The question “What are your salary requirements?” is the interview equivalent of “Hands up!” In many cases, the question does not arise because large firms adhere to a “lock step” system. However, if you do need to field this question, there are several factors that you need to consider.
What Is Your Value?
Let’s assume for the moment that you are leaving “Big Law” to take a position with a small firm. You are certain that you want this position because you really like the firm’s environment, practice, people, and location. The only problem is that you have absolutely no idea about the salary range at this firm; and you are unsure how to respond to the question about your salary expectations. Where do you begin?
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First, how much money is your time worth? In other words, are you going to a smaller firm because you will bill 1,700 hours rather than 2,100 hours? If so, you can begin by deducting the value of those hours from your current salary. Conversely, if you are moving from a firm with fewer hours to a firm where you will work much harder, what is the value of the increase in hours? There are many factors like the foregoing to consider. Are you joining the smaller firm because you will get much better experience, which in the long run will help your career? Are you joining the smaller firm because it does not have an “up or out” mentality, and you can establish a permanent “home” and a more secure future? Are you going to save time and money because the smaller firm is near your home? You need to consider what you are gaining and/or losing and place actual monetary values on such gains and/or losses. You will only be able to know your value if you truly evaluate the opportunity and its attendant advantages and disadvantages concretely.
What is Your Floor?
The desire to sell one’s self short is common. Perhaps you are worried that if you ask for too much (or even for what is fair), then the potential new employer will opt to withdraw the offer. The foregoing is unlikely because if you are discussing salary, then the potential new employer has made the decision to hire you because your skills, experience, and personality are a fit. In this economy, you can be confident that you were selected from among a large and highly qualified pool of candidates. Thus, the likelihood of a rescinded offer is de minimis, and you can safely assume that you will enter into salary negotiations. During such negotiations, it is critical that you know your “floor”, i.e., the lowest salary that you can accept and be satisfied. Bear in mind, I am not telling you that your salary floor is what you can afford, i.e., the lowest number that you can accept and still meet your monthly expenses. Your salary floor is the amount that you can accept and feel satisfied that you are being fairly paid for the value of your services.
Who Should Make the First Offer?
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Not you! It is very important that you allow your potential new employer to make the first offer. Often candidates are asked point blank “What do you expect in terms of compensation?” It is difficult to avoid the question once you are in that situation, but I do have some suggestions. You could try to defuse the situation with humor. “Well, I never like to negotiate against myself so perhaps you could tell me what you would like to offer?” I recommend only attempting humor if you are one who often resorts to levity! If you do not, then you can say the same thing in a very straightforward manner. “Well, you have much more information that I do about your pay structure and the value of your benefits package so perhaps you could tell me what you believe is a fair salary for a candidate with my skills and experience?” The key is to allow the new potential employer to make the first offer because they really do have much more information than you, and it is unfair to ask you to make the first offer absent such information.
I am not suggesting that negotiating your salary is easy, far from it. Rather I am suggesting that if you truly analyze your value, know your floor, and force your potential new employer to make the first offer, then your salary negotiation will be far less daunting.