Salary Negotiations 101

Vol. 41 No. 9

Carla J. DeVelder, a former law school associate dean with experience in student affairs and career development, is in-house counsel in the insurance industry in Omaha, Nebraska.

Rule #1: Know Why You Are Negotiating

Engaging in salary negotiations simply to conform to preconceived salary expectations or to gain a slight salary increase is needless and may jeopardize an offer of employment. Knowing whether negotiations are warranted takes factual investigation and self-awareness. Some of the right reasons to engage in salary negotiations are:

your skills and experience support a demand for more than what is offered;

the pay range for the position is lower than the industry average; or

you have multiple offers with similar salary and benefits packages.

Rule #2: Know Your Market

If you decide to engage in salary negotiations, it is imperative that you research compensation levels for your prospective employer, its competitors, and your geographical market.

In the legal profession, lockstep compensation often negates any need for or attempt to negotiate salary as the pay scale is the same for everyone in the “class,” regardless of the background, experience, or ability. However, as firms move away from lockstep into more merit-based systems of compensation and to the extent that smaller and mid-size firms may not engage in lockstep, applicants must arm themselves with as much information as they can find. Start with your career services office. Ask them if they have any salary data as it relates to the employer as well as the geographical area. Ask for similar data for the employer’s competitors. Review the annual NALP Associate Salary Survey that takes a comprehensive look at associate salaries nationwide by class year (including summer associates), by city and/or state, by region, and by firm size where sufficient data is available. Comparisons of law firm compensation and bonus structures are also included. Seek the same information informally from your networking contacts and from friends at other firms. If you are interviewing with a company, check out websites such as PayScale and Vault, which offer average salaries for thousands of positions. In addition, PayScale and other similar sites allow users to enter specific information such as geography, experience level, certifications, and whether the job is with a nonprofit, government, a small business, or a large company. Don’t rely exclusively on any one source but, instead, gather as much information as possible to get a better, overall perspective.

Rule #3: Know Your Worth

Self-awareness goes a long way in job searching. A lack of self-awareness can result in wasted time and energy in applying for positions for which one is clearly not qualified, overstating accomplishments in interviews or in bungling salary negotiations. A realistic assessment of one’s skills and market value is a key asset in a successful job search.

First, figure out what you need in a salary. Forget about what you want for a minute and create a budget to determine the annual salary you actually require. Be sure to include all expenses so that you are creating a realistic salary threshold.

Next, review your market research. How does your threshold compare with your potential employer’s starting salaries or the going rate in your city?

Finally, honestly assess your skills, education, experience, and any unique value you bring to the prospective employer. What do you have to offer that merits an increase in the salary offered or supports the salary you are seeking? Frankly, this step can be difficult, especially for law students who don’t have specialized experience or particularized skills to showcase. Tapping into your network and your resources can be extremely helpful in this step. Talk to your mentors, professors, and industry insiders to find out what you can emphasize to show that you are the most qualified candidate for the position but also what unique qualifications you have that might merit a higher salary.

Rule #4: Know When to Discuss

Until there is an offer on the table, focus on selling your skills and experience and avoid discussing salary expectations if at all possible. An offer means you have been identified as the best, most qualified applicant and the employer wants you. This strengthens your bargaining power. If you haven’t received an offer, engaging in salary negotiations too early creates the risk that you might price yourself out of the position or that your low salary requirement may lead the employer to suspect that you do not have an understanding of what the position entails or the skills necessary to demand a fair market salary.

If the employer wants to discuss salary prior to making an offer, your best tactic is to deflect the attempt to disclose a hard figure and, instead, discuss compensation in a general manner. For example, consider the following response: “Salary is certainly important to me but it is not the most important factor. I’m confident that if we both agree that this is a good fit, we can reach an agreement on compensation.”

If pressed, offer a salary range that is based on your salary threshold on one end and market rates combined with your unique skills on the other. That response may sound like: “I understand the current market value for an associate at this level is in the $50,000 to $70,000 range.”

If you are employed with another firm or company, the employer may ask you to reveal your current salary. While a bit awkward, this can be your opportunity to set the stage for setting your threshold with the prospective employer: “My current compensation package is $45,000 which is approximately $5,000 below market value. That is one of the reasons I’m looking for new opportunities.”

Effective negotiation is much easier when the employer presents a salary in conjunction with an offer. This allows you to consider the entire package, including everything from position and salary to culture, commute, increased responsibility, benefits, and so on.

Rule #5: Know Your Options

Fixating exclusively on salary is limiting. Think of the full compensation package and recognize that you may have other options to negotiate. These include: bonuses, salary reviews, insurance packages, retirement or pension plans, overtime policies, profit-sharing plans, vacation and sick days, tuition reimbursement, company car/expense accounts, relocation/moving expenses, professional memberships, and sign-on bonuses. Of course, the position and the company will dictate what is offered and what you can negotiate. Inquire about the specific benefits included in your offer to see what options are available so that you can make suggestions that might make the salary more appealing. For example, you may negotiate the timing of your performance evaluation with the agreement that a salary increase will be considered at that time. Instead of receiving your first review at one year, you may negotiate to be evaluated in six months, giving you time to impress your new employer and justify a raise.

Rule #6: Negotiate in a Respectful, Reasonable Manner

Of course, remaining professional, respectful, and committed to pursuing a mutually acceptable agreement throughout negotiations is critical. Presumably you want the position and the employer wants to hire you so negotiations do not need to be adversarial. Staying gracious and reasonable improves your negotiation stance and maintains the relationship—which is important whether you end up working there or not. Make sure you are not belittling the offer or offending the employer. You might say, “Based on my research on associate salaries at this level and the five years of experience I bring to the position, I believe your offer is on the conservative side.” Be prepared to share your research and articulate your basis for your counteroffer. Remain confident, not arrogant, and be honest with the employer. Even if you are not successful in negotiating a higher salary, you may wind up with a great job and a satisfying compensation package.

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