December 12, 2014 Practice Points

What Women Need to Know about Negotiating Compensation

By Ariel E. Harris recently posted an article with tips from the ABA Gender Equity Task Force entitled, “What Women Need to Know about Negotiating Compensation.” The article suggests several useful tools to assist in negotiating for better compensation. 

First, you must understand that there are official and unofficial rules of the compensation process. Law firm compensation systems vary widely, and “the rules that matter are not all written in the formal procedures.” The basic information you must know about any law firm’s compensation process include the following:

•Determine who makes the compensation decisions in your firm;

•Understand what type of compensation system your firm uses whether open, closed, partially open, lockstep, formula-driven, etc.;

•Understand the partnership structure of your firm;

•Familiarize yourself with the list of factors evaluated during your firm’s compensation process e.g., origination credit, billable hours, leverage of your practice, client relationship team leadership, contributions to diversity, etc.;

•Determine whether you have a mentor/sponsor participating in the process formally on your behalf;

•Understand the diversity structure of the compensation committee. Research shows that having women and minorities on a compensation committee can counter biases that may play a role in compensation decisions; and

•Know whether your firm encourages “lobbying” on your own behalf with members of the compensation committee or if it is better to enlist others to advocate for you.

Second, once you know what information you need, you must figure out how to get it. Some of the information is available in the partnership agreement, or other policy/procedure statements, but much of the information will need to be obtained by individuals you can trust to ask. That is why having a mentor/sponsor is essential.

After you gather all the information you need, turn to your action plan. You should assume that your firm requires a self-evaluation and reviews from others when determining attorney compensation. As you develop your self-evaluation, follow the instructions carefully, highlight your strengths and do not be shy, quantify the projects you’ve worked on, confront any setbacks you may have, use clear and direct language, and turn it in on time. Likewise, when meeting with the decision-makers, prepare the same way you would for a court hearing armed with all your helpful knowledge. The article suggests preparing an outline, boiling down key points, affirmatively addressing any issues or concerns, and making a specific “ask” during the meeting. 

Finally, remember to navigate the negotiating process carefully and prepare adequately because, as the article notes, “negotiating your own compensation can be tricky.”

Keywords: woman advocate, litigation, negotiating compensation

Ariel E. Harris works at Smith Moore Leatherwood, LLP in Charlotte, North Carolina

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