How to determine an interim market rate for in-house lawyers

oktober 22, 2024

Factors to consider when calculating your hourly rate
How to benchmark interim market rates for lawyers
Market dynamics and trends
Benchmarking day rates for interim or consultancy work
Day rate vs. fixed term contract
Taylor Root In-house interim & consulting specialists

If you’re contemplating interim legal opportunities for the first time in a while, you might be considering how to best calculate your market rate. The key to ensuring that you’re paid fairly depends on two factors:

1. Your years of experience or what your last assignment paid

2. The market rate of the job you are applying for

In interim roles, your skills and experience are crucial, but each position comes with its own unique demands and rewards. Understanding the market rate for an interim or temporary position goes beyond just the responsibilities—it considers factors like contract length, project scope, working conditions and industry expectations. For example, a role requiring more in-office time or longer hours may offer a higher rate, while one with greater flexibility or long-term security might offer less but comes with added personal benefits, such as a better work-life balance.

In skill-short markets, in-house interim lawyers can command higher rates due to their in-demand skills, the immediate need for expertise and the temporary nature of their roles. Companies may be willing to pay a premium for candidates who can step in and deliver results quickly, especially in high-stakes situations.

Conversely, in more subdued markets with fewer permanent opportunities, interim positions are typically offered at lower rates, as the wider pool of available candidates can reduce the competitive demand for these roles.

Factors to consider when calculating your hourly rate

When evaluating interim opportunities, it’s important to think about what truly matters to you. Some may prioritise immediate compensation, while others may value flexibility or a shorter commute.

Ask yourself what you’re willing to trade, whether it’s time, money, or specific working conditions. Sometimes, an interim role that pays slightly less could provide the chance to build new skills or gain experience that leads to better long-term opportunities.

Key questions to ask yourself

What does the job offer beyond the daily rate?

Are there benefits like flexible working arrangements or opportunities to expand your network or skills?

How will this role impact your quality of life?

Does it support your work-life balance, or could it lead to stress or burnout?

Does this assignment align with your career goals?

Will it help you grow, even if the rate isn’t as high as expected?

What is the market rate for this specific job?

Knowing the market rate ensures you’re positioning yourself competitively and getting fair compensation for your expertise. Do your research to gauge the rates for similar roles in similar market conditions.

While flexible roles may offer slightly lower pay, they often come with additional advantages like enhanced work-life balance or professional growth opportunities—so it’s essential to consider the full package, not just the salary.

How to benchmark interim market rates for lawyers

To effectively determine the current interim market rate for lawyers, consider the following methods:

Market research: Utilise legal recruitment agencies, job boards and professional networks to gather data on current rates for similar positions.
Networking: engage with peers in the legal community to gain insights into their rates and experiences.
Industry reports: look for published salary surveys and reports that provide comprehensive data on legal compensation trends.
Consultation with recruiters: speak to legal recruiters who specialise in interim placements; they can provide tailored advice based on market conditions.
Job listings: review job postings to see the salary ranges offered for similar interim roles.

Market dynamics and trends

The interim legal market is evolving and recovering well, following a challenging 2023. Interim roles are gaining a newfound respect, with high-quality candidates increasingly available. The market is shifting towards flexibility, with many lawyers seeking fractional General Counsel positions, which is particularly appealing to startups and scale-ups.

Read our latest in-house market update.

If you’re considering an interim legal role, recognise the opportunities this evolving landscape presents, including the potential for diverse work arrangements that can accommodate personal commitments.

In the UK, it is important to understand IR35 regulations and consider both day rates and fixed-term contracts when pursuing interim roles. Recruiters can facilitate the onboarding and compliance processes, making it easier for you to enter the market. With a focus on agility and work-life balance, interim roles are becoming an attractive option for those looking to enhance their careers while enjoying flexible working conditions.

Watch: Interim legal recruitment market update

Benchmarking day rates for interim or consultancy work

Although daily rates can vary significantly between assignments, fixed-term contracts, including many parental leave cover roles, often align more closely with permanent salary levels. Taylor Root’s global in-house salary guide provides valuable insights to help navigate and assess appropriate compensation when considering a fixed-term contract salaried position.

What factors affect the decision to appoint via day rate or fixed term contract?

Understanding the difference between a day rate and a fixed-term contract is crucial. A day rate is a specific amount you charge for each day worked, providing flexibility and often a higher hourly equivalent. In contrast, a fixed-term contract offers a set salary over a predetermined period, providing more stability but often less potential for negotiation on total earnings.

The decision to use a day rate versus a fixed-term contract for interim legal resources depends on several key factors:

Duration of the assignment: short-term needs often favour day rates, while longer assignments may warrant fixed-term contracts

Nature of the work: projects requiring immediate expertise or flexibility typically align with day rates, whereas more structured roles may fit fixed-term contracts

Budget constraints: employers with tight budgets might prefer day rates for flexibility, while fixed-term contracts can provide a clearer cost structure for longer engagements

IR35 regulations: compliance with tax regulations can influence the choice – fixed-term contracts may be seen as more compliant in certain situations

Onboarding and integration needs: roles that require a swift start often benefit from day rates, as candidates can begin immediately without lengthy onboarding processes

Summary

Remember, accepting a short-term contract at a lower rate than you’ve earned before does not define your market value for future roles. Ultimately, when considering your market rate for an interim or temporary role, think about the bigger picture and what truly matters to you. Compensation isn’t just about the pay check—it’s about the complete package the role offers.