Got any tips for discussing compensation with an employer?

[Sho'Nuff]

As the thread title implies, I am getting ready to discuss my compensation level with the partners of my law firm. Any of you armchair experts gone through this and have any tips on how to break the ice and instigate/carry out the conversation?

In my circumstance I feel that the partners undercharge clients for my time (i.e., my billable rate is too low for my experience level and efficiency). As my billable rate bears a direct correlation to my salary, I also feel that I am underpaid for my experience level. Specifically, I think the partners should raise my billable rate by $25-30/hour and increase my salary by $25-30k/year. To me this is a win win. Partners make more money off me, and I make a salary consistent with my experience level. Clients won't care because there will be very little difference in their bill (I'm very efficient).

I've given this quite a bit of thought and spent some time gathering facts in support of my upcoming request. Those facts include:

1. Out of all the attorneys in the firm, I bring in the most $$. I am responsible for ~13.5% of gross billings. Next closest attorney is one of the partners, who is responsible for ~10.4% of gross billings.

2. I have achieved #1 despite having a billing rate that is at least $50 lower than all of the other attorneys in the firm of comparable experience.

3. I work completely without supervision and produce excellent work product (recognized by my firm, my clients, and my colleagues).

4. My presence and work product is the direct cause of significant new work being brought into the firm from existing clients (recognized by partners).

5. I train/manage 2 of our 3 junior level attorneys.

6. There are three associate level attorneys at my firm that have billing rates $50 higher than mine. I am (objectively) more skilled and more independent than two of them, and I am on par with the other.

7. Admittedly not a 1:1 comparison, but I was paid roughly the same amount I am now (adjusting for differences in billable hour requirements, etc.) when I worked for a large firm in 2009. At that time my billable rate was $150/hour higher than it is now, and I have 5 more years of experience than I did in 2009.

8. Unlike all other employees at my firm, I do not purchase medical insurance through my firm. Rather, I get it through my wife's work. My firm pays 100% of the cost of an attorney's medical insurance. Which amounts to roughly ~$1100/month benefit. In other words, I am a "cheap" employee.

9. Apart from 1-8, I am not asking for a raise "for nothing." I'm saying that the partners should consider raising my billable rate to account for my skill and experience level, and compensate me accordingly.

10. 2013 stats for the market we are in indicate that the median and mean salaries for an attorney of my skill and experience are ~20-40k higher than my current salary.

11. I am slated to exceed my billed hour requirement this year by ~15%. This, in combination with #1 and #8 indicate that I am basically a money tree for my firm.

I'm sure I could come up with others, but those are what come to mind at the moment.

Thoughts?

update I talked with one of the partners in my firm about the raise. Basically told him that I think the firm was charging too little for my time, and that they could raise my billable rate by X% without a meaningful impact on clients. I suggested that the partnership consider doing that and, in exchange, give me a X% raise.

It took a little while (mainly because the partners got waylaid with tax issues this year resulting from the expiration of Bush era tax cuts), but I got the good news yesterday. The partners agreed with my suggestion. Apparently making business sense works when asking one's employer for a raise. It also helped that I was the highest grossing associate in the firm last fiscal year, despite having a significantly lower billable rate than all of the other associates.

cliffs
OP feels he is underpaid by about 25-30k/year.
OP wants partners to charge more for his time and compensate him accordingly.
OP is looking for tips on how to initiate and conduct the discussion.
update
OP spoke to partners about raise - X% increase in billable rate for X% increase in salary
Partners mulled it over and gave OP what he asked for.
Profit

 

[drebo]

Whipping it out usually breaks the ice pretty well.

Seriously, though, I wouldn't bother bringing up the "competition," the market, or previous jobs. Stick to your performance at your current firm. Don't drop too many facts and don't, whatever you do, compare yourself to your colleagues to the partners.

If you drop too many hard numbers, the partners may think that you're trying to undermine them and may take offense at not having those same numbers ready.

If you compare yourself to colleagues, they will find you arrogant, even if everything you say is true.

 

[KlokWyze]

what drebo said... especially with a stuffy environment like that. I couldn't do it no matter what I got paid.

it sounds like you have all the facts you need. it's all about your personality and delivery. if you're a "nice guy" then you will have to be all sensitive, poltical and shit. if you're kind of an asshole, but you're professional and do your job (sounds like), then you can just be like "look. these are the numbers. please give me something reasonable or fuck off."

I make much less than you I'm sure. I do IT, but the latter is how I always get more money.

