The Ultimate Guide to Attorney Salary Negotiations: Maximizing Your Career and Life Balance

 

Benefits of Firms with Low Billable Hour Requirements

A Personal Story from My Early Career

A story that I tell often to my candidates, as well as in my webinars, is the potential benefits of being with a firm without high billable hour requirements. When I was clerking for a federal judge at the beginning of my career, I was in a small market that included the cities of Bay City and Midland, Michigan. I attended a few mixers with about 10 attorneys who were in the first five years of their careers. These attorneys all worked for smaller firms in the region, and the largest law firm had around 20 attorneys. When I left Bay City and joined a large law firm in Los Angeles, I forgot about all these attorneys for over 20 years. However, with the advent of LinkedIn, many of these attorneys and I started communicating, and I realized something quite remarkable. All the attorneys I had known over 20 years ago were still at the same firms they had been with when I first met them. A few of them went to Michigan Law School, but most went to local law schools like the University of Detroit, Wayne State, and similar institutions. The common factor among these firms was that they did not have excessive billable hour requirements, and the attorneys did not have many other employment options, so they remained there. Moreover, they were all partners, and one of them was the head of the law firm she had joined.

Contrasting Experiences at Large Firms

In contrast, I am not aware of any graduates from my law school, the University of Virginia, who stayed in the same large law firms throughout their careers. Most bounced around from big firm to big firm, left the law entirely, or went in-house or into government roles. Similarly, most of the attorneys I started with in large law firms in Los Angeles left the practice of law completely or did other things because they were disillusioned with the practice of law after billing crazy hours at firms that paid a lot but required crazy hours. Not motivated solely by money, the attorneys I worked with in Los Angeles mostly became disillusioned with the law because they were beaten down. Large salaries require lots of hours, which can be exhausting, and attorneys seeking money often find that they do not like the practice of law.

Extreme Cases of Burnout

In the law firm where I started my career, there were two attorneys who left after years of massive billing and became lost. One murdered his wife by throwing her off a cruise ship and was sentenced to life in prison. Another attorney started a business, ran a scam, and got caught stealing a few hundred million dollars—he too went to prison. Almost all the attorneys I started my career with got divorced. At least a few I know of developed substance abuse problems. Several died early in their lives of heart attacks and cancer. I could scarcely believe the appearance of several of them after 20+ years—they looked like rough sailors who had been through the wringer—bad teeth, bad skin, and just rough all around. Most left the firm after dedicating years to it and went to firms where they had little control over their careers because they were never able to develop business after spending their careers billing 2500+ hours per year.

 

Understanding the Impact of Billable Hour Requirements

When you are evaluating salary, you need to understand that you are making decisions that could affect the course of your life.

 

Health and Personal Life

One of the most important variables to be aware of is billable hour requirements. These requirements will determine things like the quality of your health and how long you live, your psychological state, your relationship with your significant other, your relationship with your children now and for the rest of your life, your susceptibility to substance abuse issues, your ability to generate business and get control over your career—and much more.

Comparing Firms

Different firms have different billable hour requirements. If you are considering one firm compared to another, you may be leaving a firm that has a much higher requirement than the firm you are interested in working for. Different firms have different billable hour requirements and work ethics. Smaller firms may stop work at around 6:00 pm consistently. The offices may be almost abandoned on the weekends, and the attorneys do not expect you to work these sorts of hours. In contrast, other firms may expect undying commitment, requiring you to respond to emails and texts at all hours of the night and on weekends. While a law firm may have a stated minimum, none of the attorneys work this minimum, and if you are not billing a lot of hours, your quality of life will be determined by the hours you need to bill. Being in a situation without the stress of hours can be a game-changer.
 

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See Related Articles:

• Why Do Attorneys in Large Law Firms Work So Hard and Bill So Many Hours?
• How the Billable Hour Makes the Majority of Attorneys Dishonest and Unhappy: The Real Reason Why Most Attorneys' Careers Are Out of Control
• How Law Firms Make Money from their Attorneys and Clients: A Guide to Law Firm Economics for Attorneys

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Evaluating Salary and Quality of Life

If you are going to a law firm with much lower billable hour requirements, you will put yourself in a position where you may actually be making more money when you factor in your time. Having extra time could save your marriage, health, and much more. Thinking only about hours, then, may make a lower salary make more sense than a higher salary.

