Legal professionals transitioning from military or government service to civilian employment will have to consider what they want and what they need in a compensation package. In the military, the process is easy - you get paid a specific salary depending on your military rank and years of service. For major benefits, you get access to medical care, receive retirement pay if you serve 20 years, contribute to a thrift savings plan if you want, and get reimbursed for most of the expenses associated with moving between assignments. However, the terms of your salary and benefits are nonnegotiable. When considering civilian employment, including federal civilian positions, the process is much different. There is often room for negotiation on a variety of issues, including compensation, paid time off, healthcare, and retirement. Before you start the process of negotiating for or accepting a new position, be sure to assess whether you are obtaining the best compensation and benefits package for you and your family.
Your specific salary in a potential new job is obviously important, but it is not the only item to consider - you need to examine your entire compensation package which includes both your pay and other benefits. Knowing how to evaluate or compare civilian compensation packages to each other or to your government benefits is not easy, but the information below contains some of the potential components involved that may help you decide what questions to ask during the negotiation process. This information may not answer all your questions, but it should highlight areas to explore to help you prepare for your financial future. Remember, the more information you have before engaging in salary and benefit negotiations with potential employers, the better prepared you will be to consider any reasonable employment offers and to intelligently discuss and meet your compensation needs.
Federal Civilian Positions
Just as in the military, the salary for federal civilian positions is generally decided by the grade at which you are hired and your years of service in that grade. The difference is you can enter federal civilian service at a higher pay grade if you have the requisite qualifications. You can also negotiate your actual salary amount within that grade or within a pay band based on your experience. You do not have to start at an entry level position. Once you accept a position at a certain grade and salary, however, you may have to work for a specific amount of time before you become eligible for pay raises or selection for a higher-level position.
In addition to negotiating aspects of your salary, you may also have input into the rate at which you earn vacation or administrative time off. Some federal agencies allow you to earn time off at a faster rate if you have combat or hazardous duty time in your military record or if you served in certain theaters of operations. Specific details regarding these leave benefits can vary by agency or position so this is research you should do for any federal position you are considering before accepting a position. Once you start working, you often cannot go back to apply for an increased leave benefit.
If you have military service, but not enough to retire from the military, you should be able to apply your military years towards your federal service for retirement purposes. If you retire from the National Guard, you may also be able to apply some of your military service to buy time towards a federal retirement. Details regarding the relationship between military service and federal civilian retirement benefits including service credit, pensions, thrift savings plan investment and transferability, and timeframes for vesting and earning retirement benefits for federal civilian employees are all issues that interested applicants should investigate. Websites you may find helpful to your research include:
Federal Employees Retirement System (www.opm.gov/retirement-services/fers-information/)
Military Service Credit for Federal Civilian Retirement Information (www.thebalance.com/military-service-credit-for-federal-civilian-retirement-3331981)
Fedweek: Combining Military and Civilian Service (www.fedweek.com/retirement-financial-planning/combining-military-and-civilian-service/)
Nonfederal Civilian Positions
Salary and benefits negotiations for civilian legal positions outside the government are not as structured or restrictive as those inside the government. Salary and benefits options vary from employer to employer and from state to state. While some of the more major benefits listed below may be raised by a potential employer during the negotiation process, you may also be interested in seeing some of the additional benefits you may encounter. Try to have a written offer in hand when negotiating for any compensation package so you have a better idea of what questions to raise and can focus on the pieces most important to you.
The following list of options is not exhaustive and it is not a list of all the benefits you should to expect to receive. It is intended to show you the diversity of benefits available outside the government and to help you identify what may be possible.
During your job search, you must know the amount of salary you think you need to take care of yourself and your family. You should also try to know about comparable salary data available for the position you are considering in a specific geographic area. Where do you find that salary data? First check if there are any resources available at a nearby installation transition office. You can also explore some of the following websites for more information:
- Bureau of Labor Statistics Office of Occupational Statistics and Employment Projections (www.bls.gov)
The Compensation Report available through Association TRENDS (www.associationtrends.com/special/finance)
Stock or Bonus Potential
Besides a salary, some employers may offer a signing bonus, annual bonus, incentive pay, or stock option opportunities as part of your compensation package. If these are options for a position you are seeking, you should consider asking about the criteria for earning this benefit (e.g., performance metrics, productivity standards, frequency of availability, timeframes for accomplishment, etc.). More information about these benefits or the tax consequences of them can be found at:
The 401(k) plan offered by many civilian employers is like the Thrift Savings Plan (TSP) offered by the federal government. Employer contribution amounts and employee eligibility may differ. Legal professionals leaving military or government employment for other legal positions may need to consider a new employer's retirement benefits from two perspectives. First, will you participate in a new employer's 401(k) or retirement plan and, if so, how much will your new employer contribute or match to your contributions? Second, what do you do with any TSP or 401(k) assets you already have? Options may include leaving your assets in an existing TSP account, or rolling them into a new employer's 401(k) or retirement plan. Deciding the best option for your scenario will take research and preparation. Following are some websites that may be helpful:
- IRS: Choosing a 401K plan (www.irs.gov/retirement-plans/401k-plans)
- Thrift Savings Plan Publications on Transfers and Rollovers (www.tsp.gov)
- The Military Wallet: What Should You Do with your TSP When You Leave the Service? (themilitarywallet.com)
- Wall Street Journal Personal Finance (guides.wsj.com/personal-finance/retirement/)
- Individuals aged 50 or older may make "catch-up" contributions of up to $6,000 (amount subject to change after 2017) (www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions)
Healthcare benefits may also be a priority for you when considering new positions in in the legal community. If so, be aware that a potential new employer may have multiple options for healthcare plans. Some options include a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). Vision and/or dental plans may be available separately. Each plan will have different coverage limits and employer subsidy amounts. Understanding what your potential costs are for you and your family for each option will help you compare available plans. Also, since the rules and availability of healthcare benefits continue to develop, below are some resources you may find useful to help decide what questions to ask the benefits manager or human resource representative during benefit discussions:
Paid Time Off
Most civilian employers offer paid time off. Details may vary between employers and positions though. Understanding how much time off you can earn is one part of the equation. Here are some other underlying points to consider:
- What kind(s) of paid time off can you expect? Some employers may consolidate vacation, administrative, and sick leave as simply paid time off or they may have separate policies for each.
- How does corporate culture and seasonal demands affect time off?
- Are unused vacation days forfeited if not used by a certain date or can they be rolled over to the next period or cashed out?
- Are accrued, unused vacation or administrative leave days paid out when you end your employment?
The items listed above are the major benefits offered by most employees and included in compensation packages. Other benefits you might see are listed below, but only you can decide if there are important enough for you to raise during initial compensation discussions:
- Transportation (moving expenses to relocate)
- Transportation (Commuter/Parking): These may be pretax benefits, subsidies, or a paid benefit may have tax implications.
- Maternity/Paternity/Family Leave
- Tuition Assistance or student debt repayment
- Life and/or disability insurance
- Childcare and/or Elder Care Services
- Legal Services Plans
- Gym membership
Remember, preparing for your compensation package in advance will help you ensure you understand your options, focus your negotiation efforts, and hopefully get the package you ultimately need to take care of your financial future. Good luck, and enjoy your new job!