As we approach the typical qualification time for lawyers in September-October and as we are in a very candidate short market, the battle that some law firms have on their hands right now is preventing people leaving. With this in mind, if you try and move firms, there is a strong chance that you will be receive a counter offer from your current law firm. But is that flattering, compelling or dangerous?!
On the face of it, it is certainly a great feeling when your current employer is prepared to offer a pay rise, greater flexibility, a sought after secondment or promises to allow you to focus on a particular type of work. Delving below the surface however, all may not be as attractive as it appears. It can simply be a cost saving measure as a firm usually spends over twice the annual salary of an individual to replace them, including advertising and recruitment costs, along with the drop in workflow and productivity. Research over the last few years indicates that, of the people who accept counter offers, nearly 50% return to browsing the job market within 60 days and around 80% leave their job within 12-18 months. There are 5 main reasons for this: future salary implications, reneged promises, short term fixes ending, continued frustrations for the employee and the employer disconnecting with the employee.
Let’s take those 5 reasons individually: -
When the salary package is offered to you by a new law firm it is likely be an increase on your current salary as one incentive to join them. Most firms will keep this offer in line with their pay structure. When you go to leave your current firm and if you give details of the package, the typical comeback is to match the salary or even exceed the salary of the offer. The pitfall here is that although it can be brilliant in the short term, you may have your target increased and/or price yourself out of future salary reviews. You could be told at salary review time that you have already had an increase, so you will be overlooked for a pay rise for another 12 months. This stagnation can lead to eyes being cast back over the job boards.
Aside from a pay rise one of the most common things which law firms promise to lawyers looking to leave is a change in work including clients, supervisor or non-fee earning responsibilities. These are easily said but are more challenging to deliver on. Although they can be given with the best of intentions, law firms which have an established way of operating are often simply unable to adjust that easily for one individual. As a result, people who are convinced by this element of a counter offer regularly wait three or six months and find that nothing has changed….. then it is back to the job hunt.
Another common element of a counter offer is a client secondment. I have seen this offered to lawyers who I am working with as well as individuals working with my colleagues, and it can be extremely persuasive. One example was an individual offered a once in a lifetime opportunity for a secondment to a major client who was actively involved with an international sporting event, which was of great interest to the lawyer. Something like that is exceedingly difficult to turn down, however it only lasts 6 months or sometimes 12 months. Then it will be back to the same role as before the secondment. The employer will hope that the short-term fix means that the person’s attention is distracted, and they don't revisit the idea of leaving the firm. Normally we have found that they do!
In summary even with a large pay rise, the frustrations which gave rise to the job search in the first instance rarely go away. From speaking with a substantial number of very well-paid London lawyers looking to move out of the city, I am personally very aware that money is not the primary motivator for most career moves. That does not mean it is irrelevant, there is always a bottom line or a number which makes things very attractive in a job move. However, there are always other reasons tied to the work, culture, colleagues, promotion or flexibility. In exactly the same way that there needs to be more than just a salary increase to move jobs, it is good to remember there will need to be more than merely an increase in money to stay. Counter offers do put a lot of pressure on an individual and you need to keep a clear head - looking a substantial pay rise in the face and walking away takes bravery. But I know people who have done it and been extremely glad to have stuck to their guns!
Finally, despite the flattering counter offer which might seem to cover the bases and address all concerns, there is still a risk that as you have shown a willingness to look outside the firm an employer will disconnect from your career progression and development. The reaction is damage prevention; expecting you to leave the firm at some point. The focus can shift to finding a replacement to avoid a hole in their team or a rushed recruit.
Once there is a foot out of the door, it is usually best to get out completely. Prolonging the exit process is never good and being convinced to stay only to shortly go back into the job market can cause long term damage to your career (not least because the firm who have gone all the way through the process with you in good faith might be very unimpressed). And, quite importantly, what does it say about your employer that they only chose to deal with the concerns when threatened with a resignation. If you have to hold a gun to your employer before they deliver what you need, then they are probably not the best place to continue developing your career in the way you want.
For a confidential discussion, please contact Liam Andrews at Chadwick Nott.
(t) 0117 917 1864
(m) 0792 189 5776