In this week’s American Bar Association’s ABA Journal, an article on the Dunning-Kruger effect and how it applies to lawyers. (Dunning-Kruger refers t...
How the Dunning-Kruger Effect Applies to Lawyers
October 17, 2014
Partner Compensation Always An Issue, But Rarely 'The' Issue
October 21, 2014
Lawyers, particularly those at AmLaw 100 or UK Magic Circle firms are generally well-compensated professionals. Granted, attorneys at these law firms rarely take home as much as their peers in banking, but lawyer compensation is rarely the chief complaint of lateral partners seeking to switch firms. Rather, primary motivations typically include the desire to avoid client conflicts, and the need to find a different platform—i.e., a firm that is better able than ones current firm to furnish cross-selling opportunities or to support the specific practice areas needed by ones existing or potential client base. Yet lawyer salary discussions are nevertheless an important part of the lateral recruiting process and need to be understood in the context of that process.
The first thing that lateral partner candidates need to remember is that lawyer salary discussions usually happen at the end of the lateral recruiting process, once all the parties have gotten comfortable that a deal may be possible. While it may seem efficient to “cut to the chase” and discuss lawyer compensation early in the recruiting process, such haste on the part of candidates may sour the firm on further discussions. On one level, it’s a matter of tradition and taste: lawyer salary discussions happen at the end of the process; that’s simply the way it’s done. But on a deeper level, attorney compensation discussions represent the end of a process by which the lateral partner and the firm have already come to a meeting of minds on the issue of whether the lateral partner would be a good fit for the firm, and vice versa. Obviously, compensation is an important part of the equation, but it’s a variable that’s solved for relatively easily; the hard part is determining whether the lateral partner and his or her law practice belong at the firm in the first place.
The best way for a lateral partner to assure that he or she will receive a firm’s highest and best compensation offer is to create a market whereby firms compete. Doing this requires skill and finesse—one wishes to avoid seeming heavy-handed about the approach. An astute legal recruiter will therefore reveal to the firm gently, but candidly, that other firms are also in discussions with the lateral partner.