Should I Negotiate My Own Severance Package?

Short Answer:  Probably Not.  Keep in mind, an employment lawyer is writing this – I’m biased!

If you are offered a severance and want something more, it is time to negotiate.  Many people hire employment attorneys to negotiate on their behalf.  Others try to do it on their own.  There are advantages and disadvantages to doing it on your own.  Below is a breakdown.

Advantages of Negotiating Your Own Severance Package:

  • It’s free!  If you hire an employment lawyer to do it for you, chances are there is a fee involved.  For what it is worth, my firm, Granovsky & Sundaresh charges a small flat fee plus a percentage of how much we improve your severance.  But pretty much no matter which lawyer you hire, there is something coming out of your pocket.   On the other hand, if you do it yourself, it’s free.
  • It may be the best way to leverage personal equity.  Imagine a situation where an employee has been with a small company for 25 years.  The higher ups in that company probably know about the employee’s personal life, family, etc.  That employee can negotiate for severance based on his or her individual situation and personal equity/goodwill with the company.  “I need it to support my family” may sound more compelling from the employee than from an attorney.
  • It’s fun!  Negotiating is fun.  It is you against the company pushing for more.  It is stressful and exciting, but it can be fun.  Waiting to hear back from your lawyer, on the other hand, is stressful and boring. 

Disadvantages of Negotiating Your Own Severance Package:

  • You don’t know what the heck you’re doing.  Unless you’ve negotiated in the past, chances are you are not a great negotiator.  Common mistakes that people make when they negotiate for themselves include:  making their ask too high and ruining credibility, making their ask too low, and ruining their bargaining flexibility, not realizing potential sources leverage that could increase bargaining power, and, finally, taking a hostile stance which stymies negotiations.  Granovsky & Sundaresh has negotiated hundreds of severance agreements.  We love this, it’s what we do, and we get results.
  • You may take it too personally.  Severance should focus on setting the employee up for a brighter future, not quibbling over the past.  While what happened during employment is certainly important, what matters most is the future.  An employee who was recently let go is often hurting, embarrassed and angry.  These are natural reactions, but these emotions are often counterproductive to efficient negotiation. 
  • Attorneys make you a more viable threat.  The document your company wants you to sign is not just a severance.  It is a severance agreement and release.  The “and release” part is why you are getting severance to begin with.  In exchange for severance (usually money), you are releasing (promising not to sue) the company.  In other words, the company is paying you to go away peacefully and not sue them.  If you hire a lawyer to negotiate your severance, the possibility of you suing the company becomes a lot more viable.  This is especially important if you have potentially viable claims against your company.  Which bring us to our next disadvantage …
  • Attorneys can parse out your legal leverage.  Remember, the company is paying you not to sue them.  Sue them for what?  Often times, employees sign severance agreements and give up viable claims that they did not know they had.  If you consult with an employment lawyer, you can parse out potential claims which an attorney can turn into leverage and then into money in your pocket.
  • Attorneys are awesome.  We get a bad rap, but that’s unfair.  Employment lawyers work hard to protect the working rights of all Americans.  And a good employment lawyer will help to secure you a better severance.  What could be better than that?