I recently stumbled across a study that concluded that pay amount and pay satisfaction is correlated in less than 5% of people.
That is, for more than 95% of us, the amount we’re being paid isn’t at all linked to our level of satisfaction with that amount. (The same study concluded that pay amount and overall job satisfaction is even less closely correlated).
Even as a consultant who assists people secure pay rises in both their current roles and in new ones, I was struck by how low that figure is. I wondered if it would be as low for lawyers, who are typically extremely well paid, but who also have extremely high salary expectations.
So, I went back through my notes from the past 12 months where I’d had in-depth discussions with lawyers across the pay spectrum about salary, looking for the common complaints among those who felt they were underpaid.
Sure enough, I wasn’t able to see any correlation between pay amount and pay satisfaction, even amongst the better paid lawyers and partners.
So what are the factors that consistently fuel dissatisfaction with pay amongst lawyers?
- Lack of transparency
The number one reason that lawyers told me they were dissatisfied with their salary was being unsure how it was calculated. If they didn’t understand why they were being paid what they were, they assumed the number was arbitrary, not linked to their value to the firm. A lack of transparency around pay structures creates paranoia about being undervalued, and they won’t be comfortable with any amount, no matter how high.
- Lack of clear incentives
Lawyers are particularly ambitious, so an understanding of where they’re heading is essential to satisfaction in all areas of their career, including salary. As the pay trajectory for lawyers is usually a fairly steep one, they tend to be as focussed on next year’s pay as this year’s. Lawyers working at firms with clear pay structures often report higher satisfaction with their salary, especially when they know they’re due for a sizeable pay rise in the next round. They can also be incentivised in the current year by bonus schemes and clear cut KPIs.
- A perception of being paid less than their peers
The law is an intimate and competitive community where lawyers often share selective salary information with their peers at other firms. This holds particularly true amongst the highest performing and highest paid lawyers, who are often also the most pay sensitive. In most of these cases, the dissatisfaction can be cured with some accurate market insight (probably not gained from a generic salary guide) and the transparency discussed above.
Pay transparency + clear incentives + accurate market insight = pay satisfaction