Special focus: GOING UP?

An insight into the National Association of Women Lawyers’ Survey on the Retention and Promotion of Women in Law Firms. Barbara Flom and Marianne M. Trost report.

The belief that “no one really knew how well women as a group were progressing in large firm practice” is what prompted Stephanie Scharf, then president of the National Association of Women Lawyers (NAWL) to take action and initiate the only national study in the US that annually tracks the professional progress of women lawyers into the highest levels of law firm leadership. “A first step to change is measuring where we are, so we can set goals for where we think we should be,” said Scharf, a partner at US law firm Schoeman, Updike, Kaufman and Scharf.
Among its goals, the NAWL Survey on the Retention and Promotion of Women in Law Firms compiles annual objective data that provide an empirical picture of how women lawyers forge long-term careers and what progress is being made in reaching the highest position in firms. The annual Survey Report provides statistics for firms to use in measuring their own progress and provides longitudinal data for cause and effect analyses of the factors that enhance or impede the progress of women in firms.

Gathering the data
Getting the Survey off the ground was no easy feat, not even for NAWL, which was founded over 100 years ago and is the leading volunteer organisation in the US devoted to the interests of women lawyers and women’s rights. In 2005 and 2006, Scharf led the effort to develop the Survey along with Lorraine Koc, another former president of NAWL. Together they carved out the key Survey focus areas including compensation of men and women lawyers at all levels of practice, senior roles as equity partners and law firm leaders, and factors that influence career progression. Now sponsored by the NAWL Foundation, the Survey continues to use academic-level methodology to avoid marketing and promotional biases that often accompany popular but unscientific surveys.
Each year, the Survey covers questions about retention and promotion, leadership roles and compensation at the same time that it includes segments of specialty content that is studied periodically but not every year. In 2007, for example, the Survey added in questions about billable hours requirements, part-time policies, and women’s initiatives. In 2008, questions about the lateral movement of lawyers, the impact of different law firm structures on women, and the status of women of colour in law firms were included. “The NAWL Survey goes beyond top-line statistics, combining key data points to show us how things really work,” explains Lorraine Koc, a general counsel at national retail company, Deb Shops, Inc.”.This enables women lawyers and their law firms to make rational business and career decisions.
The 200 largest law firms in the US define the pool from which Survey data is collected. Consistent participation by these firms is fundamental to the value of the Survey and the Survey Report.
To enhance participation, NAWL keeps individual firm data confidential and publishes only aggregated results. “We wholly recognise the sensitive and confidential nature of the data requested and it is not the goal of the Survey Report to lay blame or point fingers,” says Cheryl Tama Oblander, a partner at Winston & Strawn LLP, and a member of the firm’s steering committee for the development and retention of women. “Rather, the aggregate data is significant and enables us to spot trends and provide solid empirical data to law firms on these issues, as opposed to anecdotal observations.”
“For example,” she continues, “I do not know the statistics for Winston & Strawn, but our committee uses the Survey Report data as part of our process to improve the career path for women attorneys at the firm.”
What’s more, to maintain the strictest standards possible, NAWL does not solicit law firms or others to sponsor the Survey. This alleviates concerns that sponsorship would somehow influence results. From 2006 to 2008, the Survey was fully funded by NAWL and for 2009, it is being funded by the NAWL Foundation. The Survey relies heavily on the volunteer efforts of the NAWL Survey Committee to accomplish its goals.
“A large majority of AmLaw 200 law firms have responded to this Survey since its inception and again in 2008,” says current NAWL president, Lisa Horowitz. “Such participation is critical to obtain an accurate picture of the status of women in leadership, equity and management positions in law firms and of progress being made over time.”
Although trends in the AmLaw 200 firms are not always reflective of those in smaller firms, government or in-house legal departments, the AmLaw 200 represents a large and easily measurable pool of lawyers and is generally regarded as a bellwether of the entire legal profession.

