Complaint Alleges Gender Discrimination at LeClairRyan

Complaint Alleges Gender Discrimination at LeClairRyan Courtesy photo Michele Craddock

Michele Craddock, a former LeClairRyan partner, has accused the firm of widespread gender discrimination when it comes to compensation and promotions.

In a 32-page complaint filed Wednesday in federal court in Virginia, Craddock, 49, described a firm where an all-male leadership team has discretion to make nearly all policy, compensation and governance decisions. The suit claims that female lawyers rarely reach LeClairRyan’s partnership ranks and are typically not paid fairly.

Craddock, a commercial litigator, now practices at her own firm with John Craddock Jr., another former LeClairRyan partner. Harris Butler of Richmond’s Butler Royals, a lawyer representing Michele Craddock, declined to comment about his client’s case.

In 2015, 31 of LeClairRyan’s 157 equity partners, or 19.7 percent, were women, according to Craddock’s complaint, and few served on firm committees. (Women lawyers accounted for 21.5 percent of equity partners at major firms last year, according to The National Association for Law Placement.)

In an emailed statement, LeClairRyan partner and chief legal officer Bruce Matson said that Craddock’s suit is groundless.

“We are proud of the opportunities that women have at the firm, which has been noted by national organizations,” wrote Matson, noting that legal newswire Law360 listed LeClairRyan among its top 100 firms for women.

But Craddock’s complaint alleges that LeClairRyan’s internal process for referring work unfairly favors men.

“Justification for such action has included stereotyped concerns over a male attorney’s need to support a family,” the complaint alleged. Craddock also claims that decisions about who should receive origination credits, which are awarded to attorneys who bring in clients, disproportionately favor men.

Craddock further alleges that LeClairRyan’s retirement plan favors male partners. In her complaint, Craddock’s attorneys include mention of a supplemental retirement plan offered to LeClairRyan lawyers making more than $350,000 per year for two consecutive years until 2015. Since Craddock claims that mostly men at the firm earned $350,000 a year, her lawyers assert in the complaint that “the gap between male and female shareholders’ compensation was increased.”

The complaint also details Craddock’s own experience at the firm in an effort to demonstrate how discrimination affected female attorneys. The suit states that though she was co-lead counsel on a case that earned the firm more than $20 million in contingency fees for two years of work, she was not properly rewarded.

LeClairRyan’s leaders were pleased with Craddock’s performance, according to her complaint. In 2011, for example, after she secured a $1.15 million check from a client that allowed the firm to exceed its collection goal, the firm’s CEO David Freinberg wrote “You’re my hero” to her in an email, according to the complaint.

Craddock (pictured right) was then told she would be elevated to equity partner in 2012, one year before she met the 10-year practice requirement for the promotion. But in the complaint, Craddock claims she was eligible to be promoted in 2011 because she met requirements that exempted her from that 10-year mandate.

“During her 11-year tenure with the firm, she consistently worked in excess of 2,000 billable hours per year, generated $7.9 million in revenue for the firm from her working attorney collections, originated over $24 million in business for the firm, and received excellent performance evaluations,” states Craddock’s complaint. “Male shareholders with this level of success would be rewarded and valued in compensation decisions.”

Craddock’s complaint, which is similar in scope to another case she voluntarily withdrew against LeClairRyan last year, alleges that when men were promoted to the equity partnership, a $100,000 buy-in was sometimes waived, but not for her. The complaint states that though she asked, LeClairRyan said it would not guarantee her 2013 salary, therefore creating uncertainty about whether Craddock would be able to pay off a Wells Fargo & Co. loan covering her buy-in.

Other issues surrounding Craddock’s compensation arose, and she brought her concerns to LeClairRyan’s leadership and eventually filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission, according to her complaint. At the start of 2015, Craddock said she learned that her compensation would be reduced by about 25 percent, despite her belief that her pay should have been increased. Craddock’s compensation was allegedly less than half that of a male partner she regularly worked with, according to her complaint.

The complaint accuses LeClairRyan of one count of gender-based discrimination under the Lilly Ledbetter Fair Pay Act of 2009, one count of gender-based pay disparities under the Equal Pay Act of 1963 and two counts of retaliation.

Gary LeClair, who co-founded LeClairRyan in 1988, announced in November that he would step down after 28 years as chairman of the firm. In 2014, LeClairRyan took in $150.5 million in gross revenue, while profits per partner were at the bottom of The Am Law 200 at $370,000.

Craddock’s complaint states that LeClair and other senior management members at the firm have “significant financial interests in maintaining the status quo,” and claims that the firm’s founder, Freinberg and Matson are among a group with “soft landing” contracts that guarantee them “significant annual compensation upon” separating from LeClairRyan. Such long-term employment contracts are “in amounts not disclosed” to firm partners, according to Craddock’s complaint.

The suit also alleges that LeClairRyan attorneys can choose more flexible work hours or go part-time by agreeing to a 20 percent reduction in compensation. But Craddock’s complaint claims that female lawyers with “children, family or medical care obligations” are forced to “buy” such status, while male partners at the firm dealing with similar circumstances are regularly “carried” and not pressured into reducing their compensation.

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