November 14, 2011 Articles

Writing and Using the Effective "I Love Me" Memo

The author offers 10 steps to take to better negotiate the salary you deserve.

By Nan E. Joesten

Few of us enjoy the process of negotiating our salary or justifying our professional existence, but only an ostrich or someone of independent means can afford to stick their head in the sand and ignore the realities of what it takes to get paid for what you are worth. The facts surrounding the compensation of women attorneys are generally grim. In the National Association of Women Lawyers’ fifth annual survey on the retention and promotion of women in law firms last year, of women attorneys in AmLaw 200 firms, female law firm associates had no noticeable income gap compared to their male counterparts, but at every higher level, the gap widens, and in 2010, women equity partners earned only 85 percent of the compensation of their male partners. Similarly, the 2010 report from the Project for Attorney Retention (PAR) and Minority Corporate Counsel Association (MCCA) on the impact of law firm compensation systems on women was blunt in its assessment: Less than half of women equity partners, and only about one-third of either income or diverse partners, are satisfied with their compensation systems. While these results focus on BigLaw, they are confirmed more broadly by a recent Census Bureau report revealing that the median income of women lawyers is only 70 percent of male lawyers’ income, and the gap between male and female equity partners adds up to a whopping $66,000 annually. For income partners, where rainmaking might not be such a factor, women still earn $25,000 less.

While we should be pushing for best practices in compensation—such as having objective criteria—here are 10 steps to take in the meantime to better negotiate the salary you deserve.

1. Understand the Reward System Or, as one of Steven Covey’s seven habits suggests, begin with the end in mind. What does your organization reward? Dig beneath what is paid lip service, and find out what really matters the most. For more junior attorneys, the expected competencies are often set forth in writing and hinge on growing your technical competence as a lawyer, expanding the depth of your knowledge in your chosen focus areas, and delivering excellent client service. As you become more senior in private practice, technical competence becomes a given, and the name of the game shifts to client origination, revenue collected, and hours billed. As more organizations recognize the need for long-term investments in their infrastructure by incentivizing teamwork and better managing and developing talent, these factors are shifting. Understand what matters to your organization, and you’ll be well on your way to crafting a persuasive argument to justify your compensation.

2. Start Early Most law firms adjust compensation annually, shortly after the beginning of a new calendar year. You know this process is underway by the pained look on partners’ faces, the numerous meetings behind closed office doors, and the general lack of spring in the step of the managing partner. For some associates, performance reviews (which are tied to whether an associate will advance lockstep with his or her class into the next salary level) occur twice a year. Do not let these events sneak up on you. Spend sufficient time in advance preparing for your meeting(s) to discuss your accomplishments so that you are ready when the time comes.

3. Keep a File Preparing the written record of your contributions to your organization’s success is greatly simplified when you keep a file of any emails, letters, voice mails, or other laudatory praise of your efforts or recognition of your success. If a client calls and leaves an appreciative message on your voice mail, file away the WAV file, or transcribe it and drop it into your performance review file. Likewise, do the same with transcripts from oral argument if the judge happens to praise your written or oral advocacy. Without a reminder in a file, you’ll spend unnecessary time trying to remember the recognition you received six months ago.

Along with positive feedback, you also want an easy system for keeping track of what you’ve done during the year and not just the results you’ve achieved in your cases. What were your business development accomplishments? If you’re a partner, you’re already experiencing the pressure to bring in new client matters, and you should be very clear about your role in any new business that has come into the firm as a result of your involvement or the efforts you’re making to plant seeds that will result in long-term business generation. The PAR/MCCA report makes reference to the sometimes bruising exchanges that can occur when partners clash over origination credits, and the more you can document the contributions you’ve made to landing more work, the easier those negotiations will be. Whether or not new business resulted, claim credit for the number of pitches you participated in, and, if work resulted from it, how much of that work you are doing. Too many women report being added to pitches as “window dressing,” only to find out once the work is in the door that little or none of it is coming to them. While that’s a topic for a different article, the least you can do is make sure you get credit for having helped originate that work in the first place.

Your file should also track your investment in what my firm calls “the life of the firm.” Are you involved in internal committees? Do you offer in-house CLE training to new attorneys in your group? Do you interview prospective new attorneys or law students? Mentor others? These actions sustain a firm and are harder to measure because they don’t break down easily into objective numbers like billable hours, collections, or originations, but you shouldn’t overlook them.

4. Quantify Your Contributions Know your numbers. If you’re in private practice, are you a profitable lawyer? How many hours did you bill, and at what rate, in the past year? Do you know how much of your work was (1) billed to and (2) paid by the client? Every private practice attorney should know and understand these numbers. Ask the partners who bill out your time if your work is being written off or if the client hasn’t paid. If you are subject to large write-offs, find out why. If you’re the partner, how are your collections? Are you a responsible firm citizen who follows up regularly with clients who are behind in their bills? If you’re in a commercial law firm, are you doing mostly pro bono work, and, if so, how will that impact your compensation?