 

[Sho'Nuff]

OK, so your suggestion is that I keep it simple to start? Something like this?

"Partner so and so . . . review time is coming up. You have repeatedly said that my work is great, etc. . . so I would like you to keep that in mind when you are considering raises this year. In particularly, I would like you to consider raising my billing rate by 25-30/hour, and compensating me accordingly. I think that would be a win win. You make more money, I make more money, everyone is happy."

FWIW I do not work in a stuffy environment at all. It is actually very low key relative to 99.99999999% of all law firms out there.

 

[mikeford]

First look for another job, maybe even do a couple interviews. Otherwise you are going in cold with nothing but risk.

Maybe your firm feels they have a need for someone in your dollar range as a fit to client base?

Are you flooded with work vs the others who charge more?

 

[OVerLoRDI]

Keep it simple. Highlight your success here, especially with the numbers you mentioned above. Then ask.

If they don't give you what you want, start looking around. If you are as good as you say, you shouldn't struggle to find another job that will pay you what you deserve.

 

[MongGrel]

I sure as fuck can't as I had gotten up to the 80K range finally a few years ago and am still below half that at the moment as for some reason Tool & Diemakers have gotten kicked to the curb these days.

I'm about to leave the place I am, was even trying to find anything at all awhile.

I feel like I work for peanuts everyday, but it was even worse than that last year, I;m not eve going into some of those horror stories.

Yeah do what ya have too sometimes, but GL with the payraise.

 

[DigDog]

not a win win actually.

having someone who is efficient but can be sold out for little money allows them to draw more customers and therefore a bigger market share. rising prices means less market share thus less value of the firm, all because you want to be paid fairly (huehueheuuheuhe lol)

go for it. they will probably say no, or offer you half that.

 

[lxskllr]

I don't understand. If you're a partner, you're a peer amongst equals. right? Firmly tell them what you require for compensation. If you haven't misjudged your value, you'll get it.

 

[jaedaliu]

If all things were equal, just the fact you produce the most billing should entitle you to the largest paycheck.

If your job is anything like Suits, the TV show, Someone's going to threaten you tomorrow, punch you in the face next week, and you're going to end up hooking up with the hot paralegal in the records room.

Sorry, no constructive advice, other than that your stats say that your clients will think you're worth it, and that I hope you don't have a non-compete in your contract. (for leverage if they balk)

My initial impression was that you're a partner. But upon further review, you never say that, so I guess you aren't?

Are you interested in being a partner? Should figure out how to fast track that so everyone gets more money.

 

[IndyColtsFan]

First look for another job, maybe even do a couple interviews. Otherwise you are going in cold with nothing but risk.

I'd have to agree.

Let me tell you about my compensation discussion story. I don't have much experience with discussing potential raises with management, but I did have a discussion with the CIO at my last job. I was very underpaid for my experience and skillset (like the OP, $25K-$30K) and had been turned down for a promotion to someone clearly less qualified and capable. I could've legitimately gone to HR and complained and had the data to back me up, but instead, I figured I was probably leaving anyway so I decided I had nothing to lose by asking for a raise. This place had world class benefits and tried to use that to "prove" to employees that they were well compensated but conveniently, execs were all paid market value or above and had those same benefits. Imagine that!

Anyway, I went in to his office, registered my objection to the whole promotion fiasco, laid out how I was more qualified, and then, while shell-shocked (I was very direct, firm, and to the point and left little doubt in his mind I was serious), he asked if a raise would keep me. Of course, I knew what was going to happen -- they wouldn't give me a raise but would dangle a "if you do x, y, and z, we'll put you in for a bigger raise next year." Regardless, I told him that I was under compensated and he needed to investigate a raise for me and I'd follow up in a week.

Sure enough (or should I say, Sho'Nuff), he called me into his office 2 days later with their "offer." The offer was exactly what I predicted -- if you do x, y, and z, we'll give you a bigger raise next year. I knew their definition of "bigger" raise would be $5K at most, so I told him that would work, thanked him, and then left and had 3 job offers within 2 weeks. There was no point in additional discussion or negotiation at that point.

For the tl;dr crowd, the moral of the story is this -- be prepared to back up your request by any means necessary, including leaving. I'd make the request and if they tell you no, find another job and leave.

 

[Sho'Nuff]

First look for another job, maybe even do a couple interviews. Otherwise you are going in cold with nothing but risk.

Maybe your firm feels they have a need for someone in your dollar range as a fit to client base?

Are you flooded with work vs the others who charge more?

