negotiation, either.
You need to research and prepare to talk about both your needs and abilities, and the employer's needs and abilities.
You'll need to determine your walk-away number-in other words, the salary below which you will not accept the job. Start by figuring out the basic monthly personal costs for you and your family, including:
- Housing costs, including insurance premiums and taxes.
- Medical, dental, vision, life, and disability insurance costs, including costs related to these items (e.g., monthly prescription drugs).
- Utility costs, including electricity, telephone, water, gas, garbage, cable TV, ISP, and DSL.
- Food costs, including groceries and daily out-of-pocket expenses.
- Clothing costs, including dry cleaning.
- Transportation costs, including vehicle loan payments, insurance, repair, gas, tolls, and parking, and public transit costs.
- Entertainment costs, including vacation, hobbies, newspaper and magazine subscriptions, meals eaten out, gym and social club dues, and gifts.
- Debt servicing, including student loan and credit card payments.
In addition to these costs, decide what additional amount of money you need to enjoy life. If your personal cost figure covers only your basic needs, you may become resentful and depressed because you're still living close to "student poverty." Your personal cost figure should therefore include the amount of money you need to survive, plus enough for you to be reasonably happy. This amount varies from person to person: are you willing to use public transportation, drive a modest or used car, or have a work wardrobe that does not require constant dry cleaning? How frequently do you want to eat out or have coffee drinks?
Once you've figured out your costs, you need to add an amount to cover taxes to come up with your walk-away number. A very general rule of thumb is to add 35% to your costs-in other words, multiply your cost figure by 1.35. Your actual taxes are determined by many factors-your tax bracket, whether you're single or married, how many deductions you have, etc.
You also need to determine what you have to offer the employer in order to convince them that you'll be effective and profitable. You won't be expected to be profitable immediately, but you need to able to demonstrate that you have that potential. To do this, take stock of everything you've done in during school and in your work and volunteer experiences (these are all listed in your resume, right?):
- In what areas have you done legal research?
- How was that research used-in pleadings, memoranda, letters to clients, interrogatories?
- Have you appeared in court? For what purposes-to argue a motion or present a trial?
- Have you had direct client contact, including clinical courses?
- What community activities and service organizations have you participated in?
- What experience do you have in management, administration, and budgeting?
Also make a list of people who know your work: faculty members, supervisors, colleagues, subordinates, co-counsel, opposing counsel, judges before whom you've appeared. You're becoming a member of a community, and you need to think about all of the people you know who are members of that community and who are already familiar with you and your work.
What are the employer's fee arrangements-billable hours, contingency fees, fixed fees, or a combination? You can get this information by talking to friends and classmates, by asking questions at the interviews, or by asking the Center for Professional Development. An employer's finances are directly related to its ability to pay you.
For example, if a firm uses billable hours, multiply the number of required billable hours by the hourly rate. This is the total amount of revenue that you're budgeted to produce. A very rough salary range is 30 - 50% of that number, depending on the firm's overhead and overall financial structure.
If an employer charges contingency fees, the fee is a percentage of the verdict or settlement amount. This means that an employer may not receive a fee in some cases. If the employer only does contingency fee cases, you might ask if there is a set salary, a guaranteed base minimum salary plus a percentage of the contingency fee if there is one, a guaranteed minimum base minimum salary plus a lump-sum bonus or salary increase for successful cases.
For comparison, research the range of salaries offered to lawyers with the same amount of experience as you by employers of a similar size, with a similar practice, and in the same geographic location. You can do this by asking friends and classmates, by checking the annual SU Law employment statistics, by checking the NALP associate salary survey (note that this is a national survey), or by contacting CPD.
Other parts of a compensation package may include medical, dental and vision insurance for you and your dependents; life and/or disability insurance; retirement plan contributions; profit sharing; vacation and sick leave; paid or unpaid family leave; Bar exam review courses, the Bar application fee, and a stipend; relocation costs; annual Bar dues and CLE fees; parking or public transportation costs; social club dues; and gym dues.
Negotiating compensation is like negotiating the purchase of a car or a home-the parties go back and forth until they reach a figure that meets both of their needs.
Let the employer make the first offer. When it comes time for you to name a number, either as a counteroffer or as an opening offer, name a range, not a number. This is also the time to discuss compensation based on some type of formula, such as a percentage of contingency fees or a bonus for meeting a billable hours goal.
If you've done your research, you'll be able to negotiate far more effectively. You'll know the market rate and what is reasonable for this type of work in this type of firm. You'll also demonstrate that you understand the financial structure of the firm and how you can contribute to the firm's productivity and profitability. All of these things will bolster your credibility by showing that you do your homework and make reasonable, supportable requests, and strengthen your negotiation position.
In general, for small to mid-size firms in King County, salaries range from $45-$60K. For very small firms and solos it may be less. In the smaller counties, salaries for small firms will generally be in the $39-$49K range. Public Defender’s in King County generally pay around $45K with the smaller counties and private firms with public criminal defense contracts in the $35-$39K range. The prosecuting attorney’s offices in King, Pierce, and Snohomish counties pay around $49K.