- law dawg
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Today we thought we would revisit a topic we discussed in a post back in 2013: counteroffers. We are in an interesting job market right now and it seems like it is easier than ever to jump ship for a few bucks more, but what if your current job gives you a counteroffer? Back then we threw out the following hypothetical:
Wilma is a third year associate working for Flintstone and Associates. She is not necessarily unhappy with her job, but feels she is underpaid. Accordingly, she starts applying for other jobs and gets an offer from Rubble & Slate LLP. The new job has the raise she wanted and has all the same benefits and job requirements. When she gives Mr. Flintstone her notice, he offers to match the offer from Rubble & Slate, but needs her decision by the end of the day. What do you think she should do? Is it ever a smart idea to accept a counteroffer?
Why not accept if she likes her current firm? Young attorneys jump ship all the time for economic reasons, which doesn’t necessarily result in hard feelings. If she likes her current firm, stay.
Moving around might increase your earnings slightly in the short term, but you miss out on building client relationships, developing your skill set by seeing cases through to the end, and working toward partnership. Being at a firm you like and working toward an equity share will increase your earnings much more than jumping around for small increases early in your career.
Instead of applying and interviewing at a different firm, tell your current employer you want to make more. Give them specific reasons (the most persuasive reason is how much money you are making for the firm after they pay your salary and overhead) and information on what other firms are offering for the same level of attorneys (in this example, what is a 3rd year litigation associate making at a similar sized firm in town). If your current firm wants to keep you, they will negotiate an increase. Win win. If you show up to the managing partner with an offer from another firm, that might elicit a counter but there will be animosity and distrust going forward.
This is the way. I believe this is much more effective than going with a counter offer. It also lets you as the jobseeker know whether the tea leaves would suggest that looking elsewhere is prudent.
It would be nice if those counteroffers ever actually beat the offer to leave. Not by much, even, just anything but a reflexive match.
And giving you one day to decide is pretty unfair, too.
Make it easy to stay.
If it’s a close call, I’d take the fresh start. You can’t do this every year, but changing your environment a few times in your career is actually really helpful for a lot of reasons.
As an associate, whenever I got an offer or raise, especially if it came with a caveat that there were economic realities impacting their number, I always told them I assumed they were doing the absolute best they could for me, and I promised I would never come to them with an offer from another firm and ask them to match it, because I knew they were paying me the most they could.
Tip to Associates: When determining whether you are underpaid, please make sure you consider total compensation between your current and prospective employers. Think salary, bonus, insurance coverage, 401k match, FMLA policy, and path to partnership. Quite often I don’t even need to make a counteroffer; rather, I make sure that the Associate is aware of all the different compensation elements and how they add up to total compensation between the respective opportunities.
To illustrate, I had an Associate show me their offer for $35,000 more in base salary; however, I immediately noticed the minimum billable requirement was 200 hours higher to even become bonus eligible. I simply noted that they could stay, work 200 hours less, and be eligible for a bonus around $60,000, hence they would be leaving for less.
Tip to Partners: Try to show grace and remember that young attorneys are just that, young. Young does not mean incapable or “less than”, but it does mean that they haven’t yet had the opportunity to learn through experience. So please make sure to educate, inform, and mentor, versus get angry and frustrated that an associate may be considering leaving your firm.
are you accepting applications?
This is a great point. For some reason, partners are often oddly mysterious about trying to explain ‘law firm math’ in regards to the salary extrapolation based on minimum hours, avg rate, rate of return etc so that the Associate can figure out themselves if they are being paid under market and whether what appears to be a great offer is smoke and mirrors
In my experience, associates fixate on the bottom line salary number, and dismiss the higher billable requirement. They’re young, and so they think 200 or 300 extra hours isn’t much, until they move and actually have to bill them.
I had a partner once tell me something that I did not believe then but do believe now: if an associate or legal secretary is looking at the door now, giving them more money will not stop them from looking at the door. It just increases how much you are paying them while they chart their next move.