Being a High Biller in a New Firm

Another thing to consider if you can bill 2,200 hours at a new firm is what it would mean there. Regardless of whether you are going in as a partner or associate, hitting the same hours you are doing now at a new firm may make you among the highest billers, or the highest biller, in your new firm. This means you will be a superstar and stand out at the new firm, whereas you would just be one of many hitting the same hours at your current firm. Being a big fish in a smaller pond has all sorts of advantages. It is good for your self-esteem, makes it more likely you will become a partner, and gives you more job security and much more.

Job Security

What do I mean by job security? If you are the highest biller at a new firm, the firm will not want to lose you because you are making them a lot of money. If things get tight, you will be in a much better position than if you are a regular biller at your current firm.

 

Bonuses and Salary Negotiations

Law firms may also award bonuses that are either discretionary, guaranteed, or come with hitting certain billable hour goals. Therefore, a law firm with a lower salary may offset this with bonuses. Before you negotiate salary, you should understand whether or not the bonuses at a given firm may give you the same, close to, or a greater take-home salary. For example, you may be working 2,200 hours at your current firm. The firm you are considering working at may have a requirement that you work only 1,750 hours. This law firm may have bonuses for hitting certain hours that could result in you earning the equivalent of 2,200 hours of work.

 

Employment Stability and Career Prospects

Another issue to consider when looking at a new firm that pays less than your current firm is your employment stability at the new firm. It is very difficult for both associates and partners without business to predict stability at a new firm. This is a big issue. How likely is it that you will be able to stay at the new firm for a substantial length of time? Are you just showing up there as a soldier for hire, or do you see yourself being there for the rest of your career? What happens to attorneys like yourself who have joined the firm in the past? Are people happy? Does the firm want you to advance, or do they just need work from you?

Common Mistakes

I have been dealing with associates my entire career who lost high-paying jobs at major national firms—or were in the process of losing them. They seem to believe that because they received such a high salary at their previous firm, they should receive the same salary at a new firm. What they fail to realize is that if their existing/previous firm could not afford to pay them, other firms may not be willing to pay that much either. This is especially true in practice areas vulnerable to recessions—corporate and real estate, for example. If a firm cannot afford to pay you due to economic conditions, it is safe to assume that other firms in the same market may not be able to as well.

 

The Hidden Costs of High Salaries

When you choose to go to a major law firm, there are all sorts of benefits—salary being one of them. However, these salaries always come with a price—lots of hours, lack of opportunity to become a partner, and a difficult position to bring in business. If you are measuring an offer based only on salary, you need to understand the costs of that salary—especially at the largest law firms. Salary is exchanged for a lack of employment stability.

Trends in Big Firm Practice Areas

There is another trend I see all the time. There are senior associates out there with great skills in bankruptcy, capital markets, project finance, international arbitration, and other big firm practice areas. These attorneys often get offers in their practice areas with major law firms in big cities. However, the path is always the same. These attorneys get jobs there, work for a few years, and then are asked to leave. I’ve seen a few of them stay and move to counsel and partner positions, but it is incredibly rare. In most cases, they are giving up career stability for a high salary for a few years.

 

Dangers in Smaller and Newer Firms

Large law firms are not the only employment situations that are unstable. Smaller law firms can often be even worse. There are several reasons for this. For example, if you go to a law firm that is closely controlled—with only a few (or even one) real partners, you will be in a dangerous situation. These partners will never want to allow others to share in the wealth. They will always limit you, and you will be a soldier of fortune. These firms are easy to spot, and you can pick it up in your interactions with them. They will pay you as little as they can for as long as they can without advancing you.

Unstable New Firms

Another dangerous proposition is going to newer firms that are expanding and need people. It takes time for a law firm and its partners to understand how to manage a law firm and its people and place in the market. Many young law firms are tremendously dangerous places to be because they do not understand how to pay their people, partners fight about money, and they are often quite unstable.

 

The Importance of Career Stability

Career stability is incredibly important. When you go to a large law firm in exchange for a high salary, your options are typically to make partner (which is almost impossible) or to go in-house. Attorneys that go in-house are going into a hornet’s nest because there is often incredible career instability. When you are in-house, you are a cost center and will be let go if things get slow. Most of the time, a new CEO or GC will want to bring in their own legal department, and when this happens, you lose your job. Moreover, even some of the most successful companies always have their ups and downs which lead to layoffs, and even going out of business, merging and other things that can affect your job security. In-house positions rarely work out.

