As the New Year approaches, so too does the annual evaluation and review of Partner compensation within many law firms, a period met with a mix of anticipation and apprehension among those within the profession.
Whilst seasoned Partners may feel well equipped to adeptly navigate these negotiations, drawing from their past experiences, new Partners often find this period daunting due to their relatively limited exposure to such processes.
For any Partner looking to achieve a positive outcome in their annual pay review, the ingredients required for these conversations involve a mix of preparation, strategy, and effective communication. Here are some tips to consider:
1. Research and Preparation: Gather information about industry standards, the firm's financial performance, and the current market rates for Partners in similar firms and practice areas. This insight will be crucial in benchmarking your expectations.
2. Highlight Your Contributions: Showcase your achievements, caseload, client introductions, successful cases, or any exceptional contributions you've made to the firm's growth and success. Quantify your impact wherever possible, including for both your individual practice as well as what you have referred to other practice areas/offices within the firm.
3. Present a Clear Proposal: Have a clear proposal outlining your accomplishments, the value you bring, and specific compensation you are looking for. Use concrete examples and metrics to support your case.
4. Bigger Picture: The firm's financial health and the overall economic climate will always be a factor in these conversations, however, keep in mind your personal long-term objectives.
5. Be Realistic: Whilst it is reasonable to aim for an increase based on performance, be realistic with your expectations. Consider your performance in context, not just what you anticipate in the next 12 months or did over the previous 12 months, look back over previous years. Consistency and growth are key to leveraging the best outcome.
6. Anticipate Responses: Be prepared for different responses, including counteroffers or requests for further justification. Have responses ready to address concerns and reinforce the value you bring to the firm. Equally, know where you want to be at the end of these conversations and what’s critical to you financially.
7. Follow-Up and Documentation: After the negotiation, follow up with an email summarising the key points discussed and any agreed-upon terms. Documenting the discussion helps avoid misunderstandings in the future.
8. Maintain Relationships: Regardless of the outcome, maintain positive relationships with decision-makers. There is nearly always a trade-off, but the key is for everyone to walk away feeling that there had been a satisfactory outcome and that they’ve been heard. A constructive approach ensures that relationships remain intact for future discussions.
9. Next steps: Be prepared for every eventuality, knowing your worth and approaching the conversation in good faith can only take you so far. Strategically or financially, firms simply aren’t always able to meet your expectations. Be clear in your mind, on whether you are there for the long run or whether there are issues that are leading to you being underpaid, which can’t or won’t be addressed. If that’s the case, and there is no prospect of that changing, all of your experience will leave you better placed to ensure you realise your worth in the future.
We frequently speak to partners across the legal industry at all stages of their career. So whether the focus is on bonuses, draw, capital contributions or distributions we gain unique insight across the market which is invaluable when benchmarking your comp.
If you would like to receive tailored advice specific to you regarding these types of negotiations, or if you have perhaps exhausted everything you can with respect to your current firm and would like to discuss what other opportunities are available to you and how we can help, please get in touch with Sophie Brown to discuss further.