July 10, 2014

Pay Equity Has Become Job #1: Overcoming the Most Stubborn Challenge Women Lawyers Face

G.M. Filisko

Lorelie Masters is among a growing group of women determined to, once and for all, ensure that women lawyers get equitable compensation. But nobody would fault her for feeling like it’s déjà vu all over again.

At a recent American Law Institute meeting, Masters talked to a woman about to become a law school dean. “We were saying, ‘Congratulations, this is so great,’ and she started telling this story,” she recalls. “When she was interviewing for the job, she was offered a salary amount. But she’d been at the law school for a long time and knew what the current dean was making—and she was offered quite a bit less money. Not just less, but substantially less. She said, ‘I’m not going to take the job. It’s not worth it to me.’ They ended up offering her more.

“Weeks later, I ran into another dean and was telling her that story,” adds Masters, a partner of Perkins Coie LLP, Washington, D.C. “She said, ‘Oh, yeah. The same thing happened to me.’ This isn’t an issue that’s in the past. The Equal Pay Act passed in 1963, but we don’t have equal pay. It’s time to fix this.”

As Masters’ experiences prove, the challenge isn’t just about compensation at the nation’s biggest firms. “It’s an issue we all need to be concerned with,” contends Laura Possessky, founding partner of Gura & Possessky PLLC, a two-partner firm in Washington, D.C., and Arlington, Virginia. “Typically, larger employers—firms and corporations—are going to be the benchmarks for compensation for women. They set the standard, and it ends up permeating compensation structures in the rest of the profession.”

It’s also about the ultimate future of women in the industry. While president of the Washington, D.C., women’s bar, Masters took a deep dive into its initiative on women’s advancement and retention. “That experience made me aware of other issues that needed to be focused on, one of which was compensation,” she says. “I’ve come to the conclusion that compensation is where it’s at. We can’t fix the problem of attrition of women and women of color in law firms and legal departments without fixing compensation.”

A Persistent Problem

Here’s the challenge in a nutshell: Women lawyers still earn less than men for comparable work.

Women equity partners earn an average of $66,000 less than their male counterparts, while income partners average $25,000 less, according to New Millennium, Same Glass Ceiling? The Impact of Law Firm Compensation Systems on Women, a 2010 study by the ABA Commission on Women in the Profession.

Women also continue to lag behind men on credit for rainmaking and client revenue, according to the 2014 Survey on Retention and Promotion of Women in Law Firms by the National Association of Women Lawyers. Among the nation’s 100 largest law firms, women are credited for roughly 80 percent of the client billings credited to men. Moreover, according to the survey, 33 firms declined to participate in the 2014 survey despite participating previously, some as recently as 2013.

Anecdotal data are equally troubling. “Information has been released in Howrey’s bankruptcy proceedings, so you can now find out what partners were making,” Masters explains. “I know women who were partners at the firm. They found out they were getting paid at the bottom of their practice groups, not because they brought in the least business but—as far as they could tell—because they were women.”

Even in the face of such data, the first step in solving the problem has been convincing others it exists. “It’s important for there to be general awareness, not just among women, that we’re back to a conversation that was happening in the 1960s,” says Laurel G. Bellows, 2012–2013 ABA president and a principal in The Bellows Law Group in Chicago. As ABA president, Bellows launched the ABA Gender Equity Task Force to address issues in the legal profession and society.

“We’ve had a tremendous amount of success,” Bellows adds. “But that success is tempered by continuing conversation and pushback. Instead of engaging positively, there’s more the belief, even among women, that the job is complete. There’s the enthusiasm, but not the recognition, of the job to be done.”

Systemic Solutions

The Gender Equity Task Force developed a toolkit that bar organizations can use to conduct conferences on compensation equity (available online at www.ambar.org/Toolkit). Among the topics addressed are institutional and individual changes that can move the needle on compensation.

Institutionally, firms need to take several steps, including making compensation decisions more objectively and adding more women to their compensation and other leadership committees.

