In this last chapter of our lateral move masterclass, we will be discussing remuneration and just how careful you need to be when entering into the offer and acceptance phase.
Step 7: Offer and acceptance
Negotiating remuneration as part of a move is often sensitive. A move based on your portable business will, in all probability, mean that you are less profitable in your first year with your new firm (as clients slowly transfer, WIP is generated and recovered in arrears and new business is developed etc.) than you were in your last year at the firm you are leaving. In this context, a pay rise as part of a move seems nonsensical or, at least, uncommercial.
The end point of negotiations is generally determined by how your lateral process has been handled at the outset. At the most obvious, if you are moving to a firm with a top of equity well below that of your present firm it is very unlikely that there is any scope for you to earn more and indeed you may earn less. Where remuneration is an important driver in the move, an understanding of the market and the capacity of a targeted firm to meet your needs is vital. Positioning you so that your remuneration is appropriate and proportionate to your contribution and at a level that fits within the metrics of the firm you join is a complex process with many moving parts, any one of which can derail the process if incorrectly pitched.
As indicated earlier in this series, a move in which the business case is the joint responsibility of the lateral and the firm joined is the ideal. A firm which is confident in its ability to generate work and support the practice of an incoming lateral will be better placed to offer competitive compensation than one which looks to the lateral alone to generate revenue.
Taking the above into account what should your business plan look like; what should it contain and what should be omitted? A well-structured plan should not be overly optimistic or excessively conservative; rather an honest appraisal of the opportunity you see for you and the firm you mean to join. Ultimately the plan should accurately reflect the impact that your presence at a new firm will have on its clients, partners, revenues, and profits. In the next Chapter you will find our template plan which seeks to answer those questions.
