this product is unavailable for purchase using a firm account, please log in with a personal account to make this purchase.

Human Resources: How much is enough?

Every Issue

Cite as: (2007) 81(6) LIJ, p. 93


Pay scales in the legal profession vary enormously and it is often difficult for employers to know how best to remunerate staff.

Unsurprisingly, the most common question received on the Law Institute of Victoria (LIV) human resources advisory line relates to wages.

The question of “how much?” baffles organisations, large and small.

Some of the big firms employ “remuneration specialists” to solve the question, but for smaller firms which have to go it alone there is a range of items to consider.

First, begin by figuring out the minimum amount a person should be paid. In the legal industry, this information is generally contained in two places:[1] 

  • the Victorian Legal and Clerical Award, which generally covers legal support staff; and
  • the Property and Business Services Sector wage order for “fee earning employees”.

For support staff, the minimum depends on the classification of the employee under the award (based on skills and duties). These range from $528.46 for a level 1 legal clerical assistant to $749.56 for a law clerk.

For a lawyer, whether or not they have been admitted for one year or five, the minimum is $610.94 per week across the board. However, your fourth-year commercial lawyer is not going to be happy with $610.94 per week.

Therefore, the next step is to work out what the “going rate” is.

The “going rate”

Salary surveys are a good indication of current salaries in the employment market.

Both Michael Page and Mahlab[2] release a yearly survey for the legal industry. These surveys give you an idea of what the market rate is for a lawyer, and look at factors such as a lawyer’s level of experience, the size and type of firm, the industry and the area of specialisation.

Chandler Macleod[3] releases a yearly survey for administration and support staff. Although this does not particularly relate to the legal industry, it gives a good indication of what the going rate is across the board.

Other facts to consider

Salary surveys only provide you with a rough sketch of the market, and often indicate a salary range.

Deciding where someone sits within that salary range means considering their previous experience, the complexity of tasks they will be performing, whether they have a specialist or critical skill that is in demand and of value to your business, and their level of responsibility and accountability.

However, instead of just thinking about how much they are “worth”, ask yourself how much value do they, or will they, add to your business.

This will mean exploring their billing history (how much revenue they can generate), how critical they are to your operations – for example, if they leave will they be easily replaceable, or if they are not employed by your business, will you suffer considerably financially?

When you figure out how much value an employee adds and compare this to your budget or financial capability, hopefully you will be able to find a price you are able and willing to pay.

Smaller firms or sole practitioners who may not have the financial resources and have to pay employees at the minimum, or below the going rate, may have to be more inventive in how they market and package themselves. They can do this by looking at areas where they can add value to a person’s employment.

Tips and tactics: adding value to employment

Work/life balance

Many people decide to accept or remain in a job, even if the salary isn’t high, simply because it suits their lifestyle and they find value in other perks. This is particularly true today with an increased value placed on things other than pay. A key example is work/life balance.

This can mean such things as having the flexibility to work from home, being able to alter their hours so they can go to the gym in the afternoon or pick up the kids from school, starting late, working close to home, etc.

Career development

Some employees will see career development and learning opportunities as a trade-off for a higher salary.

This may be attractive for an employee who can see the long-term benefits of these learning opportunities, with a view that a higher salary can be achieved after this experience has been gained.

Usually this is a short to medium term trade-off, unless you can accommodate an employee’s growth and salary expectations as they advance in experience and skills.

If you decide to undertake this strategy, make sure you deliver on your promises, unless you want a turnover problem.

Salary packaging and benefits

Many firms are able to make a salary package attractive by adding benefits such as a company car, mobile phone, car park, salary sacrificing and corporate discounts. These kinds of benefits play a large role in staff retention.

Bonuses and incentives

Establishing a financial reward system or bonus scheme is a way of being able to pay top performing staff what they’re worth. It’s a win-win situation – ensuring staff remain motivated and happy, as well as ensuring you a return on investment.

Probationary salary

If hiring a new employee and you are unsure of whether they will be “worth” the amount they are insisting on, you may consider offering them a lower but reasonable rate, and specifying in a written contract that if they meet certain performance standards, their salary will be increased to an agreed amount.

This gives you the opportunity to “test the waters”. If an employee follows through on performance, return the favour by holding up your end of the bargain.


This column was contributed by LIV HUMAN RESOURCES. For further information on this column and other HR issues ph 9607 9548.


[1] See http://www.liv.asn.au/members/hr/ratesofpay/ratesofpay-Minimum.html.

[2] See http://www.careers.liv.asn.au/content.asp?contentid=13.

[3] See http://www.chandlermacleod.com/2006%20Chandler%20Macleod%20Salary%20Survey.pdf.

Comments




Leave message



 
 Security code
 
LIV Social
Footer