Despite efforts by the world's top law firms, diverse talent remains elusive - particularly at the upper echelons of firm management.
It is no secret that recruiting and retaining diverse talent remains an issue for most industries, and that, despite the legal industry’s role as enforcers of equal opportunity, law remains one of the lowest ranked industries for gender parity. The result? A veritable Catch-22: women are “welcome” in large law firms but underpaid, underrepresented, and underwhelmed by support, leading to disenfranchisement from the firm and, all-too-likely, from Big Law in general.
Gender diversity industry statistics
According to ABA statistics, women account for just under half of law school graduates. Similarly, according to ALM Intelligence data from FY 2016, women account for about 46 per cent of Big Law associates. Law firms then are succeeding at bringing women into the fold in the early part of their career. Partnership levels, however, tell another story. Women make up just 22 per cent of all partners: 18 per cent of equity partners and 28 per cent of non-equity partners.
Two steps forward, one step back
There are a number of warning signs in the data. The largest jump from FY 2015 to FY 2016 was in the non-equity partner track. Often termed “the pink ghetto,” it is not uncommon to see firms relegate women to income partnership more frequently than equity.
ALM Intelligence data also indicates that women are most frequently clumped, or self-select, into niche practice areas such as immigration, family law, labor and healthcare – often the practice areas least-represented in Big Law and with the lowest compensation structures. On the flip side, areas like M&A and Banking, areas with the highest representation at Big Law firms and with matching compensation structures, have the lowest percentages of female headcount.
It is also telling that ALM Intelligence’s midlevel data shows women are less satisfied at large law firms than men, are less likely to have a mentor at the firm than men, and are less likely to have a family than men.
Insidiousness of Unconscious Bias
Notwithstanding efforts by firms to address issues of gender disparity in hiring and promotion decision, instances of unconscious bias tend to persist. Because the upper echelons of firm management are predominantly male, there is greater risk of unconscious bias against women.
One example is the subjective process of awarding origination credit. Firm management committees with a hand in awarding origination credit are typically dominated by or exclusively run by men. There is no surprise then that a study between ALM Intelligence and Major Lindsey and Africa found that between 2012 and 2014, origination credit to female partners dropped 12 percentage points while credit to male partners increased 8 percentage points in the same period.
This does not just affect mobility within the firm. Lateral partner hiring relies almost exclusively on portability of book of business. Without due credit, women are unable to match male partners in the size or breadth of their books of business. Fewer female partners (in the industry) with (often) less impressive books of business than their male counterparts affects the mobility of women outside of the firm as well.
Though progress has stagnated, law firms have more reasons to focus on gender parity than ever before:
The number of diversity-driven GCs risen steadily; and so has their expectations for diversity within their outside counsel teams.
There is an expanding amount of research concluding that diversity makes good business sense. Some high-level findings include the fact that gender diverse companies outperform non-gender-diverse companies by 15 percent and diverse teams achieve a greater degree of innovation than non-diverse-teams.
Firms that have not worked towards achieving parity may also be threatened by the upswing in class actions against law firms regarding equal pay and policy.
Where do we go from here?
Based on ALM Intelligence’s research, below is a list of recommendations. This list is certainly not exhaustive, but may help to spark a discussion on how to hire and retain a diverse workforce.
a) Implement a gender blind diversity review process
b) Ensure a quorum of women on hiring and lateral hiring committees
a) Create a diversity and inclusion committee and monitor diversity and inclusion initiatives to ensure that stated goals are being met
b)Ensure business development and rainmaking training is sufficiently robust based on individual levels
3. Firm practice
a) Ensure that the allocation of origination credit is neutral by instituting a gender diverse committee and third party oversight
b) Encourage and recognize teamwork and collaboration in awarding origination credit
4. Family matters
a) Encourage both male and female employees to take parental leave
b) Hire a career coach for working parents to assist in balancing work and home life
a) Implement a metrics dashboard to track statistics like practice areas and locations
b) Implement a baseline audit to determine diversity goals for the short and long term
Constant improvement is the best way forward
Critically, none of the above recommendations alone will suffice. Rather, we must continue putting the industry under a microscope, and promoting a need for change. To do this, law firms must be more open to sharing data and information across the industry. Only when we know where the issues lie can we truly solve the problem.
Daniella Isaacson is a Senior Analyst at ALM Intelligence, a division within ALM focused on data-driven research and analysis on the legal industry.