Deal Maker: Negotiating Your Rate for a Contract Position

Congratulations! You have just been offered the contract role that you were hoping to land. The job, hours, and location are a seamless fit for your skill set and life. It is the perfect position... almost. The only thing giving you pause is the pay rate. So, what do you do?

You have the liberty and power to negotiate your rate with an employer— but that does not mean the process is free of awkwardness or that missteps from both sides can hurt the relationship. Still, this can be a meaningful discussion that can build a stronger relationship and ensure that the role and client are right for you.

However, before proposing the first number that pops into your head, consider all the factors. What is your experience level? What is the nature of the role? How many hours a week are you expected to complete? Demanding compensation that does not fit the work—or the market for that work—can hurt the relationship you are trying to build or cost you the opportunity. At the same time, a potential client who is being unreasonable about rates can be a red flag for you that may provide valuable insight into whether the role and client is an opportunity that you want to pursue and a relationship that you want to build for future work. It is important to balance and understand what is reasonable for the market and the pressures your client faces (e.g., the rate sensitivity they face from their clients or legal department budget) versus an unreasonable request.

We’ve got you covered. Here are 7 important things to consider before deciding to negotiate your rate for a contract position:

1. Do your research on market rates.

• If you have a Hire an Esquire account, you can use our estimate tool. This considers your skills, years of experience, and location, to provide a recommended rate.
• Phone a friend! Do not be afraid to ask trusted sources in your network who are similarly situated in expertise and experience.
• Check the internet to find average market rates (but with a grain of salt).

2. Create a quick chart for yourself based on these factors.

The following factors will increase rates:

• Low or sporadic hours
• Niche or in demand work
• Work that is compensated as a 1099 Independent Contractor (Do not forget to account for additional self-employment taxes and costs that you will have to pay)

The following factors tend to decrease rates:

• Less experience required
• A glut of lawyers in this practice area/ an area of law that has seen a downturn
• Full-time, steady hours and a W2 classification where the client is taking on an additional tax and cost burden for the work

3. Make a little wiggle room. Have your preferred rate prepared according to the above, but keep in mind that you may need to be flexible. Negotiation can only go so far if you are not open to counter offers.

4. Do not apply to a lost cause. Not all jobs are a perfect match. If a job is posted and the rate is significantly lower than you would accept, if you still wish to apply, keep in mind you may not get much higher pay than is posted. Do not waste your or the job poster’s time by applying to a role that realistically cannot be negotiated to a rate that you find reasonable.

5. Be transparent. Let the hirer know, “My rate for this kind of work is generally $X.” If you have flexibility, do not try to hardball, but do start with the number you prefer and work down from there.

6. Know when to walk away. Have a number in mind that is your dealbreaker. Having a set standard for yourself and knowing your worth will make job searching and the negotiating process easier for you.

7. Be respectful and kind. A negotiation may not work out in the moment, but if you’re the best candidate for the job, the job poster may come back later and give you the rate you were asking for or another opportunity may arise where their end client isn’t as budget conscious, and they can afford to pay your rate. While you should be ready to end conversations firmly and politely where the opposing party is being disrespectful, try to give people the benefit of the doubt. Remember that your potential freelance client is under market pressures from their clients and the financial constraints of running a business. If you are working for a law firm, they are taking the risk of unpaid bills and written off hours from their clients and their intent is most likely to make their business viable, not to nickel and dime you.

Following these tips will help you to land the right type of freelance opportunities for you, and to build strong, respectful relationships for immediate and future opportunities.