Disparities in compensation are a key factor driving women out of the legal profession, according to a U.S. leader on the issue. The problem can be so pervasive that some women may want to consider leaving their firms, says Roberta Liebenberg, chairwoman of the American Bar Association’s Commission on Women in the Profession. “I always say if you’re unhappy, be prepared to leave, be prepared to do something else,” Liebenberg said during a session on disparities in law firm compensation at the ABA’s annual meeting in Toronto on Friday.
The comments follow a new U.S. report from the National Association of Women Lawyers, the national survey on the retention and promotion of women in law firms, that showed the compensation gap between men and women is widening. Among the reasons for the gap was the issue of origination credit — a key factor in determining compensation — for bringing in new business to the firm. In fact, the study found more than half of the women surveyed reported being denied their fair share of origination credit.
Jim Goh, a Denver lawyer appointed to the commission, criticized the so-called first-touch system whereby the lawyer who first brought a client to the firm gets the origination credit in perpetuity. Because clients are less loyal to their lawyers than they were in the past, it may, in fact, now be someone else at the firm who does most of the work for them and is likely responsible for keeping them, he noted during the ABA session. As a result, he called the practice of awarding credit based on first touch an “archaic system.”
Other challenging issues for women lawyers include client succession when a lawyer retires from the firm. According to the survey, 30 per cent of respondents said lawyers in charge of a matter select their successors. “It’s basically white male lawyers giving their clients to their male proteges,” said Liebenberg, who chalks up much of the disparity to implicit biases within law firm cultures.
Despite the problems highlighted, the study and ABA session offered a number of solutions for countering them. They include greater transparency in compensation decisions; gathering data on revenues generated by and credit granted to women lawyers; restructuring origination and succession; and re-evaluating what law firms reward. General counsel also need to be more proactive about monitoring who’s on the teams doing the work for them, Liebenberg said.
She added that having more women involved in the decisions about compensation is important as well. “You need a critical mass on the compensation committee.”