Salary Realities and Value Propositions for Lawyers

People income growth, Salary realities, value propositions, KPA Lawyers

As my firm seeks lawyer employees and as a Law Society mentor, I am always surprised at the salary expectations from the many that I speak to who feel that their licence or years of call automatically entitle them to a six-figure salary. This expectation permeates throughout their career. This is not unique to younger new calls but even senior counsel. I have met hundreds of lawyers who fall under the following profiles looking for employment:

  • Lawyers for a government agency for eight to 10 years looking to jump to private practice but only have practised within that agency in the technical area required by that agency (clinics, Crown counsel, ministries, etc).
  • Lawyers working as associates for a law firm for at least three years looking to jump to another firm but do not have any clients who would follow them and in some cases, do not have any experience in any other legal area besides their current area of practice so require training (e.g. a corporate lawyer joining a litigation firm).
  • Internationally trained lawyers who are very senior (in some cases 10-20 years) in their country of origin but have little to no experience in Ontario and no Ontario clients.
  • Associates who have just been called to the bar.

In all of the above, the salary expectations are that of anywhere between $100,000 and $200,000, excluding any benefits or further upside. The issue with this market expectation is that it reflects an older view of the legal market or a comparative expectation of downtown firms where the jobs are either not available and certainly not for everyone — it does not translate to the realities of the majority of private practice. Private practice requires not only the technical knowledge of the law but also a level of salesmanship as expected from any other service agent, whether they be an accountant, engineer or mechanic.

If a lawyer is looking for employment at a firm at a six-figure base salary, but does not have any clients or lead generation to assist in covering the cost of such salary, and at the same time requires additional training for a new area of law (on top of typical onboarding training and hybrid work-from-home expectations), a prospective employer will be rightfully reluctant to invest large sums on an employment relationship with them. This is doubly true given that the cost of the same training of a placement or articling student for a limited time is at a fraction of the cost. The issue is not so much that there are too many lawyers and not enough jobs, which is the common thread, but too many lawyers who believe that their base salary expectations actually correlate to market value. This belief overlooks that critical skills are needed to translate knowledge into something a firm will value.

When a lawyer is called to the bar, their expectation is such that they belong to an elite class of individuals — that after a four-year undergraduate degree, three-year law degree, two exams and one year of placement, they are now expected to make a large market salary that can only rise with experience and year of call. The problem with this expectation is that lawyers as a group are not part of a collective bargaining agreement where salary and seniority is guaranteed. On the contrary, they are no different from any other private service professional who enters the market. Lawyers may be able to charge more per hour on average to a client based on year of call, but that advantage depends entirely on the lawyer’s ability to sell and convince a client to pay them versus someone else for the same or less. This means, in order to achieve the salary they wish, lawyers need to learn about value proposition and sales. They must be able to answer certain questions of themselves that can translate to a prospective employer such as:

  • How can I bring in clients to cover my expected salary?

  • Can I service the clients that I bring in so they refer others and are recurring themselves?

  • Can I close consultations?

  • Can I collect the bills?

These types of questions are not unique to lawyers. Anyone in service must answer these questions for themselves and prospective employers or they will be unable to command the salary they are asking for regardless of their profession. Getting called to the bar includes you within a class of professionals as a condition to practice, but a lawyer will always earn less than those in other professions until he or she has earned the right to additional wealth.

What does this mean for those categories of lawyers who are looking for work or looking to make the switch from their current practice? This means one of several paths:

  1. Expect less base salary and take more risk — if there is a steep learning curve in learning technical knowledge, as in the case of a lawyer changing practice areas or legal systems or client type (government versus private practice), then do not ask a new employer to take the risk. Instead, expect a smaller base salary but negotiate incentive structures that bet on yourself to learn quickly. This applies in a variety of scenarios: in-house counsel, new firm, new calls or starting your own practice.
  2. Continue to search for employment at the salary you expect. I’m certain with enough job applications, a lawyer can achieve the salary but then will expect to switch again because without understanding sales and service, the lawyer will be capped at the work the firm filters towards them.
  3. Work for a government agency and accept the salary structure and budget constraints.

Lawyers who are mentoring students should include answering these questions or emphasizing this. Younger associate lawyers or articling students should focus on understanding how law firms achieve their clients. The law will always change but sales and service are core skills that directly correspond to wealth generation.

This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.


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