How much of your time did you devote to your law practice in the last year, including your client work, non-billable business development work, continuing education, mentoring, recruiting, and everything else? Keep track of this time so that you can (1) manage this valuable resource and allocate it to the highest purpose possible, and (2) get credit for what you’ve done.

5. Did You Start Any New Initiatives at Your Office? This is your chance to toot your own horn. Perhaps you recruited some peers to form an internal support group for your business development efforts, helping each other brainstorm ways to expand your referral base, suggesting speaking forums, or facilitating networking. Take credit for your ideas, even prior to your annual review, by letting others know about what you’re doing. Consider forwarding emails as an “FYI” that shows key allies what you’ve started and how it’s going. It won’t immediately show up in your hard numbers, so find other ways to tell people about your creative leadership.

6. Take It Seriously It’s a safe bet that no one cares more about your financial interests than you and that many of your colleagues will care much more about their situation than they care about yours. There are plenty of anecdotes from the few women who’ve led large law departments and AmLaw 100 law firms about the well-worn path their male partners walked to their door, eager to discuss their compensation. Noticeably absent were their women colleagues. You don’t have to make yourself a pain to your management, but neither should you be a doormat and fail to advocate on your own behalf. No one else is doing it for you.

7. Align Your Business Plan to the Reward Structure Once you know what really matters, make sure you are focusing on precisely that. According to the PAR/MCCA study, law firm compensation models rely heavily on billable hours, business origination, and collections. Of course, nearly every law firm consultant will point out that these are very short-term results that don’t necessarily sustain the long-term health of the firm, which is why teamwork, leadership, mentoring, and other softer skills are needed as well. Women have historically struggled to avoid being sucked into leadership of their organization’s diversity committees, women’s initiatives, or hiring committees out of recognition that it would not be compensated. That may be slowly changing, but in the meantime, each attorney must decide where to devote his or her hours every day. Make your choice knowingly in light of your firm’s reward structure.

8. Write Your Memo You’ve established the criteria against which you’re measured, created a plan for achieving your goals, and worked your plan. You have the facts that demonstrate your progress, so now put pen to paper and bring your year to life. For associates, this is often the opportunity to write a formal self-assessment as part of your review, and for partners, to justify a move to the next partnership tier, or during the recent tough economy, to stave off a downward move, or even de-equitization. Match up your memo to the reward system of hours (including efficiency and write-offs), origination, and collections, demonstrating your immediate acknowledgment that revenue-generating client work is what keeps the doors open, and consider using bullet points for your other major contributions, such as client pitches, new business, client service, key case results, internal firm leadership, external community leadership, honors, and awards.

One word of caution here: Don’t hurt your credibility by over-claiming credit. At one firm where each partner’s “I Love Me” memos were posted internally for all the other partners to review and comment on, origination of the same matters were claimed by multiple partners across several different clients. It’s clear these folks weren’t playing nicely together in the sandbox, and the overreaching for credit diminished them all in the eyes of their partners. Speak your truth, but don’t go overboard.

9. Share Your Draft Memo with a Trusted Advisor You don’t need to be the lone ranger on this project, especially if you’re new to the process. Make discreet inquiries among your mentors to see if they’d be willing to read your memo and give you their reaction. If you don’t feel comfortable asking someone in your own organization, consider approaching a close friend from law school, or, just perhaps, the Woman Advocate Committee, who can read your memo with a critical, but supportive, view. You don’t know what you don’t know, and you won’t find out unless you ask. Redact out any confidential information as necessary, and ask for unvarnished opinions on the memo’s tone, content, and style. You can choose whether to accept or reject any feedback you get, but this is your chance to make any final adjustments as appropriate.

10. Submit Your Memo and Go to Your Meeting Your memo is perfectly polished, and you’ve done your homework, so it’s time to turn in your memo to your compensation committee or management team and sit down to negotiate with yourself as your client. If you struggle in this kind of meeting, think of yourself as zealously advocating for your client, only this time, you are your client. Prepare for this meeting as you would plan for a negotiation on behalf of your client. Know your (client’s) goals, anchor position, and how you might handle hypothetical objections or new information that you learn in the course of the meeting.

Once it’s over, it’s time to celebrate your success. By taking a deliberate approach and putting your best well-shod and even better educated foot forward, you’ve improved the odds that you’ll be rewarded commensurate with your value to your organization. Congratulations!

Keywords: NAWL, National Association of Women Lawyers, retention, promotion, income gap, PAR, MCCA