As the gender pay gap continues to plague the U.S. legal industry, some firms are removing the mystery from law firm compensation systems in an effort to level the playing field.
A recently released survey by Major, Lindsey & Africa, done in conjunction with ALM Legal Intelligence, showed that male law partners make 44 percent more than women partners on average. Based on that survey, women partners make 69 cents for every dollar a male partner makes.
“The gap is there. It’s going to continue to be there because I think there’s an attitudinal issue on the part of the men,” Jeffrey Coburn, a law firm consultant based in Boston, said.
However, Coburn noted, that attitude is beginning to erode. Part of that is generational, he said, as older lawyers who are more likely to have biases against women retire. But it’s also a result of concerted efforts by some law firm leaders, he noted.
Two Connecticut firms, Murtha Cullina and Shipman & Goodwin, noted that open compensation systems help them avoid pay disparity.
“Everyone knows why everyone got paid what they got paid,” said Alan Lieberman, managing partner at Shipman & Goodwin.
The firm’s compensation committee consists of seven members and seven at-large partners, and Lieberman said the attorneys are diverse in terms of tenure, geography, gender and practice area.
“Everybody knows there’s somebody there that knows their story,” he said.
Murtha Cullina’s executive director, Michael Orce, said the firm has not heard partners complain about compensation differences since adopting an open system. He noted that some of the firm’s more successful partners are women.
Murtha Cullina has a list of criteria it considers when setting compensation, Orce said, which is objective, but not formula-based. The firm considers quality of work, involvement in the community, management, and sales and revenue generation.
“It’s really hard to have those gaps when it is an open compensation system because you can’t stand behind a compensation schedule,” Orce said.
Jennifer Wheelock, chairwoman of the Connecticut Bar Association’s Women in the Law Section, said transparency in the basis for compensation is one of the best practices recommended by the section’s Women in Law Futures Task Force. The task force distributed a pledge to follow these practices, which a number of Connecticut firms have signed, Wheelock said.
The Major, Lindsey & Africa survey pointed to a major factor playing into the compensation gap—an origination gap. Male partners reported average origination of $2.59 million on the survey, while women partners reported $1.73 million on average.
Coburn said the compensation structures of old need to change, regardless of gender pay inequity. He said firms need to stop giving origination credit to lawyers just because they brought in that client five years ago or more. The lawyers who work with the client day in and day out should be getting recognized for that, he said.
“Origination is nice, but it needs to be blended with client management, which is key,” Coburn said. “Just because you land a fish doesn’t mean you own the fish forever.”
That is exactly the case at Murtha Cullina. The firm “sunsets” a client for origination purposes after three years, and that entity becomes a firm client.
“You have to be originating new client work every year,” Orce said.
Lieberman called origination credit “a historical phenomenon.” He said his firm takes origination, billing and responsibility into account for each matter, and lawyers are not rewarded the same for origination when someone else did all the work for that client.
Sometimes the person who is handling a client’s matters is “not the person who brought them in 20 years ago when we were less diverse,” Lieberman said. “Everyone gets proper credit.”
In addition to having fair and open compensation systems, Wheelock said, firms need to include women in decision-making by having female representation in firm governance. And firms should provide marketing opportunities that work well for all partners, she said, so they can compete fairly in business development.
Lieberman noted that at many firms, women lack the access to leadership positions that would allow them to reach higher compensation levels.
“I think the pay gap is ultimately for a lot of firms … symptomatic of an opportunity gap,” he said.
At Shipman & Goodwin, Lieberman said, there are women on the management committee and serving as heads of practice groups. Providing opportunities also requires thought about who is sent out on pitch teams, and who is getting work from retiring partners. It’s a “constant focus,” he said.
Shipman & Goodwin’s partnership is 31 percent women and, overall, its attorneys are 44 percent women. Lieberman noted that there’s no “women’s track” at the firm in terms of women migrating to certain practice areas.
At Murtha Cullina, 38 percent of attorneys are women and 25 percent of partners are women. The firm’s current managing partner and the managing partner who proceeded her are both women, Orce noted.
Contact Lizzy McLellan at firstname.lastname@example.org. On Twitter: @LizzyMcLellTLI.