Let’s talk numbers!

Over the years of working part-time, I’ve learned how to translate between an annual salary with benefits and an hourly rate so I can keep an eye on wages. I’ve had to start at the bottom a couple times when accepting jobs at new firms, but over time, my rate increased as the firms got to know me and the quality of my work. Also keep in mind that there’s more to income than your salary. I’ll talk more about benefits in future posts, but for now, let’s do some math…   

Calculating an hourly rate based on a full-time salary

If you’re already working full-time, you can calculate a comparable part-time hourly rate by dividing your annual salary by the number of billable hours the firm requires.

For example, if a lawyer with your experience would typically make $145,000 a year for billing 1800 hours annually, that means the salary is equivalent to about $80 per billable hour:  $145,000 ÷ 1800 = $80.56.  So, a reasonable hourly rate to request might be $80 an hour.  Important: As discussed below, you may need to adjust the rate upward if you will no longer qualify for benefits that would be included with a salaried position. 

Taking benefits into account

If you will no longer qualify for health insurance or other benefits, you might want to bump up your hourly rate to make up for the difference.

Continuing with the $80 per hour example, if your health insurance will cost about $600 per month, that totals $7,200 a year. If you plan to average 25 billable hours a week, you could cover that cost with an additional $6 per hour:  $6 x 25 hours x 4 weeks a month =  $600 x 12 months = $7,200.  So, you could request an hourly rate of $86 an hour. 

Calculating an annual salary

The same formula above can be used in reverse to find out if an hourly rate offered to you is reasonable. Let’s say a firm offers you $45 an hour for a part-time position, and they typically require their full-time lawyers to bill 2000 hours a year. By multiplying these numbers, you can determine what the full-time salary would look like: 2000 hours x $45 an hour = $90,000. You can research whether that would be a fair market value for a lawyer with your skills and experience in your area of practice. And don’t forget to think through the cost of benefits.

Take heart!

If you are changing jobs or re-entering the workforce after a break, a firm may offer a lower hourly rate than what you would like. Don’t be discouraged if you’ve done your best to negotiate and they won’t budge. View it as a starting point and a way to get your foot in the door. When I went back to work after staying home with my kids for a year and a half, the job I landed was temporary with a low hourly wage. Once they got to know me and my work, the temp job soon became permanent, and the raises kept coming. They eventually added health benefits to the package to keep me on board. (Positive client feedback on your work goes a long way!) 

Even if you’re not happy with the initial offer, you can ask during negotiations that your hourly rate be revisited, such as 3 to 6 months down the road and annually. Once they get to know you and see your value, it’s likely your rate will increase because they will not want to lose you.

How do you measure flex pay?

If you have a different method, I’d love to hear about it!

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