Gender Pay Gap Remains an Issue

September 2010Articles Philadelphia Bar Reporter

Women equity partners earn, on average, $66,000 per year less than their male counterparts. With such a compensation gap between genders, the American Bar Association Commission on Women in the Profession, the Minority Corporate Counsel Association (MCCA) and the Project for Attorney Retention conducted an in-depth national survey of women partners to assess what women think, say and feel about their compensation.

Veta T. Richardson, executive director of MCCA, presented the results of the survey at a recent meeting of the Women in the Profession Committee, together with Roberta D. Liebenberg, chair of the ABA Commission on Women in the Profession.

Fee collection, billable hours and client origination were identified by the survey as the key factors that determine promotion to equity partner, compensation and bonuses. Cross selling and client matter expansion were also deemed important. Deemed not important in determining compensation were pro bono, community service, serving on professional development and diversity committees and associate development. Although many law firms tout these committees and efforts to promote themselves to clients and in recruitment, these efforts do not affect compensation. These committees and roles are often occupied by women who feel determined to contribute to the health of their organization, even though such efforts do not yield a payoff.

Almost all firms have a point system based upon client origination to award compensation, with an annual re-evaluation of the points assigned to each equity partner. The assignment of points is done by a compensation committee typically consisting of five-to-eight individuals, seldom including any women and/or minorities. Getting a seat on the compensation committee is usually by election by the partners or appointment by the law firm chair/managing partner. Seven percent of the women partners surveyed did not know how to get a seat on the compensation committee as such selection was completely subjective.

After compensation is determined by committee, most firms do not have an appeals system. But, in the firms that do allow appeals, more than two-thirds of the women surveyed responded that they would not feel comfortable challenging their compensation.

More than half of the women surveyed revealed that they had been denied their fair share of origination. Minority attorneys were even more likely to be denied origination credit. Any disputes over origination typically are addressed by a firm’s compensation committee, where women and minorities are severely underrepresented. Even when there is a woman or minority on the committee, that individual’s voice is usually marginalized due to lack of en masse support, which prevents a person’s meaningful input.

With 400,000 baby boomer attorneys (mostly men) preparing to retire, the survey also assessed how lawyers inherit origination from retiring partners. In most firms, the retiring attorney chooses a successor. Only 6 percent of firms assign the task to law firm management; and only 2 percent of firms ask the client.

Thirty percent of the women surveyed reported being subject to threats, intimidation and bullying over origination and allocation disputes; and 39 percent were dissatisfied with how such disputes were handled.

The results of this survey will be used by MCCA and the ABA Commission on Women in the Profession to develop a strong set of recommendations for law firm best practices in determining compensation, which will include the development of transparent compensation policies. MCCA is also reaching out to female in-house counsel and general counsel to educate them on how client origination works so that they are aware that they can impact who receives origination when their relationship partner retires.

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