Despite Advances, Women Still Lag Behind Men in Billing Rate, Management Roles
Despite notching significant gains in the legal world, female law-firm partners continue to lag behind their male counterparts when it comes to billing rates, commanding on average 10% less for their services, according to a new analysis of $3.4 billion in legal work.
Lawyer Patricia K. Gillette said some female rainmakers ‘are not getting the credit for what they do.’ Ramin Rahimian for The Wall Street Journal
The gap begins at the junior lawyer level, and is more pronounced among seasoned attorneys at major firms, persisting even when partners possess similar levels of experience and work in the same market, according to the review by Sky Analytics Inc., a provider of software to help companies track legal spending and invoices.
For example, senior male litigators at regional firms in Los Angeles with more than 25 years of experience charged on average 8.3% more than their female equivalents—$487 an hour versus $450.
In New York, the average male partner at a 1,000-plus lawyer firm with 13 to 24 years of experience representing investment banks was billed out at about $679 an hour, nearly 25% more than the average female partner, whose rate was $544.
“It was very significant, across all categories,” said Silvia Hodges Silverstein, vice president of strategic market development at Sky Analytics. Ms. Silverstein, who teaches law-firm management at Fordham and Columbia law schools, looked at three years of billing data from more than 3,000 law firms.
The findings highlight a persistent gender gap in the legal profession despite inroads made by women over the past four decades. The statistics echo results from earlier surveys that found similar discrepancies in the compensation realm.
One-third of U.S. lawyers and judges are now women—compared to roughly 4.8% in 1970, according to U.S. census data—but they remain relatively rare among the top ranks of the profession.
Women make up only 17% of so-called equity partners with ownership stakes at the 200 top-grossing U.S. law firms, according to the National Association of Women Lawyers, and they are similarly underrepresented in management roles and on powerful governing committees. By contrast, an overwhelming majority of so-called “rainmaker” lawyers credited with bringing in substantial business are men, the association’s most recent survey found.
“Women are less likely than men to reach the highest levels…and when they do they are still paid somewhat less than their male peers,” said Stephanie Scharf, a senior partner with Scharf Banks Marmor LLC in Chicago, and a past president of the association.
Ms. Scharf said hourly rates are often tied to a lawyer’s status in the firm—whether an attorney is a department head of a particular practice, for example, or sits on the firm’s executive committee—and don’t necessarily reflect a person’s marketability or skill level.
“To the extent women partners are not advancing into the highest levels of firms,” she said, “then their billing rates will reflect that situation.”
Some women attribute the broader achievement gap to the often subjective ways that law firms evaluate, reward and promote partners.
“It’s all a series of backroom assessments and backroom deals,” said Joan C. Williams, a professor at the University of California’s Hastings College of the Law. “It’s just like a petri dish for gender bias.”
Firms that responded to the National Association of Women Lawyers survey said key obstacles to women’s advancement include lack of business development opportunities, work-life balance issues and attrition, as women lawyers leave firms for better job opportunities elsewhere.
Some prominent women lawyers say they charge as much—and are as well compensated—as their male colleagues, but note that is not always the case for women with less power.
“If you are a woman and you control a lot of business, the firm is going to want to keep you happy,” said Patricia K. Gillette, an employment lawyer at Orrick, Herrington & Sutcliffe LLP in San Francisco who is involved in a number of initiatives aimed at increasing retention of female lawyers.
“It’s all a series of backroom assessments and backroom deals. It’s just like a petri dish for gender bias.”
— Joan C. Williams, a professor at the University of California’s Hastings College of the Law
She said the problem often occurs one rung below, among female partners who may bill thousands of hours a year but aren’t regarded as rainmakers—even if their skill, time and energy has helped land a client or significantly expanded that relationship. “They are not getting the credit for what they do,” she said, or opportunities to inherit big clients, which at some firms she said “tend to get handed down to men.”
One of the more surprising findings in the Sky Analytics billing analysis: female associates were also billed out at lower rates, even though junior lawyers are often paid on a so-called lock-step basis according to the number of years they have been in practice. The average hourly billed rate of a female associate at a 1,000-plus lawyer firm was $27 less than that of her average male colleague—$377 compared with $404.
Several factors could affect the averages when it comes to billing. Different practices command varying rates, and legal services typically cost more in top-tier markets. Women may also make up a higher proportion of some practices, such as family law, that charge less, or be underrepresented in the priciest realms of legal practice, such as mergers and acquisitions.
One potential sticking point: so-called origination credit given to partners who are considered responsible for landing a piece of work. Firms vary widely in how they award those credits, but origination has traditionally played a significant role in determining how much partners earn, and therefore how much firms charge for their services.
According to a 2012 survey by legal recruiting firm Major, Lindsey & Africa, the average male equity partner reported getting origination credit for $2.7 million in billings, while the average female equity partner reported $2.3 million, or about 15% less.
Many women feel shortchanged by the process, said Ms. Williams, who surveyed about 700 mostly female partners on law firm compensation in 2009.
Among respondents whose firms awarded origination credit, four out of five said they had been denied their fair share in past years. Many also felt that when they got new clients, they were expected to share origination credits with others, while men weren’t, she said.
Andrea Kramer, a partner at McDermott Will & Emery LLP who has served on the firm’s compensation and management committees, said women lawyers also tend to be asked to take on administrative and nonbillable “housekeeping” tasks that help law firms run smoothly but do little to boost individual pay or internal prestige.
Ms. Kramer, who often writes on gender and professional advancement, said conditions have improved somewhat since the 1990s, when men might not invite female partners out for drinks or to work-related dinners that provide internal networking opportunities. To help even the playing field, she advises women to refer business to other women, and to tout their accomplishments during pay negotiations.