Is the Law Firm Leadership Track Fair?

Beauty and successBy Melissa J. Anderson (New York City)

The National Association of Women Lawyers and the NAWL Foundation have released [PDF] their 7th annual report on women in top law firms, and the numbers are similar to what we have seen before. Too similar, in fact. The percentage of women equity partners is only barely 15 percent and the number of women non-equity partners is only 26 percent. Similarly, women only hold 20 percent of governance committee roles, and only four percent of firms have a female managing partner.

“We are disappointed that women lawyers are still not reaching the highest levels of big firm practice or leadership in significant numbers,” said NAWL President Beth Kaufman, Partner at Schoeman Updike & Kaufman LLP in New York.

The study polled AmLaw 200 firms to examine the differences in pay and promotion between men and women lawyers. And, in fact, women are earning less than men at every level, with the biggest gap at the equity partner level (89 percent). NAWL identified that one potential reason for the discrepancies between men and women concerning pay and promotion may be the pipeline and a rigid structure of advancement at many law firms.

In a profession where rapid advancement up a tightly-defined ladder is the standard path to prestige, women are often pushed out of leadership. “The Survey has repeatedly found that law firm structure has important effects on women’s career paths,” said Barbara Flom, author of the report and Secretary of The NAWL Foundation.

Flom believes that by changing the rules of the advancement system (or rather, creating more paths to success within the system), women would benefit significantly. And so would firms, which would reap the rewards of greater leadership diversity.

Pipeline Disparities

The study revealed disparities setting in as early as the associate level. Women make almost the same salary as men (99 percent) – but, the study says, “when it comes to bonuses, a disparity emerges: women constitute nearly 45% of the associate pool, yet they receive only 40% of the bonuses.”

Women also work fewer billable hours than men – 1,789 compared to 1,814. The reasons for the disparity aren’t clear, NAWL says, but could be the result of a number of factors. Perhaps women devote more hours to CLE or professional development training than men. Or perhaps women do more in-firm work than men (like participating in the leadership of their women’s network). On the other hand, perhaps there is an unfair bias in the way work is being assigned to women and men (a phenomenon know as performance-support bias).

But that’s only the beginning of the differences between male and female lawyers. According to the study, there are significantly more women in staff roles than men – women make up 70 percent of this group. Additionally, while there are similar numbers of women and men in counsel roles, men in these roles tend to be closer to the retirement, working part time, while women in these positions tend to be at an earlier phase of their careers.

The proportion of women at every step up the ladder decreases, and women make up only a small fraction of the top layers of law firms. “The typical AmLaw 200 firm is now a two-tier partnership with many different categories of lawyer in a leveraged structure: 151 equity partners (barely 15% women), 91 non-equity partners (26% women), 54 counsel (35% women), 188 associates (46% women), and 11 staff attorneys (70% women).”

The percentage of women equity partners (now 15 percent) has dipped in recent years, the study notes. And women only make 89 percent of what men make at this level (despite having a higher percentage of their compensation based on their billing – 63 percent for women, compared to 57 percent for men). Flom also expresses concern about the disparity in the proportion of women in non-equity and equity partnership roles, as well as the relatively higher proportion of women in fixed-income equity roles.

“Overall, in a typical one-tier firm, women constitute 21% of the equity partners while in the typical two-tier firm, women make up only 15% of the equity partners,” the she writes. Non-equity and fixed-income equity partners do not have the same prestige or power over firm operations as those in equity roles, NAWL explains.

The report notes that while many women choose staff attorney roles or counsel roles to accommodate their personal or family responsibilities, they shouldn’t have to. “Our ideal would be that, as more women entered big-firm legal practice, the standards and expectations would evolve to be more accepting of all women’s lives and goals – not to slot more women at the lowest, non-partner track position.”

Similarly, when women wind up in non-equity or fixed-income equity positions, they may do so because such a role may be less disruptive of their family responsibilities. If the path to power at law firms were fair and sensible, Flom contends, that concession would be unnecessary.

The lack of women in these top roles also means firm governance is less likely to represent the needs and values of all employees at each firm. Additionally, a scarcity of female leaders can make it more difficult for junior women lawyers to climb the ladder. Flom writes, “The message – whether or not intended by those in power – is clear and simple: ‘You do not belong here.’”