Associates– communicate with your partner team the path that you are looking to follow, where you want to be and how you hope to accomplish that with your current firm. Partners/Bosses– communicate with your staff the options and opportunities to grow within your existing firm.
agree. if a few thousand dollars changes the way you feel about your firm (it doesn’t), the problems are bigger than the money. the money is one piece of feeling undervalued or that whatever you are going through is worth it. eventually you buy a few more things but return to what really caused you to start looking in the first place.
on the employer side, it’s hard not to expect more when you pay more. so you’ll give that money, but you’ll want more for it. you won’t acknowledge that you had a value in the associate before and are now paying market value. this will lead you to be more critical, watch the clock more, demand more, which will just lead the associate to feeling undervalued again.
i think the best path is to be open. communicate your value proposition, adjust it where necessary, and do it broadly when you do.
When I see a firm owner taking lavish vacations and living in a massive house while taking away perks and cutting pay…. no conversation will be had. I will leave.
@12:28 lavish vacations, I will leave
Pardon, but you did not take the risk of starting the firm, barely paying bills and sometimes not sleeping because you were worried about making payroll, becoming personally obligated for a multi-year lease, paying malpractice premiums, and you did not sign the note for the line of credit at the bank.
A crude vulgar expression comes to mind.
Your compensation for what you do has nothing to do with their compensation for what they do. If you gauge your worth by whether the guy/girl who owns the firm takes vacations, something is amiss.
agreed….if you have animosity towards a partner taking a “lavish” vacation, you need to ask yourself: how can I get to that level. Then act accordingly.
To the person who said they were going to see Rush. I know Neil can’t be replaced but do u think the new drummer (I’m a very poor frustrated wanna drummer) will somehow get through the polyrhythmic playing and compositions of Neil? Rush can be listened to simply or with an ear towards complexity.
You are correct that Neil can never be replaced and I will be attending multiple shows (tickets for three shows so far) on this tour (my personal count of Rush shows to date is 38) with a little trepidation and sadness as a life long Rush Fan.
However, Neil is 1/3 of what I believe was the most talented trio in rock and roll. 2/3 of Rush is still greatly superior to most other acts. That said, while I had hoped for a rolling cast of fill in drummers of some RnR notoriety, this new drummer certainly appears to have the chops.
She will never be Neil, but if she can keep up (and I sincerely trust Geddy and Alex’s judgment that she can), I will enjoy the shows and attend as long as they will tour. Though it may break my bank. . . .
Thanks for such a thoughtful reply and I hope you enjoy the shows!
Neil is my favorite drummer of all time so I’m not diminishing his accomplishments at all in saying that there are dozens of session/touring musicians who can play his stuff. The level of musical talent out there is incredible. What those session/touring musicians probably can’t do is: 1) write (as opposed to play) the drum parts Neil wrote, 2) write the songs Neil wrote and 3) fit in perfectly socially with the bandmates. There are a lot of variables that lead to the creation of a great rock band, and chops are only one of those variables. All of that to say: I’m not the person you asked, but I have no doubt the replacement can do a fine job.
12:58 here and the original Rush post-er.
I agree with this whole post. Having deep dived on the new drummer, she really is an exceptional talent. I will close my eyes and pretend. . . and I may shed a tear or two during whatever tribute to Neil they have.
Attention all blogs of the Solar Federation: we have assumed control! (2112)
Yeah. The new drummer is really good.
Thanks. I too can’t imagine that Geddy and Alex would pick anyone that couldn’t present the show the way they want.
Major Rush fan here and I’d like to thank you all for the discussion!
What do you do if you hate talking about money at work?
Stay underpaid.
or go out on your own,.
Depends on if you accepted the offer from the new job before accepting a counteroffer. I think it’s highly unprofessional to accept an offer and then recind after they’ve invested in equipment and IT creating your logins, etc.
The equipment can be used for whoever they hire to replace one who rescinds. And, creating logins really isn’t anything of any significance either cost or time wise. It may be unprofessional to rescind an offer, but not for your two reasons.
