How to negotiate your compensation package

Even for experienced partners used to navigating major deals every day, the idea of negotiating your own remuneration package with a new firm can cause anxiety since it comes down to one key question: what am I worth?

The key is to make compensation negotiations part of the whole process – not just at the end.

Here are our top tips on how to develop a strategy to negotiate the best package.

• Market information is the key weapon in your armoury. What can you find out from the legal press, market reports and published firm rankings?
• Know your sector and what others in a similar position are accepting in terms of compensation. This provides you with additional bargaining power and allows you to negotiate from a position of strength.
• Create bargaining points to make your position stronger. What/who does your target firm need and how can you fulfil that need? Show how you will enhance their team and why they need your skillset and/or existing client relationships.
• Use the skills and knowledge of your recruitment consultant. They are both your ambassador and your guide to the market – which is in a constant state of flux. You need to keep abreast of the market via your recruiter before you begin any salary negotiations.
• Decide up front if you prefer to negotiate yourself, or ask your recruiter to do it on your behalf. Who is your best advocate? It’s important to start with understanding your own personality type first – be aware of your own negotiating style and limits and how you may over or under compensate for personality traits.
• Partner compensation is governed by supply and demand in the market as well as your book of business. Formulas such as the classic ‘remuneration equating to a third of practice size’ are overly simplistic. If you practice in an area which is in demand, you can command a premium compared to what your practice would ordinarily justify.
• Guarantees are still being offered. However, firms are generally reluctant to offer multi-year guarantees. Pushing hard for a guarantee also can send a message that you are not backing your ability to bring across business. Many of the law firms we work with are amenable to the concept of shared risk, where a base compensation is agreed with the prospect of additional uplift in compensation, should the partner deliver on certain revenue goals set out in the business plan.

Having all the information at hand at the start makes the process easier and keeps you aligned to what you want throughout. By metaphorically leaving ‘breadcrumbs‘ throughout the process, you will lead a clear path to your expectations, which also makes the process easier for the interviewers and creates a more favourable impression.

At Deacon, our experienced and well-connected partner consultants are here to help you find the best lateral opportunity. We can also advise on business case preparation and the most effective strategies to complete Lateral Partner Questionnaires. Do get in touch with our partner team to find out how we can help.