Drink Responsibly. The Lawyer's Guide to Salary Surveys
“Take them with a pinch of salt!”
That’s what I was told when I first came across them at university as I was seeking a clerkship. Since then, I’ve become much familiar with them and now I prefer to take them with a pinch of salt, a bite of lemon, and a shot of tequila! In my experience, just like alcohol, salary surveys should be consumed in moderation.
From Curiosity to Cravings
No one wants to be underpaid, so we all feel the natural craving to check if we are. That’s the time we tend to seek out the salary survey or jump onto Glassdoor.com. But once you you glance over those eye-wateringly big numbers at the top end of the salary brackets… for the same job you do ... you will no doubt be left with a distinctly bitter aftertaste.
Similarly partners and general counsel, who have to manage a budget, may also quickly feel depressed as those very same salary survey numbers draw out a ballooning wages bill right before their very eyes.
But in truth, a salary survey doesn’t really serve either of the two purposes well in isolation, because it cannot divine the exact “market price” of a particular lawyer in the legal marketplace. Therefore, all users should get a clear understanding of the useful purpose they can play, but must also heed their limitations.
Mixers and Chasers
Salary surveys are useful in mediating expectations by pointing out the general vicinity where supply and demand intersect in the legal marketplace, which gives users a starting reference. But this is a reference point that comes with limitations, as a salary survey is an incomplete and imperfect measurement tool that answers in bands and averages. And, as we know, lawyers are not average!
Yes, your mum was right when she said you are special! Rarely are two lawyers ever the same, even if they left law school on the same day with the same marks. Each job-seeker will have contrasting expectations as to pay and prioritise different things, which results in them accepting different salaries for different reasons. For instance, one lawyer determined to pursue a career in litigation might be willing to accept offers from a firm that provides an opportunity for her to do that, while foregoing higher offers from a firm wanting her to go and work on IPO transactions. None of these reasons will be discernible from a salary survey.
Similarly, on the demand side, just as no two lawyers are alike no two law firms or companies are alike. This has two important ramifications. First, different firms and companies have diverse organizational structures, levels, standards, and different expectations for their lawyers. While this is, to some extent, less of a problem for lawyers as we use a common standard (the post qualification experience or “PQE”), there is no common understanding between firms of what a, say, 6 PQE lawyer should be able to do that a 5 PQE lawyer should not have to do. So Firm A’s senior counsel might be only Firm B’s associate. This is further complicated by the fact that in Hong Kong it is commonplace for lawyers to be admitted in different jurisdictions, with different pre-qualification training requirements, so firms will adjust the pay levels differently to account for this. Second, as each firm has its own business goals, plans, it means they also have a different willingness to pay. For example, an American firm entering the Hong Kong market for the first time will have to pay higher salaries to poach staff from local firms, this will widen the band, but a salary survey won’t tell you this detail. The averages hide such distinctions.
This brings us to when salary surveys are helpful. Salary surveys are of most use at the graduate level, because candidates and roles are more similar at this point in their careers. Firms are also more willingly to share data to ensure that their pay levels are competitive as there is the most competition at this level. But as you get more senior (ie more special), the bands get wider and thus salary surveys become a less accurate predictor of the salary you might get paid in your next job. This is just another way of saying that your pay becomes a better reflection of your experience, performance (both past and future prospects), your priorities as to trade-offs, and the level of economic activity (ie demand and supply) in your area of specialty.
You should also bear in mind that while the data collected in a salary survey is based on actual placements, not all practices and all levels have the same number of transactions at the same time (and not all recruitment firms publishing surveys may equal reach in the legal market), so there may be fewer transactions from which to collect the data. The numbers will reflect this. Speaking in general, the more placements at a particular PQE level or across the types of practice, the more accurate the numbers should be. Fewer transactions can lead skewed numbers or very wide bands.
Salary surveys, like all statistics are also measures of past performance whereas the market is dynamic and forward looking. So past performance is not an indicator of future success. The market can change very quickly in unpredictable ways. For example, last year’s survey reflected the sizzling hot market for IPO lawyers, but by the time you are looking for a job, the IPO market may have turned very chilly and salaries in that practice area might have headed south.
Don’t Drink and Derive
Most importantly, salary is just one measure of a job, albeit an important one. It won't account for the great training that might be provided, interesting professional growth opportunities, a harbour view, ample holidays, generous maternity or paternity leave, great colleagues, etc etc. These multitude of other things beyond a dollar figure means you shouldn't reduce yourself to a single number – even if numbers seem more objective – and to then use the salary survey to compare yourself against your notional peers.
So while the numbers in a salary survey can be a good guide as to what is a reasonable starting point for salary expectations, it is crucial to use them in tandem with a knowledgeable recruiter. He or she will be able to tell you the current state of the market and its direction on the first call. They can also tell you about the other benefits or expectations of a particular job or firm, which will bring into balance the pay figure by putting it in context of the full remuneration package. This gives you a much fuller picture of the real situation on which to base your decisions.
The truth is neither you nor your job can be reduced to one solitary figure and using salary surveys in isolation for comparison can lead you to derive that you’re not being paid enough to do your existing job or that you're not being "valued" by your employer. So, if after reading a salary survey, you start to believe all those social media memes screaming at you to “Leave your job if your boss doesn’t value you!”, you’d be well advised to take such messages, and that bottle of tequila, and put both away in a cupboard. You’ve reached your limit for today.
Davyd Wong is the General Counsel of Star Anise Ltd, the leading recruitment and human resources firm in legal and compliance sector. The opinions expressed here are his own.
For the original article, please visit https://www.linkedin.com/pulse/drink-responsibly-lawyers-guide-salary-surveys-davyd-wong/