Placing Attorneys in Firms

In my profession, I try to place attorneys in law firms. I work with attorneys in all practice areas, in all geographic locations, and making all sorts of salaries. There is a consistent theme with all of the attorneys I represent. With the exception of partners with a self-supporting book of business, almost all law firms—large and small—are most interested in attorneys with 3-5 years of experience. Once you get beyond this, it is very difficult to find a home. There are all sorts of reasons for this that I will not get into (you will work several years before wanting to be a partner, you know what you are doing and can transition into a new firm, and others). However, it is important to understand that being in a firm where you will not have to look for a job when you have more than seven years of experience is crucial. If you are not at a firm where you believe you will be stable at this point in your career, it is very dangerous. This topic relates to having the ability to have access to work—regardless of the stage of your career, it is most important to have access to work.

 

Access to Work and Career Decisions

When you are looking at salary, you need to ask yourself whether or not you will continually have access to work. Does the firm have enough work that you will be able to stay busy? If the firm does not have enough work, they will need to let you go. You need to be in a position where you will always have access to work—not just now, but as you get more senior.

Personal Experience with Firm Transition

When I was a third-year associate, I made the disastrous decision to leave a firm that had tons of work to join one that did not have a lot of work. I was hired to work on a case that the firm thought they were bringing on. A week or two before I started, the firm did not get the work they anticipated. I started work and sat there for a full two weeks without getting a single assignment. Over the next several weeks, I saw the firm let a few partners and associates go because they did not have enough work. As this went on, I realized that the firm had overpriced their services and the amount they charged clients, and there was simply not enough interest. I had left a firm with a lot of work to join one that paid a lot more. This was a horrible career decision, and had I done something different, I might still be practicing law today.

 

The Role of Firm Culture

Another issue to consider when looking at different salaries is the culture of your existing firm and the one you are considering joining. I remember when I was a law student visiting several law firms on callbacks. I went into many different firms and never felt a real cultural connection to many of the attorneys I was meeting—I could sense the culture based on the way the attorneys were interacting with me and each other. Then I went into one firm where I felt a strong cultural connection—I just felt so comfortable around the different attorneys I was meeting. After only a few interviews, I knew I would get an offer because everything clicked. I also knew I would do well because I was interviewing with like-minded people. I received an offer to join the firm as a summer associate and then as an associate—I knew this would happen because I clicked with the people. The year that all this happened, there were 14 summer associates in my class, and only I and one other summer associate received offers.

 

The Importance of Cultural Fit

The culture of a firm and how it makes you feel is an incredibly important component when considering one firm compared to another. A good culture means you will feel connected with the people, believe they will be honest with you, and share interests or ways of looking at the world. When you have this, your work goes much easier. You work with people you believe will have your back.

A Case Study of Firm Culture

One of the most interesting examples of a law firm culture was an attorney I knew, who was also my cousin, who got laid off from Sherman & Sterling in Hong Kong in the early 2000s. He had gotten the position originally because he clicked so well with the people there and the culture of the firm. When the firm laid off a huge number of associates, there was no escape. Despite this, he had a great relationship that almost bordered on friendship with the partners there. One of these partners reached out to him and went out of his way to get him a new position with a client. None of this would have happened were it not for the connection with the firm and its culture that other attorneys did not have. When people like you and you click with the culture, good things happen.

 

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See Related Articles:

• What You Need To Know About Law Firms: The Culture, The Clients, The Compensation, And More
• Salary Wars and Associate Hiring
• Why the Culture of the Law Firm You Are Working for Will Determine How Happy and Successful You Are Practicing Law

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Training and Early Career Considerations

For associates in their first five years of practice, you really should never concern yourself too much with salary. You need to be in a firm that will train you in your practice area. Going to law school is simply not enough. You need to be trained. I always tell associates that their number one concern early in their career needs to be getting trained and that salary is a bonus you get for being trained. It really takes about five years—and around 10,000 hours of work—to understand how to be a good attorney in your practice area.

 

Business Generation and Career Stability

Another factor more important than salary is the ability a given firm gives you to generate business. If you go to a major national law firm, the only business that would be acceptable to them would be if you brought in a major corporation—they would not be interested in smaller clients. Without business, you are never going to have career stability. Different firms, midsized to smaller law firms, may give you a better platform to bring in business. Moreover, certain types of firms may make bringing in business easier than others. Some firms may have no interest in you bringing in business, while others will. For career stability, you may be better off in a firm that does not pay as much but offers you the opportunity for career stability.

 

How to Respond to Salary Requirement Questions

Finally, the big question: What do you say when a law firm asks you your salary requirements?
 