I have no plans to go anywhere else, and will not go anywhere else even if my request is denied. I like who I work with and where I live too much to leave. The partners know that, but I do not think they will use that as a basis to deny my request, particularly when I am asking them to increase my salary based on a corresponding increase in billable rate.

As for needing someone at my billable rate, we have cost caps in place for many of our clients so there are no "runaway" bills. That works well in a highly transactional practice, like my own. As a result, an increase in billable rate just puts pressure on me to get things done more quickly and with the same level of quality. Something I have demonstrated repeatedly that I am capable of doing.

Also - everyone in my firm is flooded with work. We have been trying to hire 2 new attorneys for the past two years to relieve some of the pressure, but we have not been able to find anyone yet. At least not anyone that is already trained.

 

[Sho'Nuff]

Keep it simple. Highlight your success here, especially with the numbers you mentioned above. Then ask.

If they don't give you what you want, start looking around. If you are as good as you say, you shouldn't struggle to find another job that will pay you what you deserve.

I have no doubt that I could find a job somewhere else in short order. I get called by internal law firm recruiters all the time, and I always tell them I am not interested because I am happy where I am. FWIW if I was willing to move to Boston I could be paid ~50% more than what I am paid now. Heck, when I was working in Boston 5 years ago I was paid ~25% more than I am now.

 

[Sho'Nuff]

not a win win actually.

having someone who is efficient but can be sold out for little money allows them to draw more customers and therefore a bigger market share. rising prices means less market share thus less value of the firm, all because you want to be paid fairly (huehueheuuheuhe lol)

go for it. they will probably say no, or offer you half that.

It is a win win when you consider that many of our clients are billed on a fixed fee basis. All the increase in billable rate does in that situation is put increase pressure on the attorney to produce.

 

[Sho'Nuff]

I don't understand. If you're a partner, you're a peer amongst equals. right? Firmly tell them what you require for compensation. If you haven't misjudged your value, you'll get it.

I am not a partner. I am a senior associate. My billings are the highest in the firm, but my origination is too low for partnership at the moment.

 

[Sho'Nuff]

If all things were equal, just the fact you produce the most billing should entitle you to the largest paycheck.

If your job is anything like Suits, the TV show, Someone's going to threaten you tomorrow, punch you in the face next week, and you're going to end up hooking up with the hot paralegal in the records room.

Sorry, no constructive advice, other than that your stats say that your clients will think you're worth it, and that I hope you don't have a non-compete in your contract. (for leverage if they balk)

My initial impression was that you're a partner. But upon further review, you never say that, so I guess you aren't?

Are you interested in being a partner? Should figure out how to fast track that so everyone gets more money.

My firm and job bears zero relation to "Suits." In fact, most TV shows focusing on the legal profession are so wildly inaccurate that it is hard for me to even watch them. Law and Order is one of the worst offenders, and it is based on the lackluster world of criminal prosecution.

I am an at will employee. No employment contract. And if I had an employment contract, I would never sign it if it included a non-compete. Not that it would matter if there WAS one in the contract, as non-competes are almost always unenforceable in my state.

I never said I am a partner because I am not a partner. I am one of four senior associates in the firm. I came to the firm ~4 years ago, but previously worked at other firms, for a corporation, and for the government. All of the other senior associates (who are more highly compensated) have worked at the firm since they came out of law school.

When I first came to the firm the partners did not know what I was capable of doing, so they started me out at a relatively low salary. Which at the time I was happy to have because the company I was working for was going down in flames. Now I have established that I am probably the best prep and pros associate in the firm, and so I want them to rethink my compensation level.

I am interested in eventually becoming a partner. The threshold for partnership consideration is that I need to bring in X amount of originated billings. I.e., billings from clients I brought into the firm. Right now my billings are the highest, but my origination is about 0.5X (which happens to be the highest amongst non-partner attorneys in my firm as well). I am planning to work on client development very hard over the next few years.

 

[Sho'Nuff]

For the tl;dr crowd, the moral of the story is this -- be prepared to back up your request by any means necessary, including leaving. I'd make the request and if they tell you no, find another job and leave.

Thanks for sharing your story. If I was working at a large law firm or in a corp like I used to, I think it would be a great example. But I work for a firm that is a bit of a "different" animal. The atmosphere is very relaxed. Partners are all nice. We hang out together after work, etc. I consider pretty much everyone in the Office to be both a colleague AND a friend, and I suspect the partners do as well so long as you do not screw up and jeopardize the firm. Everyone respects each other both personally and professionally. Like I said, my firm is a bit different than most.

