The end of the year is drawing closer, and law firms are gearing up for annual compensation discussions. Are you ready? Here’s how to prepare.
Even as a rainmaker, compensation meetings can be anxiety-inducing.
The thing to keep in mind and the starting point for your negotiation is that your compensation should depend on YOUR performance, NOT the firm’s.
Remember: Your firm needs you, especially in a down year, so you shouldn’t have to settle for less. And you DO have the leverage to get what you deserve.
I explored this in more detail in my most recent post on this blog. This week, I’m focusing on the next step: Having the compensation conversation.
How do you approach and manage what could be an uncomfortable discussion with leadership about your value to the firm?
How can you stand up for what you deserve?
With the correct understanding of your negotiating power as a rainmaker, an evidence-based business case, and an approach that aligns with the firm’s culture, you can engage in a more effective compensation conversation and ensure you get paid what you’re worth.
Let’s dive in.
Start by focusing on your business case.
The first question to ask yourself is: How does your book of business impact the economics of the firm?
For example, if you have $10 million worth of business, the firm depends on you — not the other way around. (I use $10 million here, at most firms, this is a huge book of business. Your firm depends on you even if your book is $1 million).
You directly control origination and drive revenue, delivering tangible value. So when profits dip, the firm should invest in those still generating income, not try to justify lower pay.
Broader belt-tightening should NOT affect your compensation, but you must make the argument.
A strong, evidence-based business case will put you in a position of strength and remind leadership that the firm’s success depends on you.
To begin, quantify your book’s origination revenue and profitability impact. You can model your pay benchmarking against fair market compensation based on your portable book.
Firms have different compensation formulas, and you won’t always be able to dictate terms. If you’re a great rainmaker with low hours, then be sure you are at a firm that weighs originations more highly than hours worked. There are still a few lock-step firms out there as well. The point is to understand what you’re worth and make sure the compensation structure works for you.
We all know evidence removes subjectivity, so make it about the math!
It’s not just about the past…future opportunities matter, too.
You shouldn’t stop with the past, though; your book of business also represents potential.
- Do you foresee opportunities to capture more business?
- Would attending a critical conference help you develop new long-term clients?
- Could you grow your book with more marketing?
- Do you need a new associate for your department or group?
Your future potential often depends on additional resources and support, so you’ll have to make a business case for that, too. Even in the worst economic conditions, your firm should invest in you, bringing in more business.
Ask yourself what you need to grow your book and ask for it—frame requests not just as expenses but as investments that will yield clear ROI.
- How much new business can you capture?
- What will it cost to send you to that conference, and how much revenue will it generate?
- What marketing support do you need, and how much will it grow your book?
- What work could you bring in/get done if you had more associate help or a deeper bench?
It’s a strategic conversation based on the opportunities you see, so the more tangible the outcomes, the better the case.
It’s also important to show that you have a strong strategy and can support your expected results with evidence.
You can use your past successes to justify future investments.
Have your past experiences taking similar actions generated 300% one-year ROI consistently? That is strong support for reinvesting in your efforts.
Keep your firm’s culture in mind.
Law firms exist to make money, and all will be open to making investments if you present a solid case. No two firms are the same, and the personalities can influence the conversation unfolding. So, adapt your strategy accordingly.
An amicable managing partner may be more receptive to a conversational approach focused on mutual needs.
On the other hand, a blunt CFO driven purely by numbers may prefer you lead with figures.
Factor in the firm’s compensation philosophy, as well.
You may need to gradually work towards change at a rigid lockstep firm by seeking unpaid origination credit. Meanwhile, a firm that eagerly rewards rainmakers may respond better to direct pay demands backed by market data.
Regardless, avoid jumping straight to contentious positional bargaining — suggest win-win, business-driven solutions and help them help you.
Put yourself in your leadership’s shoes, and try to speak to their constraints and challenges. Maintain steady professionalism and stay on the high road.
Remember, you’re not there to make adversaries or issue mandates. You simply want fair compensation based on your objective value.
There are limits
Yes, being a rainmaker gives you a lot of power, but you also need to keep it realistic. The firm must make money: you can’t ask for more than what you’re bringing in.
Personal helicopters for your morning commute are likely off the table.
But if you walk into the compensation meeting prepared with ideas and ready to make a compelling business case, you will be in a solid position to get the things you need.
It’s all based on business.
I’m happy to support you if you’d like help planning your compensation meeting. A short conversation is probably all that’s necessary to give you the confidence you need. Get in touch here.
What if talks still stall?
Ideally, your rational, evidence-based case and negotiating power as a rainmaker will empower you to get what you deserve.
But what if your firm lacks the ability or willingness to meet your needs?
If your extensive good-faith efforts lead nowhere, it may be time to move on.
Perhaps your leadership outright refuses to budge. The firm may be facing a down year or even severe financial struggles that keep them from investing (this is a huge red flag: if they can’t invest in a rainmaker, the situation may be worse than you think). Or maybe you think a lateral move would be more financially, professionally, or personally rewarding.
Always enter compensation conversations aiming for mutual success…but also know your limits and boundaries.
You deserve a firm willing to invest in your success — and as a rainmaker, you are in control of your destiny.
Remember, uncomfortable conversations feel more manageable with support. I’m happy to help strategize, develop your business case, benchmark pay, and prepare you to negotiate effectively from a position of power.
And if talks do stall and you need to consider other options, I can help with that, too.
Whether in or out of the market, you don’t need to settle for less. Let’s schedule a call to discuss getting you what you deserve this compensation season.