If you outsource IT, it can become significant — especially if multiple candidates are rescinding. Not to mention the costs of recruitment, job posting, time spent interviewing.
i know someone who has asked for a raise based on money they brought in, was denied. then they left to a competing firm who offered more money. sometimes i feel there are bosses who genuinely dont value the workers they have and think they can be easily replaced with a cheaper equivalent.
Plot twist: they weren’t.
My first did that decades ago. Boss fired the senior attorney (getting paid 2.5× what I was being paid at the time) and said I could what he could and better. Six months later I asked for a raise to half of what he was being paid and told me to seek it elsewhere.
In this same vein, it seems like a lot of firms are having trouble hiring lawyers in the 1-5 year range. I’d be interested to see whether other readers are having that same issue, and if so what they’re doing to find new talent.
My read on the market is that everyone is having trouble hiring all levels. There is definitely a lot of need for more experienced litigators. Trouble is a lot of lawyers are not interested in that. They just want to work from home and not have confrontation. I don’t blame them.
Yes this. Do new lawyers want to work in an office, much less go to court and fight over stuff? Doesn’t seem like it. Back to the new bar exam, this “problem” is likely to get a lot worse.
Yep. The plan is to make entering the profession easy.
AI will likely disrupt this set up for many lawyers. Many of those work from home corporate jobs are going to be some of the first to go. Litigation is at least safe from AI for the time being, may not be the case 20 years from now.
If I were a 2L or 3L right now, I’d be doing as many moot court competitions as possible, trial ad, etc.
Paying more
I don’t know that there is always one right answer for this situation, but if you’re already looking elsewhere, chances are you won’t be happy staying put. I’ll spare the details, but one of my biggest professional regrets was staying at the current firm when they not only matched but exceeded the other offer from a small firm that was offering their max. I stayed for another 20 months and often wished I hadn’t.
Although I am out of the head hunting game, I’ll stick by my thoughts and comments from 2013.
I took a counteroffer once. Firm made a lot of money off my work that year, about 10x my increased salary from just my work. At the end of year, no raise, no bonus. I was gone quickly. I have never accepted the counteroffers since.
See comment above on animosity and distrust if you bring an offer to your current firm….
It depends. If it’s a public attorney or in-house gig where HR doesn’t permit competitive market increases, but can match through a special approval process to avoid losing talent then maybe. Otherwise, if it’s just a firm you’ll just continue to resent each other for the transaction until you eventually leave anyway.
OFF TOPIC: SBN “Explore Germany” CLE. Is there even remotely a market for a program like this in Vegas? I certainly don’t see it.
It sounds nice, but how much does it cost and really, much like the annual boondoggle, I’m not sure I want to spend my vacation with you lot.
Seems like a program for International Law types (not that there is such a thing). Think: NY, LA perhaps. Vegas doesn’t exactly have a bustling IL community. Maybe in Gaming. But then you wouldn’t be going to Germany anyway.
Where do you go to hire a solid associate. We pay at least $150k plus bonus, 401k, paid medical, etc… and are having a hard time finding someone. That is for a new associate. If you have experience then it is much more. What head hunters do you recommend we engage and what is the fee for a head hunter on average?
What is your firm? If you say you’re looking on here, you will probably get some resumes.
Unless you are asking for 2100 billable hours that seems like a pretty good offer.
My firm is also looking with similar comp, and definitely not 2100 hours. We also can’t find anyone. At this point I am not sure where else to look.
I never accept the counteroffer. 1) if I’ve already accepted another offer, my acceptance is my word; 2) if my current firm tries to match my significantly better negotiated terms of my new employer but refused to do those things that were apparently always within their power, I resent that it took me going out and finding something better for them to do right by me; 3) to match a significantly better offer after not valuing me in the first place, they’re going to want things for that additional premium above and beyond the unreasonable demands already placed on me; 4) you can throw as much money as you want at someone, but if you can’t or won’t change a toxic culture there’s no path forward except the exit door.