“We need objective performance evaluations, and yet we’re still seeing subjective performance evaluations and compensation decisions,” Bellows says. “In most large firms, the decision makers lack the perspective of women at the compensation table. We know corporate boards have opened to women slowly but surely, and those corporations that have women on their boards are showing greater revenue and success. Firms need to add seats for women and women of color.”

Yet the answer isn’t to throw a token woman on the committee and call it a day. “It’s not fair to expect that one woman is going to be able to change things,” Masters says. “And studies show when you have three or more, that one stops having to be the standard bearer.”

Bellows believes that change will come, but only with bold leadership. “It’s going to take decision makers to make very difficult and strong decisions to bring in women in sufficient numbers to be comfortable sharing their perspectives,” she says.

The task force also opened another front in the battle. “One of the biggest successes is a project we call the Power of the Purse,” Bellows says. “It’s to have conversations with not just general counsel but heads of in-house legal departments, like the head of a litigation department, who send business to legal service providers. Several years ago, we started having these conversations, and the tenor was that general counsel didn’t believe it was their job to interfere with the business of the law firm, certainly not with who was going to be partner, compensation issues, and even more important who was going to be given origination credit for business.”

But there has been significant change. Bellows says in-house counsel recognize they haven’t seen a significant change in the number of women or people of color doing their work or being trained to be their relationship partner. In addition, they’ve seen that the lawyers they’ve been working with or have turned over big matters to haven’t received the kind of origination credit that would keep a lawyer content within a firm.

Bellows points out that in-house counsel are now more willing to come forward. “They believed they could solve the problem by sending a message and that firms would respond. But they’ve seen continued problems. And more importantly they’ve seen the exit of women and people of color from law firms—and that’s just disruptive.”

Women Are the Answer, Too

It’s also critical for women to take control of their compensation. The Commission on Women in the Profession’s Grit Project is based on scientific evidence that successful women possess a growth mindset that can be nurtured. The project guides women to develop that mindset. (See Ann Farmer’s article on the Grit Project on page 4.)

Other organizations also are creating training programs. As chancellor of the Philadelphia Bar Association in 2013, Kathleen Wilkinson, a partner at the Philadelphia, Pennsylvania, office of Wilson Elser Moskowitz Edelman & Dicker LLP, launched the Chancellor’s Leadership Institute. “We’ve brought in speakers so women and diverse attorneys can learn the leadership skills they need to succeed in today’s legal environment,” she explains.

Wilkinson says it’s nearly impossible to become a leader without a plan. “You have to be assertive, and you have to come up with a business plan, figure out how you’re going to implement it, and then implement it. You say, ‘If I’m going to be a partner, how am I going to get there?’ You can’t just come to your office every day without a plan.”

Taking control also includes understanding compensation. “Women have to be willing to ask and have conversations about how compensation structures work and how you get clients,” Possessky says. “If we don’t ask and understand, we’re not maximizing the opportunities we have. You may not get a straight answer. But you have to keep asking until you get the answers you need.”

Possessky also urges women to make a conscious decision to be fearless in the business world. “It’s important to not hesitate to ask about compensation, make a counteroffer when made an offer, and be prepared with alternatives if a workplace isn’t an environment or doesn’t offer a compensation structure that’s going to work for you. I had a decision to make, and I started a practice.”

This issue has dogged women for decades, yet these women are determined to beat it back for good. “I remain cautiously optimistic because women lawyers are good advocates and very smart,” Possessky says. “If not us, then who? It takes a long time to change the cultures and norms in a profession. This is going to take more time, but it’s doable if everyone does their part. I’m confident we’ll ultimately prevail in making the environment more equitable.”

G.M. Filisko

G.M. Filisko is a lawyer and an award-winning, Chicago-based freelance journalist who covers legal, real estate, business, and personal finance topics for such publications as the ABA Journal , Consumers Digest , REALTOR Magazine , AARP.com, and Bankrate.com.