Biglaw, Boutique Law Firms, Partner Issues, Small Law Firms

Beyond Biglaw: Closing The Pay Gap

The challenge of closing this gap is an acute one, according to former Biglaw partner Gaston Kroub.

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Blank Lawyer Type Sign or Shingle.There have been a number of articles that have sprung out of the latest report demonstrating a pretty significant pay disparity between female and male partners at large law firms. While various reasons have been floated from the punditry to explain the situation, one theory in particular appears to have generated some traction. According to this line of thinking, large law firms have effectively migrated towards an “eat what you kill” model that rewards origination of client work (similar to the model used at many smaller firms, and of course by all solo practitioners). In contrast, lockstep pay models that reward partners based on seniority have become disfavored, except perhaps at the most elite firms with the deep institutional client relationships that can support such a model.

Under this new pay regime, the theory goes, female partners may be disadvantaged because on average their originations are lower. As Jeffrey Lowe of Major, Lindsey & Africa notes, origination and working attorney receipts have become the main determinants of partner compensation.

“That’s the crux of the issue: Why are men generating more business than women?” Lowe said. “Is there some boys’ club aspect or not?”

I personally am nowhere near an expert on partner compensation, despite my experience as a partner at two large law firms (and now a boutique). At one firm, the compensation system was “closed” so that only the firm executives knew what each partner made. At the other, there was an “open” system where partner salaries were published and disseminated to the entire partnership. Yet even at the “open” firm, it would have been very difficult to tease out — without knowing the underlying numbers for each partner, such as origination, collections, and realization — whether female partners were being systematically paid less for equal production than their male colleagues. While I doubt that they were, I was never in a position to really confirm that assumption. Considering the recent coverage of Biglaw female partners suing to end gender-based compensation discrimination, there is a decent chance that at least some firms engage in such abusive behavior.

While illegal discrimination should never be tolerated, my current sentiment is that partner pay at many large law firms is a broken system — irrespective of gender, and particularly for younger partners. At the same time, I think that Lowe’s question as to whether there is a “boys’ club” suppressing the ability of female partners to originate business is an interesting and important one.

As an initial matter, any Biglaw firm (or firm of any size) that explicitly or implicitly decides to hinder the ability of female lawyers to solicit and retain business is taking a huge risk. Both in the short term, with respect to the likelihood that they are losing out on potential business and courting liability for their discriminatory practices, as well as in the long term, in terms of their industry reputation and ability to retain talented women partners. One would hope that in this age of greater transparency — including through the work of this website — any such “boys’ clubs” have run well past their expiration dates, and will be rooted out by firms forthwith. In light of this pay disparity study, perhaps more law firms should look inward, and evaluate honestly whether or not they are living up to their end of their partnership agreement with their female partners — while making clear that they will embark on corrective action immediately, especially if any bad practices or behaviors are uncovered.

In some respects, a firm working to clean up its own act may be an easier fix than addressing the other potential “boys’ club” implied by Lowe’s question — that on the client side. On the one hand, many corporate legal departments proclaim their interest in spreading their business to female (and minority) partners. But the statistics on origination performance for female law partners apparently tell a different story — or at least those statistics suggest that progress is being made more slowly than perhaps desired. The question then becomes: what can firms and individual partners do to market their female partners better? Presumably there are more female in-house lawyers with “buying power” nowadays as well. So do firms need to market differently to those lawyers, as opposed to their male counterparts? The answers are not so readily apparent, though I suspect any legal marketing department worth its salt or individual business generator is at least considering them.

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The challenge of both supporting female lawyers looking to sell legal services, and effectively targeting female lawyers or businesspeople in a position to purchase legal services, is an acute one. One would think there would be more discussion on this topic — particularly in this age of “gender-based marketing,” where large corporations seeking to sell staple products such as shampoo, or deodorant, or even laundry detergent have moved toward marketing variants of those products directly to members of a certain gender. For example, drugstore shelves are replete with hygiene products “designed solely for men,” and those products are advertised differently than their counterparts that are targeted at women. Yet, I for one don’t really hear much about firms undertaking initiatives to boost the sales performance of their female lawyers, or specifically tailor their marketing towards female consumers of legal services. I am not sure if they should be, but I guess the sentiment in some corners is that action along these lines is warranted.

I can definitely see why law firms may be reluctant to publicly announce that they are considering gender-based sales and marketing initiatives, and that espousing a gender-blind sales and marketing approach may be the best way to avoid any gender discrimination. For example, it is always best for any service business to know its customers, and address their needs with the appropriate personnel — without favoring either gender unless there is a compelling business reason to do so (such as the approach taken by the large product companies, which sell discrete items to address the different needs of their different customers).

At the same time, there is only so much utility that can be gained by generally identifying the problem of lower female partner originations. At minimum, it seems to me at least that this is a good time for a more open and frank dialogue on what both firms and clients can really do to root out any bias, while not sacrificing their standards or patronizing female lawyers who simply deserve the chance to succeed or fail just like their male colleagues. As with any complicated issue, the answers are not readily apparent, nor will there be a single approach that works for all firms, much less all partners, regardless of gender. Of course, for any law firm, the only club worth perpetuating is the one where quality legal work is performed at a price that demonstrates value to the client. When that goal is kept in mind, helping lawyers of any gender flourish becomes a much more likely prospect.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

2016 Partner Compensation Survey [Major, Lindsey & Africa]

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Earlier: From The Obvious Files: Male Biglaw Partners Make More Than Female Ones

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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