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Revenue/Salary ratio
Posted: Fri Jul 17, 2015 5:24 pm
by El Dangeroso
Is there a rule of thumb for the relationship between revenue received and salary? For example, if my efforts earn the firm $xxx,xxx in a calendar year, my compensation should be what percentage of that as a general rule? I've heard 4:1 is a reasonable rule of thumb in other industries, but not sure whether there is a comparable ratio for the legal industry.
If it matters, assume a mid-sized firm that focuses on litigation. Also assume I am a junior associate that doesn't bring in any clients.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 5:28 pm
by kaiser
You are going to be paid pretty much the same regardless of how much revenue you bring in. How much revenue you bring in is tied to how many hours you work, so they may give you a higher discretionary bonus if you work a crazy amount of hours, but not even all places do that.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 5:36 pm
by El Dangeroso
I'm more concerned with whether there is a figure that I "should be" getting paid, but thank you.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 5:39 pm
by RaceJudicata
El Dangeroso wrote:I'm more concerned with whether there is a figure that I "should be" getting paid, but thank you.
Are you in school? Or post-grad? If you are in school, and are looking at Biglaw jobs, there will be no negotiation whatsoever. There may be some outliers (maybe?). Check out NALP directory, lot of salary info there.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 5:45 pm
by El Dangeroso
No. This is a very general question, and isn't necessarily tied to my own specific situation. I am hoping to elicit some hypothetical musings more than anything else.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 6:25 pm
by First Offense
El Dangeroso wrote:I'm more concerned with whether there is a figure that I "should be" getting paid, but thank you.
Stop fucking worrying about it and enjoy your six figure salary.
Re: Revenue/Salary ratio
Posted: Fri Jul 17, 2015 6:46 pm
by Anonymous User
Based on my own findings in small/mid should be about collected billables/3.5 for first years and anywhere your billable rate increases commensurate to your experience. This number works in big law too which is why I think it's a decent metric.
Try to negotiate somewhere in the 3-3.6 range. Don't accept a 5.0+ denominator unless you have no other options. And in that case you'd be getting rocked and can feel ok about looking elsewhere.
For instance, 70% expected collected at a smaller shop where you should bill about 1600 hrs @ $250/hr. $56k is them taking advantage of you. 70k is a good faith offer but you can do better.