Analysis

The recent 3rd U.S. Circuit Court of Appeals’ decision in Kirleis v. Dickie McCamey & Chilcote, in which a female partner was unable to sue for sex discrimination because she had voting rights and shared in firm profits, did little to change the law but much to bring to the fore the issue of parity between men and women lawyers.

Alyson Kirleis was asking the 3rd Circuit to revive her case, arguing that despite her titles of shareholder and director, she should be treated as an employee because her work is “subject to the control of” the firm’s executive committee.

In the suit, Kirleis accused Dickie McCamey of paying women lawyers less than men, and alleged she was told by a male partner that a woman with children should relinquish her partnership and work only part-time. Kirleis, who has worked at the firm since 1988, also claimed she was told by another male partner that the role of women lawyers was to prepare lawsuits for trials that would be handled by men.

The 3rd Circuit’s brief opinion denying Kirleis’ arguments was non-precedential, but wouldn’t have changed the law on discrimination suits by partners in professional organizations even if it had precedential value, employment lawyers said.

“They applied the Clackamas standards and, quite frankly, this was a partner in a relatively small firm who did have the right to vote on some decisions and was paid a share of the profits and could not be easily removed,” Flaster Greenberg employment lawyer Michael Homans said. “She truly looked like a typical, genuine small-firm partner and I don’t think any of the decisions to date have suggested that that person, even if they are not the most powerful partner, are deemed an employee.”

Homans was referring to the U.S. Supreme Court’s 2003 decision in Clackamas Gastroenterology Associates v. Wells , in which the court recognized not every partner should automatically be deemed an employer, but outlined a six-prong test to determine whether the partner was more akin to an employee or employer.

Homans said Kirleis is just part of a larger trend in which professional services partners — particularly lawyers — are not hesitant to raise the issue of whether they are protected by discrimination laws. The topic has come up in recent age discriminations cases brought against Sidley Austin and Kelley Drye & Warren.

Progress Still Needed

For Fine Kaplan & Black’s Roberta D. Liebenberg, chairwoman of the American Bar Association’s Commission on Women in the Profession, Kirleis is just another reminder that the percentages of women in equity partner ranks and women in true positions of power have not changed.

And with no legal protections under discrimination laws once women achieve equity status, Liebenberg said this case further outlines the need for “commitments from the top management to really make this a priority.”

The number of women graduating law school and the number of female-geared programs within law firms have left many with the impression that “the job is done,” she said. But, Liebenberg said, the lack of women in power positions “should be an alarm.”

Studies by the commission, the Minority Corporate Counsel Association and the Project for Attorney Retention have shown that female attorney attrition is driven in large part by their being under-compensated and under-recognized, she said.

The latest study by MCCA and PAR, which came out in April, showed that 55 percent of women partners said they were occasionally or frequently denied their fair share of origination credit and about 30 percent said they were intimidated or bullied when they objected to the origination credit they received.

Another takeaway from these studies, Liebenberg said, was that the committees women tend to be placed on are rarely those whose members tend to receive greater compensation.

One of the best practices these organizations are touting is for in-house counsel to be aware of the ramifications of pay and power disparity and get involved in ensuring these women are retained.

Carol Tracy of the Women’s Law Project in Philadelphia, which filed an amicus brief on Kirleis’ behalf, said she hopes the case will be reheard en banc and overturned.

If applied as decided, Tracy said, “it will severely limit access to justice” for female and minority attorneys.

“If title alone can determine whether discrimination laws apply, this could lead to significantly more discrimination,” she said.

Along with the studies that show inequalities in compensation and assignments between male and female partners, Tracy said she hears from female attorneys more than one would expect about pay disparity and not being given origination credit. And she more often hears from the senior female attorneys rather than associates, she said.

Law firm life hasn’t been as daunting for every female attorney. Sarah E. Davies, an equity partner with Cozen O’Connor, said she couldn’t imagine hearing the comments allegedly said to Kirleis at either of the two firms she has worked.

Davies said she does think it’s the case that women are lagging when it comes to management committees and office managing partner positions.

“Partly that’s because, frankly, it wasn’t until my generation or people younger than me that women started being half of law firms,” Davies said.

“There aren’t a lot of women in their mid-50s who are partners,” she said. “There just aren’t that many.”

Davies said the lack of women in leadership may be a timing issue. She said she has seen women in their mid-30s to mid-40s begin to take on leadership positions. She said she hopes that in the next five to six years, women begin to take on more of those roles.

What Firms Can Do

Though they have some legal protection, there are best practices for law firms as well when it comes to minimizing the risk of discrimination complaints.

Harrisburg-based Brian F. Jackson, co-chairman of McNees Wallace & Nurick’s labor and employment group, said every law firm should be looking at this issue in terms of what segment of their professionals are owners in that they have a share of profits and losses and liabilities, that they have some significant degree of practice autonomy and that they have influence in the organization through voting rights.

The firms should then look at what policies and practices they have in place that apply to that class of owners’ ability to complain about poor treatment or compensation concerns, he said.

“All professional organizations have spent more time looking at their classes of professionals to determine which ones would truly satisfy the ownership criteria,” Jackson said. “And any good organization, even for those owners, will have processes … that would permit even an owner to try to present a concern or complaint internally for a resolution.”

Many firms have an arbitration process, but the best course of action is to ensure there is first an internal, non-adversarial method of airing complaints, Jackson said.

And the process should really be uniform for sex, age or other forms of discrimination complaints, he said.

“There shouldn’t be any difference because you are paying me less because I’m about to retire or a middle-career female or [have] a record of impairment,” Jackson said about how the Clackamas criteria is applied to these cases.

How the U.S. Equal Employment Opportunity Commission will apply those standards and prosecute those cases, however, remains to be seen, he said.

Homans said the larger firms are more vulnerable because of the varying degrees of partnership status. Someone in a firm where partnership votes are rarely taken, the partner does not control his or her own book of business and the partner could be fired without a vote by the shareholders could present a potentially viable discrimination claim as an employee, he said.

When it comes to age discrimination, Homans said the EEOC is clearly pushing ahead with those types of cases involving law firms. So as long as these issues are on the EEOC’s radar, they should be on law firms’ radar screens too.

“I don’t think this issue is going away anytime soon,” Homans said. •