The Counteroffer by Pete Meyers

You’ve probably heard of the no-counteroffer rule: If your firm gives you an offer at the end of your 2L summer, don’t counteroffer. If you do, the firm may not accept your counter, and there goes your job. I got an offer and I countered. Here’s my story.

After my on-campus interviews failed to yield an offer I felt fortunate to get a summer job at a small law firm. Connections I’d made through the one law school association I belonged to opened the door for me.

It was a general practice firm, so the work assigned me was diverse. In the first few weeks of the Summer of 2004, I was on the brief in a Defense of Marriage Act case that went to the state supreme court and is still pending. On another assignment, I examined eighteen file boxes of personal documents and financial memoranda that our client had seized in a judgment. The documents revealed several smoking guns on a collateral matter on which we were working. I was doing law work, like an amateur maybe, but real law work just the same … not just papers and tests.

Every morning I was excited to be there and I worked hard and carefully, trying to prove myself. At one point I asked Senior Partner if I could do any work for him. He said he mainly did negotiations and couldn’t really use my help. Eventually, I was able to work for all the attorneys in the office, except Senior Partner.

At my exit interview Hiring Partner told me that I’d hit the ball out of the park. I came in earlier than anyone else and left later. Hiring Partner intimated that Senior Partner’s assistant would soon call with an offer. Things were going exactly as planned!

A month later, I sat in the Senior Partner’s office, anticipating my offer letter. I told him what a great summer I’d had at the firm, how much I’d learned, and so on. He reached across the desk and handed me the offer letter. Eager to see the terms, I read it quickly. I expected the salary to be on the low side, but not this low. This was very low—much lower than what I expected to be paid! For as hard as I knew I would work, I imagined myself making more than this. No, this was too low. If I wanted to be paid like a county prosecutor, I would be a county prosecutor.

I suggested to Senior Partner that he’d undervalued me. He didn’t seem offended, but said that he couldn’t pay me any more because of the stair-step salary structure of the twelve attorneys who would be ahead of me. If he raised my salary, he’d have to raise everyone else’s. “Besides,” he said, “we are a firm of low expectations.” It was true; the minimum billable hour requirement was only 1,620 per year. Still, I doubted his expectations of me could be as low as this salary offer. This offer was really low!

I thanked him for the offer and told him I’d carefully consider it over the weekend. On the way home, I decided I had nothing to lose by asking for a “more competitive” salary—one I thought I was worth. To further my case, I would offer to provide additional services to the firm that would not normally be expected of a 1st year associate. I thought there might be a brief negotiation, and I realized they might withdraw the offer. But I couldn’t believe they’d actually withdraw the offer, so I put that idea out of my head.

During the offer meeting, Senior Partner had admitted that the firm lacked rainmakers. So in my letter, I offered to do some rainmaking in areas where the firm needed help. I’d done business development in previous jobs and wanted to offer my skills as a way of advancing the interests of the firm. Also, I’d lived in the city for several years, and I was well connected. I know how to sell.

I knew it might be perceived as unusual in a law firm to negotiate like this, but I thought I was dealing with businessmen. I thought the worst that could happen was for them to say: “No, here’s the salary; take it or leave it.”

The no-counteroffer rule means that law firms don’t have to compete directly on salaries of first year associates, regardless of their experience, because there’s no pressure to raise a candidate’s salary if there’s no upward pressure on that salary from a competing offer. But, when a 3L has more than one offer, she can freely break the rule. Even if she counters firm A and the firm does not accept her offer, she’ll always have the other open offer from firm B to accept. However, I have heard a story about firm A telling firm B that a candidate had countered. Firm B quickly withdrew its offer and the candidate was left at the mercy of firm A.

The rule works well for law firms. They can choose from an apparently homogenous pool, like a graduating class of law students, all equally qualified on paper. Most went straight to law school from college or university and all are equally lacking in the kind of knowledge that comes from real-world job experience. The rule also works very well in a tight labor market, as ours was.

