How to negotiate your next job on Wall Street
Depending on what kind of offer you're holding, hiring a lawyer may be your smartest move toward accepting - or even bettering - your package.
At-Will vs Contract Employees
If you're on Wall Street earning less than $500,000 (€409,000) a year and haven't yet made managing director, chances are all you have is an offer letter. Don't mistake it for a contract; buried inside that letter is a little sentence that says you can get bounced with or without cause, for minimal or no severance. In other words, you are an at-will employee.
There's not a lot an attorney can do with an at-will offer beyond ensuring you understand what you're getting into (in particular, severance, grants of equity, and noncompetes), flagging the questions you need to ask, and encouraging you to take notes of the answers. 'Even if they're not legally enforceable, notes will be useable if things go bad,' says Laura S. Schnell, a partner at the New York employment law firm Eisenberg & Schnell LLP.
That's not to say nothing can be done to firm up the deal. Sign-on bonuses and guaranteed bonuses are quite common sweeteners. Bruce E. Menken, a partner at New York employment law firm Beranbaum Menken Ben-Asher & Bierman LLP, says his at-will clients have negotiated an early pay-out for guaranteed bonuses as well as promises of three to six months' severance.
A lawyer can suggest how to appeal to an employer's generous instincts. With severance, for example, you can point out that your current job is especially secure or includes a strong severance package. Or, simply note that even though you have no doubt the new job will work out, you need to protect yourself in case the person hiring you leaves.
Sweetening the Contract
Senior and difficult-to-lure employees tend to land employment contracts, which cover a certain number of years. Such agreements are not without peril. Andrew J. Bernstein, an employment lawyer with New York's Pillsbury Winthrop LLP, says, 'What you are getting is an employer-friendly contract.'
Issues your attorney will encourage you to nail down include:
*Takeovers: If your new company changes ownership, you want to get paid for doing the same type of work you signed up for instead sitting out your contract 'upstairs'.
*Noncompetes and nonsolicits: Sometimes you must sign a non-compete, but more common on Wall Street is the non-solicit, in which you promise not to steal ex-colleagues or solicit old clients for a certain period of time. These can run from 30 days to three years. You'll have more luck shrinking the long ones, says Schnell, and in carving out exceptions, such as taking with you any business you brought to the company.
*Cause for termination: A lawyer will help you define and narrow the reasons for which you can be terminated 'for cause' and otherwise. Schnell says, 'Employees at high levels are able sometimes to negotiate a 'good-reason' clause which entitles them to leave under certain circumstances and receive pre-negotiated severance.' Such reasons might include reduced job responsibilities, a change of bosses, a takeover, or relocation.
*Severance: A lawyer will help you pre-arrange to collect as much as possible at the end of the line, including equity as well as unpaid bonuses that give credit for nearly-completed deals.
Bear in mind...
Perhaps unsurprisingly, some recruiters are skeptical about involving an attorney. 'It's an extra set of eyes to look over things,' says Kurt Kraeger, president of the New York office of executive recruiter Robert Walters. But, he says, 'anytime you consult an attorney, they just make you worry more. In this competitive job market, unfortunately, if you don't like it, there may be another candidate that does.'
One thing lawyers and recruiters do agree on: Don't let your attorney negotiate directly. 'It's like a husband or wife getting a prenup,' says employment lawyer Menken. Thrusting your attorney into the dialogue can chill things with your boss, just as too many demands can make a job offer go away.
Good advice isn't cheap-but sometimes it's free
In New York, expect to pay around $350 an hour for an experienced employment attorney. Figure on 10-20 hours for a contract negotiation, and one to two hours for quick feedback on an offer letter.
On Wall Street, companies increasingly foot the legal tab for senior executives, says Pillsbury Winthrop's Bernstein. Another lawyer reports that a large bank recently agreed to pay legal fees up to $7,500. Don't be afraid to ask for similar consideration.
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