Ideal Response

The best answer to this question is: “I would like to be paid the same amount that others in my class year are being paid.” When you answer the question this way, you tell the firm that you are on their side and do not expect more than they are paying similarly situated candidates. However, if the firm pushes and asks your “requirements,” you are in a bit of a pickle. Here, you can do the following:
 

• Refusing to Answer

First, you can refuse to answer the question and tell the firm you do not want to negotiate against yourself. You can ask the firm what they are paying people at your level and then see how this goes—this strategy creates a cat-and-mouse game that is not always the best way to start at a new firm.
 

• Sharing Current Salary

Second, you can tell the firm what you are making now. If you do this, the firm may be upset and believe you will not want to work for them due to this. However, if you are smart and you know the firm pays less than you are making now, you can tell them something along the lines of, “I do not expect to make this much because there are other factors that are important.”
 

• Stating Salary Expectations

Third, you can tell the firm what you expect to make. This strategy can either go in your favor or not. A substantial portion of the time, the firm may do their best to meet your salary requirements—or create a scenario (based on the number of hours you bill, for example) where you can make the money you are seeking. However, if there is too much disconnect, the firm may walk away.
 

• Negotiating After Receiving an Offer

In my opinion, the very best scenario is for you to do whatever you can to get an offer first—and then negotiate salary later. After a firm has made you an offer, they have indicated their interest in hiring you in the strongest possible terms. As a recruiter, I have the ability to negotiate for candidates after they receive an offer. An additional benefit of getting an offer is that it allows you the opportunity to speak with other attorneys there after the fact to learn about things like the amount of work they have, advancement potential, what happens to attorneys like you a few years on, and other similar questions. With an offer in hand, you can understand whether the firm is truly a place you want to work.
 

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See Related Articles:

• Why Chasing Big Law Salaries Could Be the Worst Career Move for Attorneys
• What Are Your Salary Requirements?
• How to Arrive at Your Salary Expectation
• How Should I Answer Questions about Salary Expectations from a Law Firm?

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Balancing Money and Career Factors

Money gets in the way of a lot of attorneys getting jobs. Money is important and a necessary component of any job, but you always need to understand that there are many other components operating in the background. You may wish to be a soldier of fortune, working for the highest bidder without any concern for the future—perhaps you do not want to work in a law firm forever. Most attorneys are increasingly more concerned with compensation than other factors relevant to their careers—and that’s okay. You should realize, however, that if it is all about money—that’s all you will ever get. Money is one component of a successful career—for many, the most important component—and that is okay.

 

Avoiding Firms with Low Pay and No Opportunities

Finally, there are countless law firms that make their money by paying their associates and non-equity partners as little as they possibly can. I meet with HR directors of firms on an ongoing basis whose pay is so low it has no connection to the realities of the market. Candidate after candidate receives offers that are tens of thousands of dollars less than what others are paying in the market. Obviously, if a firm is just concerned about paying people as little as possible, has no connection with the market, and offers little opportunity, you should avoid these firms. You never want to be taken advantage of, and you need to protect yourself. These firms are dangerous because they want a bunch of low-paid worker bees they can take advantage of. No one needs that, and in these situations, these firms are to be avoided.

 

Protecting Yourself from Exploitation

I’m constantly amazed at how little some firms want to pay, and many of these same firms have no opportunity either. You need to protect yourself from being taken advantage of.

 

 

About Harrison Barnes

No legal recruiter in the United States has placed more attorneys at top law firms across every practice area than Harrison Barnes. His unmatched expertise, industry connections, and proven placement strategies have made him the most influential legal career advisor for attorneys seeking success in Big Law, elite boutiques, mid-sized firms, small firms, firms in the largest and smallest markets, and in over 350 separate practice areas.

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About BCG Attorney Search

BCG Attorney Search matches attorneys and law firms with unparalleled expertise and drive, while achieving results. Known globally for its success in locating and placing attorneys in law firms of all sizes, BCG Attorney Search has placed thousands of attorneys in law firms in thousands of different law firms around the country. Unlike other legal placement firms, BCG Attorney Search brings massive resources of over 150 employees to its placement efforts locating positions and opportunities its competitors simply cannot. Every legal recruiter at BCG Attorney Search is a former successful attorney who attended a top law school, worked in top law firms and brought massive drive and commitment to their work. BCG Attorney Search legal recruiters take your legal career seriously and understand attorneys. For more information, please visit www.BCGSearch.com.