With the uncertainty of Brexit looming ever closer and Mark Carney, the Governor of the Bank of England, having posted a worryingly low growth forecast for 2019 (now only 1.2 %, which is down from the previous estimate of 1.7%), the start of 2019 doesn’t exactly augur well…. But forecasting, as we all know, is a very risky business and even so-called experts and bookmakers can often get results badly wrong. For instance, the Brexit Result of 2016 and the General Election Result of 2017 are probably two of the most infamous, along with Ocado’s share price rebounding after some heavily negative initial comments from analysts. With the latter, staying in for the ride proved to be a most rewarding journey…
However, what we can glean from the current closing stages of the tense Brexit negotiations are the ways in which they resemble negotiations for senior legal appointments. Indeed, where there is the energy to do a deal, both sides will still want to deliver ‘value’ regardless of what side of the fence they are on. A good recruitment agent can usually play a pivotal role in helping to secure the best deal for the candidate in these senior levels, especially at the critical stages of the negotiating process.
The offer stage at the senior level generally falls into 2 categories:
1) The delivered offer reflects what you have asked for and you are happy to accept. (Please note that to achieve this, some hard battles behind the scenes may well have been fought on your behalf).
2) The delivered offer falls well below what you were asking for, despite your remuneration criteria being clearly visible on your CV, and hopefully correctly relayed by your agent. (Salary information is often redacted for obvious reasons and invokes jealously and resentment amongst some other disciplines. I will leave your imagination to conclude who invariably tops that list…)
The reason why offers can fall short is that a Board or General Counsel is limited by the remuneration committee to go above a certain amount, or simply does not want the hassle of having to ‘beg’ to HQ in say New York or Paris. Critically, if a candidate wants the job, it is essential that the agent asks what it’s going to take to get them to agree to the offer. They then need to determine whether they will be accepting the job offer, especially if the right compromise is achieved.
So what do you do?
Personally, I always find placements to be like the meeting of a supply and demand curve in economics. As a client, our expectations are always very high relative to the price that we would like to pay. In late 2018, the difference in salary between a 1.5-year PQE corporate lawyer and an EMEA Head of Legal was a ‘mere’ 15K… Alas, the market will almost always determine the price - unless severe market intervention can dictate otherwise.
Conversely, candidates will always want to maximise their packages – and with good reason: none of us work for free and you only get one chance to negotiate your starting package. After all, lawyers negotiate hard for a living and would never pass up such an opportunity.
Invariably, when such situations arise, it is always advisable to push very hard on the aspects of variable pay such as stock grants, bonuses and stock options as these elements tend to be easier to change than any major uplift in the base salary.
Indeed, the base salary is the pivot affecting pension and bonus levels. Increases in offers in base salaries tend to be in the 2-7% range after negotiation. Pushing too hard can sometimes leave a sour taste and in such situations it is critical that an agent has a sixth sense and advises the candidate that ‘they have run out of rope’ in the negotiations. Maximising the outcome in a polite and assertive manner, that is respectful to all parties, is always the best way forward.
The final weeks of the Brexit negotiations are sure to live long in memory and will be analysed for years to come. So for now it seems all we can do is wait. But remember, money talks and it always will.
Brian is the Head of in-house legal recruitment for Chadwick Nott’s London and International markets. He has placed top lawyers in roles in London, Luxembourg, Dubai, Oman, Saudi Arabia and Switzerland.
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