With that in mind, I think I have a reasonable chance of having a professional discussion with the partners about my compensation, and asking for a raise. Even if they say no, I would not leave. At least not for another law firm position. But I would expect them to give me an explanation as to why I they feel I am not worth the additional money, given my experience/skill level and what the firm is paying other senior associates of comparable (and perhaps less) skill.

In sum, would I be miffed if I did not get at least some of the raise I will ask for? Sure! Will I leave? Probably not. Do I think that matters to the partners? I would like to think not, but who knows. They are running a business after all.

 

[IndyColtsFan]

Thanks for sharing your story. If I was working at a large law firm or in a corp like I used to, I think it would be a great example. But I work for a firm that is a bit of a "different" animal. The atmosphere is very relaxed. Partners are all nice. We hang out together after work, etc. I consider pretty much everyone in the Office to be both a colleague AND a friend, and I suspect the partners do as well so long as you do not screw up and jeopardize the firm. Everyone respects each other both personally and professionally. Like I said, my firm is a bit different than most.

With that in mind, I think I have a reasonable chance of having a professional discussion with the partners about my compensation, and asking for a raise. Even if they say no, I would not leave. At least not for another law firm position. But I would expect them to give me an explanation as to why I they feel I am not worth the additional money, given my experience/skill level and what the firm is paying other senior associates of comparable (and perhaps less) skill.

In sum, would I be miffed if I did not get at least some of the raise I will ask for? Sure! Will I leave? Probably not. Do I think that matters to the partners? I would like to think not, but who knows. They are running a business after all.

Yeah, I think that being in a smaller firm gives you an advantage and the fact you're coupling your compensation increase with an increase in your billing rate will probably work out well for you.

 

[Sho'Nuff]

Yeah, I think that being in a smaller firm gives you an advantage and the fact you're coupling your compensation increase with an increase in your billing rate will probably work out well for you.

Agreed. As an update, I spoke to one of the partners today and made my request. He was very enthusiastic and thought it would be possible, particularly as I was merely proposing to leverage my efficiency.

 

[Tweak155]

If I felt I was being underpaid by $25-$30k I'd make it very clear and have expectations in place for the compensation to be met (I.E I need to see the change in 2 months or whatever I felt was fair).

If the date came and went I'd move on.

Only way you can fail in this situation is if you misjudged your value. Then you learn a lesson and go from there.

 

[smackababy]

Agreed. As an update, I spoke to one of the partners today and made my request. He was very enthusiastic and thought it would be possible, particularly as I was merely proposing to leverage my efficiency.

It seems like you already made the request, but I was going to suggest using the increase in billing rate to your advantage. While it would give you an increase in pay, it should give them an increase in profits. I couldn't imagine that every dollar they bill isn't more profitable to them than it is to you.

 

[jaedaliu]

It seems like you already made the request, but I was going to suggest using the increase in billing rate to your advantage. While it would give you an increase in pay, it should give them an increase in profits. I couldn't imagine that every dollar they bill isn't more profitable to them than it is to you.

He said that in the OP. $25-30/hour increase in billed rate is a $50k-60k revenue increase on a 40 hour/week schedule. OP is asking for 1/2 that. 1/2 for him, 1/2 for the partners.

Sounds like OP has a good direction.

 

[Dr. Detroit]

Generally speaking - Firm's hand out large bonuses based on all sorts of metrics.

How big was your bonus? Did that make up for the stellar year you had in billings?

If not, then yes, talk to them about increasing your base. Did they already give you a raise for this year, if not - any idea what the standard raise is per year?

Sounds like you are on solid footing so I think its a good conversation to have as they wont take it as an ultimatum.

 

[Sho'Nuff]

Generally speaking - Firm's hand out large bonuses based on all sorts of metrics.



How big was your bonus? Did that make up for the stellar year you had in billings?



If not, then yes, talk to them about increasing your base. Did they already give you a raise for this year, if not - any idea what the standard raise is per year?



Sounds like you are on solid footing so I think its a good conversation to have as they wont take it as an ultimatum.

Bonus this year should be around 40k.

I made it clear when I spoke with the partners that my request was not an ultimatum and that I was not going anywhere even if they said no. I made my case based on my impression that it seems like good business sense.

 

[Phoenix86]

It's almost always a good idea to let them make the first move. It's review time, so let them start. How soon is your review?

Otherwise, go in armed with the information you have on hand. Sounds like you know what's reasonable for your level of output.