Attention: Bargain hunting general counsel. Are you tired of those sky-high outside counsel fees? Want your matters handled by smart, conscientious lawyers at a fraction of what you’re currently paying?
Easy! Just dump the guy who’s been handling your company’s cases and deals and replace him with a female partner. Better yet, demand that the firm replace the whole team with female lawyers.
That’s my best effort at making lemonade out of lemons from the latest gender report on law firm billings. According to Sky Analytics, a legal management software company, male lawyers are billed at higher rates at every step of their careers—starting right out of law school.
Sky Analytics looked at $3.4 billion of billings by over 3,000 firms, including 73 AmLaw 100 firms. Here are some of the key findings:
- Female partners are on average 10 percent cheaper than their male counterparts. This is generally true regardless of size or location of the firm.
- Firms charge less for women across the board: Two percent of male lawyers bill more than $1,000 per hour, while virtually no women do so. Six percent of male lawyers bill more than $800, but only 2 percent of female lawyers do so. Moreover, 51 percent of men at top tier firms charge over $500 per hour, but only 31 percent of women do so.
- The rate differences between the genders start at the get-go: The average hourly rate of a female associate at top tier firms is $27 less than that of a male colleague.
- Firms write off a higher percentage of women’s billings. Firms bill 74 percent of male associates’ time, but only bill 68 percent of that of female associate. Firms also bill 69 percent of male partners’ time, compared to 63 percent for female partners.
So what could possibly justify the gender difference in effective hourly rates? Are women not working as hard or as efficiently as men?
No. According to the study, male and female associates bill about the same number of hours per day. In fact, female partners bill 24 minutes more per day than male partners.
As for efficiency, the study says:
We found that there is no difference in the number of hours to complete a task: Male and female lawyers bill about the same amount of hours per matter.
The big culprit behind the rate discrepancy is that women are not getting the prized assignments. Explains Silvia Hodges Silverstein, a vice president at Sky analytics: “The billing gap occurs at the start. Women do less strategic work; 80 percent of big legal matters are worked on predominantly by men. If you get stuck on smaller matters, it’s more likely that the billings will be written off more.”
To protect against inequitable work assignments, Silverstein says firms need to be vigilant: “Women associates need the right assignments and opportunities.”
In the meantime, though, female lawyers are selling at a discount. Get them while they’re hot!
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