We probably field more questions about salary trends than anything else. Candidates want to know what they are worth and if they are being well paid. Firms want to know they are meeting the market and keeping pace with their rivals. They are also questions that aren’t easily answered, which leaves open the possibility to negotiate your way to a better pay cheque.
While there are generally recognised ‘bands’ for qualifications and experience, there is no definitive source. Instead, you may consider your best bet to establish what you are worth is to talk to recruiters, look at salary surveys and – just ask your friends. However, while the latter option can provide informal guidance, caution should be exercised. This is often not the most reliable source because people tend to talk about what they think they should be paid, rather than what they take home.
The good news when there is no clear guidance for pay is that good candidates have the power of negotiation open to them. Counting in your favour will be such factors as demonstrable excellence academically or on-the-job performance. In simple economic terms, if you can prove your capacity to grow the client base, handle more work or higher value work, you can justify a higher pay rate.
However, there is a common mistake when it comes to salary negotiation – Beware of focusing too much on information from ‘the market’ without the appropriate context. This includes the firm you are working for, the type of work you do, the targets you are set and how you are tracking against it. The market sets a guideline, which is invaluable – but understand your own circumstances and effectively make a business case for the remuneration package you are after.
Armed with that business case, your argument is strengthened. Demonstrate your over budget billing, prove client development, deliver the evidence for strong demand for your skills in the wider market.
For those who worry that they are missing out on fair pay, in our experience, most people in the legal profession are compensated fairly. There are exceptions on the high side for strong performers or for those who show leadership capabilities and are on a path to success, or those who demonstrate specialist niche skills.
Again, reflecting economic realities of supply and demand, there are some areas where skills are readily available, and downward pressure applies. For example, private client or bulk work in bread-and-butter insurance or banking is seeing fee rates squeezed. If your skills are in this generic environment, one answer to better pay is to specialise.
Overall, lawyers tend to be pretty poor at negotiating a better deal for themselves. There is a call from Gen Y and Millennials for more transparency in how their salaries are calculated and that will help both ways. Firms have traditionally been quite guarded, while lawyers may have a surprise when they take in to account the cost incurred for them to sit at a desk every day regardless of the fees they make.
Some words of caution for those chasing the money: Being paid very well sounds great but it can be a problem when you are looking to move because it may price you out of a great career move. We know there are firms that are banking on just that when looking at their salaries for top performers.
Also bear in mind that it isn’t all about the money, anyway. New Zealand’s pay rates tend to lag those of Australia and remuneration in the regions is lower than the cities. We often have to point out that you don’t come to New Zealand to seek your fortune. Instead, there is lifestyle appeal. If more money simply isn’t possible, negotiate something else of value to you. That could include working from home, flexible hours, time for pro bono work. After all, your work should contribute to overall happiness, not detract from it.