Terry Mutchler, left, and Nicole Galli, right.
Terry Mutchler, left, and Nicole Galli, right. (Courtesy photos)

Impatient with limited prospects for advancement at large law firms, more female attorneys are taking a new approach to parity—they’re starting from scratch and creating firms of their own.

These lawyers aren’t just changing their surroundings. Many of them are also making more money. And with the ability to market their firms as women-owned and the freedom to establish their own compensation systems, they’re looking to challenge entrenched gender imbalances in the legal profession.

“I think a lot of us are starting to create an old-girls’ network and refer business,” said Nicole Galli, founder of national network Women Owned Law, which she started in Philadelphia less than a year ago. “I think we are inspiring other women to go out on their own and take ownership.”

Despite client demands for diversity among their outside counsel, women still make up less than a fifth of equity partners at large firms, Galli said, and they make less money than their male counterparts. By founding a small firm, women lawyers can create a business where they are in the majority.

Many state and local governments are required to contract with minority-owned or women-owned vendors for a certain amount of their professional services. Some corporations also look specifically for minority-owned and women-owned law firms, said Galli, and some large law firms seek partnership with women-owned firms so they can fulfill clients’ diversity requirements. So getting on that list of certified women-owned firms can be a boon to business.

“Until we can demonstrate that women-owned law firms … can be a significant competitive threat, I don’t think there’s going to be a change,” she said.

Taking Control

Early this year Philadelphia lawyer Terry Mutchler left Pepper Hamilton in hopes of forming her own firm focused on transparency and open records issues. Networking with other women who own their firms pushed her in that direction, she said.

“If I’m doing the work, why should I put my compensation, my benefits and the structure of my day in the hands of another entity or being?” Mutchler said. “If you’re bringing in clients in Big Law, you can bring in clients at your own firm.”

In a profession where traditional, or some might say antiquated, compensation systems seem to be holding back women partners’ pay, the partners at small women-owned firms may see more correlation between the work they do and the amount of money they make.

“It’s more than a work-life balance. This is a smart business decision,” Mutchler said. “It only makes sense to have control of your income.”

Also looking to provide a niche practice, Jennifer Horn set out to start a construction law firm in October 2015 with partner Carter Williamson. Philadelphia-based Horn Williamson, which is 99 percent women-owned, has since grown to 15 lawyers and staff, Horn said, and recently brought on Peggy Underwood from Jacoby Donner, a local firm that closed its doors earlier this year.

Horn, who came from Cohen Seglias Pallas Greenhall & Furman, started Horn Williamson primarily because she wanted to start a residential construction practice focused on building envelope defects. But she’s seen benefits from marketing the firm as woman-owned, she said, and they’re now in the process of getting certified.

“Our clients are noticing that working with a woman-owned firm give them a leg up for winning business,” Horn said.

Trickling up

Sharon Larkin and Elizabeth Ferrell, who came from Steptoe & Johnson and Bradley Arant Boult Cummings, respectively, made a similar move last week when they opened a government contracts boutique in Washington, D.C. It allows them to be more flexible in serving clients, they told The Legal affiliate The National Law Journal, but they also hope to serve as role models for younger women lawyers.

The women-owned distinction can also be a driver in firm combinations, as with the combination that created Schoeman Updike Kaufman & Gerber earlier this year. An eight-lawyer group in New Jersey, which had been part of the now-defunct minority-owned firm Gonzalez Saggio & Harlan, joined the women-owned firm Schoeman Updike & Kaufman. That particular tie-up allowed them to better maintain relationships with government clients, partner Steven Gerber told the New Jersey Law Journal.

By becoming leaders in their respective areas of the law, these women-owned firms might be able to influence their larger counterparts, Galli said.

“As more and more start to compete for clients and talent, and start to see results … just like any other form of competition, the market is going to have to respond,” she said.

Lizzy McLellan writes about the Pennsylvania legal community and the business of law at firms of all sizes. Contact her at lmclellan@alm.com. On Twitter: @LizzyMcLellTLI