Awareness of the gender pay gap among law firm partners may be rising, thanks in part to a number of high-profile lawsuits. But the pay gap itself?
It may be getting worse.
That’s the lesson from a new partner compensation survey out Thursday from Major, Lindsey & Africa. The legal search firm found that male partners are earning $959,000, on average, at large U.S. firms, compared to $627,000 on average for female partners—a 53 percent difference.
In 2010, the first year the biennial survey was conducted, that gap was only 32 percent, and in subsequent years it has fallen between 44 and 48 percent.
Study author Jeffrey Lowe, global practice leader of Major, Lindsey & Africa’s law firm practice, cautioned against drawing a stark conclusion that the trend is worsening, noting that the 1,400 to 2,000 partners who have responded in the five iterations of the survey are not fixed. (Survey respondents hail from Am Law 200 and similarly-sized firms across the United States.)
“There could be some response bias,” he said.
But the results do suggest that the problem is not going away, even after firms including Proskauer Rose, Jones Day and Ogletree, Deakins, Nash, Smoak & Stewart have been sued over their imbalances in partner compensation.
The study pins much of the gap on originations. Male partners reported average originations of $2.788 million—a gain of 8 percent over 2016. That compares to $1.589 million for female partners—a decline of 8 percent from 2016.
A statistical analysis of the data, controlling for gender and originations, demonstrated that 75 percent of variation in compensation among partners can be explained by originations and hourly rate and that gender by itself did not have a statistically significant impact on compensation.
“There is definitely a sense, as the report has shown in the last four surveys, that originations tend to direct compensation at most, if not all, firms,” Lowe said. “And there’s a feeling among women partners and partners of color that the ability to achieve these originations is more difficult for them.”
He pointed to the relative shortage of mentorship opportunities for members of these groups, as well as the relative absence of people like them to hand down lucrative client relationships.
Another potential explanation for part of the difference is the persistence of unconscious bias that may direct women towards less remunerative practices like labor and employment.
The 2018 study, which was conducted in partnership with legal market research specialist Acritas, for the first time included a focused set of questions on the gender pay gap. Asked whether a gender pay gap was present in their firms, 28 percent of the 1,261 responding partners said yes. Of these, men were far more likely to minimize the effect than women: Only 3 percent of women thought it was 10 percent or less, compared to 21 percent of men. Conversely, 35 percent of female partners believed the gap in pay exceeded 20 percent, compared to 13 percent of male partners.
The response among law firm management to the imbalance has been muted, according to the study, with only 23 percent of 1,248 partners saying their firm management has addressed the possibility of a gender pay gap. Of those respondents, 60 percent said the issue has been discussed in partnership meetings, 52 percent in working groups and 28 percent via internal memoranda.
Nonequity Partners vs. Equity Partners
The study also dug into the distinctions between equity and nonequity partners, with the former earning an average $1.136 million, an increase of 3 percent from 2016, and the latter averaging $371,000, an increase of 1 percent compared to 2016.
That gap dwarfs the difference in billing rates between the two groups: $775 an hour vs. $599 an hour.
It’s a reflection of the greater emphasis that firms continue to place on rewarding individual business generators, Lowe said.
For the first time, the 2018 survey looked at the perceived obstacles that nonequity partners face to becoming equity partners. The majority felt generating more business was a barrier, with 64 percent identifying it as the chief obstacle to progression and 79 percent putting it in their top three.
And for nonequity partners who look conclude that the difference between what they bill and what they earn makes them undervalued, tough luck.
“Realistically, there aren’t going to be many places that aren’t going to be concerned about originations,” Lowe said. “That’s just where the industry has gone overall.”