Rikleen Institute LLC

Solving the Law Firm Gender Gap Problem

August 20, 2013

This blog post originally appeared in Harvard Business Review. To view the full blog post, click here.

Decades of studies have demonstrated that male law firm partners earn considerably more than their female colleagues. Even when data is controlled for such variables as billable hours, origination, seniority, and law firm size, the gender gap persists. And yet women have been 40-50% of law school students for decades. This is not a pipeline problem; this is a discrimination problem.

The Gender Equity Task Force of the American Bar Association (of which I am a member) was created to recommend ways to eliminate gender bias in the legal profession, with a particular focus on the disparity in compensation between men and women partners. This month, we released several publications to help eliminate this gap, including one that is directed to law firm leaders, Closing the Gap: A Road Map for Achieving Gender Pay Equity in Law Firm Partner Compensation, of which I was the principal author.

As the report details, the roots of pay inequity run deep. The easy answer — that women earn less on a comparative basis because of the impact of their family responsibilities — is simply wrong. Women earn less because of the complex interplay between compensation system factors and the effects of unconscious bias in that process.

Moreover, the axiom that "compensation drives behavior" permeates the ways in which partners seek credit for business generation, a key factor in most law firm compensation systems. Often, that behavior includes active efforts to exclude their colleagues from sharing in that credit. Compensation committees are generally reluctant to use their authority as a tool to combat this problem and create a more level playing field. This allows unconscious biases to thrive.

Closing the Gap proposes recommendations that can be incorporated into any existing compensation system to eliminate the barriers that stand in the way of equal pay for female partners. Moreover, adopting these measures would not just help women — it would result in a fairer and more transparent compensation process for all. Some of these recommendations include:

 

  • Ensure there is a critical mass of diverse members on the compensation committee. Research demonstrates that the presence of only one or two women on a decision-making body can lead to marginalization of the minority participants. Further inducement for this recommendation can be found in studies that show companies with more women in key leadership roles and board positions out-perform their competitors.
  • Develop systems to promote fair and accurate allocation of billing and origination credit. To quote from the report: "The current 'underground' system for the allocation of credit for various roles in client origination, service, and retention that exists in so many firms today is a major impediment to achieving compensation equality." Equitable compensation cannot be achieved without systems that discourage client hoarding, promote cross-marketing among practice groups, and incentivize partners to share credit fairly among those who help attract and retain clients.
  • Implement formal client succession protocols. Women partners in law firms are frequently excluded from the inheritance of client work from senior partners who retire and pass their client relationships to younger male colleagues. Client management in a sophisticated business should not be subject to individual lawyers making decisions about client credit and succession. This practice is also not in the best interests of clients who should have a role in deciding which lawyers will have this important — and financially rewarding — role in the future.
  • Develop a process to resolve allocation disputes promptly and equitably. Research demonstrates that female partners are frequently excluded from credit allocation, and have even reported being bullied and intimidated. Firms should create a diverse oversight committee to review and resolve credit disputes, ensuring transparency and accountability in the process.
  • Implement training for all involved in the evaluation and compensation process. Unconscious bias can skew our judgments of others. Training can help individuals recognize their own biases and can help organizations put in place systems to help override the effects of these biases.
  • Engage the client in gender equity. Clients have a tremendous opportunity to use their economic power to ensure diversity on their matters and the fair allocation of credit for their work. Law firms should welcome their involvement as part of a client retention strategy that can also help close the gender gap.

 

Law firms will better survive the difficult economic climate by ensuring a culture where economic growth and inclusive opportunities are linked through engaged leadership and transparent systems. Then we will see the equal opportunities that women have long sought in the profession.