The Career Services office at our school promulgated an exception to the no-counteroffer rule. If you don’t get an offer through on-campus interviewing, the no-counteroffer rule doesn’t apply. They reasoned that if the student leaves the protective comfort of the campus to find employment, counteroffers may be freely made. In fact, a little back and forth between candidate and employer is expected. My summer firm had not made an appearance at our on-campus interviews, so I assumed the exception applied.

I wrote the Senior Partner counteroffer letter, expressing with confidence that his offer was low for the market. I said I understood the firm could not raise my salary and suggested a bonus schedule based on my success in bringing new business into the firm. I explained how hard I had worked in previous jobs and in law school and told him I would work as hard for him. I emphasized my enthusiasm at the prospect of joining the firm.

A few days later I received a letter from Senior Partner withdrawing the firm’s offer. I was flummoxed. This could not be happening. Why would he withdraw his offer when I offered to do so much for the firm?

At the end of the letter Senior Partner requested that I call one of the junior partners after reading the letter. So I called Junior Partner and received a lecture on the error of my ways, and he explained how to redeem myself in the eyes of Senior Partner. He told me the firm’s problem with the letter was not so much the counteroffer itself as the brazenness of the attempt. “You were telling us,” he said, “that we’re a bunch of knuckleheads.” In his mind, my letter accused them of not knowing the labor market, having a weak stable of clients, and not knowing how to run a law firm. In my mind, the letter was about how I could further the interests of the firm by engaging new clients without cutting into my billable hours.

Junior Partner said that if I had any interest in the firm reviving the offer, I had to meet with Senior Partner again. By this time I’d decided that I didn’t want to hit the job market again. But I decided that if they did revive the offer, I would stay at the firm for only a year or two and then move on to a better-paying firm that had higher expectations.

Senior Partner began the meeting in a direct manner by asking: “What made you think you could negotiate?” I was taken aback at his harshness. He came across like Jack Bauer interrogating a terrorist in an episode of 24. Could it be Senior Partner thought I was a terrorist? I told him the firm made me a job offer, so I countered with what I thought were more attractive terms for both parties. Hey, let’s negotiate! But the deeper issue was, of course, that the firm was offended that I’d countered. I offered the exception put forth by the Career Services office, but he told me to tell whoever back at Career Services that there was no exception. Something much deeper was at work here, something so fundamental to this firm that it amounted to a per se rule.

As the meeting continued, Senior Partner went on about “you law review types are so cocky” and “in my day I would never have done what you did.” I felt like a teenager again, being chewed out at length for a minor offense. My face got hot. This treatment was not right in a business context. I was a candidate, not a school boy. Junior Partner then turned to me and said, “Did Hiring Partner tell you that you hit it out of the park?” I said, “Yes, he did.” Junior Partner said, “Hiring Partner denies ever having said that.”

Six months later, during a bar exam review, the lecturer for contracts offered a simple but memorable line of reasoning to illustrate the potent effect of a counteroffer. “A counteroffer kills,” he said. “When you make a counteroffer, the original offer is by law dead and cannot be revived.” It wasn’t my calling Hiring Partner a liar that was being called into question. In a legal and literal way, my counteroffer killed their job offer.

But why such an overreaction on the firm’s part? Was this behavior typical of law firm culture generally? Would another firm have behaved this way? That the Hiring Partner would tell a lie in order to bolster the case against me was eerie. I think part of it was the firm’s inability or unwillingness to distinguish among candidates who were outside the bell curve. They simply wanted an entry-level attorney. Given their collective shock, I guess that hearing a candidate for an entry-level attorney’s job make suggestions about the firm’s business probably did seem cocky to them. In retrospect, I made a tactical error by not asking in the offer meeting with Senior Partner if the firm would entertain a counteroffer.

If I had asked that question, I might not have been writing this column. Happily for me my experience has allowed me to write this column, and my story took a turn for the better. In next month’s newsletter I’ll explain how, despite my counteroffer catastrophe, I was able to rise from the ashes and moved on to receive a better offer, thanks to some careful networking.