The results
The most straightforward information in the 2008 Survey Report is also perhaps the most disappointing. Women are still markedly underrepresented in the leadership ranks of large American law firms. They constitute fewer than 16 per cent of equity partners; they represent barely 15 per cent of the members of the average firm’s highest governing committee; and they constitute only six per cent of law firm managing partners. Looking beyond the averages, women’s participation in firm leadership is even bleaker: 15 per cent of the nation’s largest law firms have no women at all on their highest governing committees. When it comes to compensation, the 2008 Survey Report indicates that the more women lawyers achieve in an absolute sense, the farther they fall behind relative to men. On average, women associates earn 97 per cent of the compensation earned by their male peers; at the of counsel level women earn 93 per cent of what men earn, on average; among non-equity partners, women earn on average 91 per cent of what men earn; and at the equity partner level, women on average earn only 87 per cent of what their male peers earn.
For a long time, commentators have been suggesting that a primary factor in the lack of progress by women lawyers in large firms is a ‘pipeline’ problem. This premise is based on the hypothesis that once sufficient numbers of women have graduated from top-ranked law schools and begun careers in these large firms, the statistics will improve. However, as of 2008, after more than twenty years during which the pipeline has been filled with highly qualified women joining these firms at roughly the same rate as men, significant discrepancies still exist. Indeed, the 2008 Survey Report clearly points out that the percentages of women in these firms dwindle at each successive stage of practice. Women constitute 48 per cent of entering associates, 44 per cent of senior associates, 34 per cent of of-counsels, 27 per cent of non-equity partners, and fewer than 16 per cent of equity partners. The attrition starts early for women and accelerates over time despite the robust pipeline. The only hopeful finding is that recent women graduates appear to have a slightly greater chance of becoming equity partners than women who graduated years earlier. According to the 2008 Survey Report, women constitute 10 per cent of equity partners who graduated law school before 1982, 19 per cent of equity partners who graduated between 1982 and 1997, and 24 per cent of equity partners who graduated in 1998 or later. Yet if these percentages constitute progress, one might reasonably characterise it as glacial. At this rate, it could take decades before women constitute anywhere near half of the equity partners in any AmLaw 200 firm.

Women of colour
The exceptionally slow rate at which women appear to be achieving equity partnership is even more pronounced for women of colour. The 2008 Survey Report found that while women of colour are hired as associates in numbers roughly proportional to the number graduating from law school, women of colour are much less likely to be in partnership positions than white lawyers of either gender or men of colour. Women of colour account for about 11 per cent of associates but only three per cent of non-equity partners and only about 1.4 per cent of equity partners. Viewed another way, women of colour are eight times more likely to be represented at the associate level than at the equity partnership level. The Survey results complement research on the experiences of women of colour in law firms conducted for the 2006 ABA Commission on Women report Visible Invisibility: Women of Color in Law Firms. Clearly the combination of being female and a lawyer of colour presents additional challenges associated with promotion within law firms.

One-tier, two-tier or mixed-tier?
One unexpected finding of the 2008 Survey was the recognition of a new type of capital structure, which also appears to affect women’s likelihood of success. For years, the common wisdom was that US law firms were either ‘one-tier’ or ‘two-tier’. In a one-tier firm, every partner is part-owner of the firm and shares in the firm’s overall profits, while in a two-tier firm, a group of equity partners shares in firm profits but the firm also employs a (typically larger) number of ‘income partners’ who do not share in firm profits.
The 2008 Survey was the first study in the US to identify a ‘mixed’ type of firm. The Survey showed that some 15 per cent of the nation’s largest 200 firms were what NAWL has termed ‘mixed-tier’ firms. In a mixed-tier firm, every equity partner is required to contribute capital to the firm but some number of equity partners are paid on a stipend basis and do not share in firm profits. Presumably mixed tier firms adopt this structure to generate greater capital for the firm without the corresponding obligation to compensate partners on the basis of their capital contribution. The preliminary data also indicates that mixed-tier firms have lower percentages of women equity and non-equity partners than other types of firms, and that women who begin practising law in mixed-tier firms are less likely to advance to equity partnership than women in other types of firms.

Profiting from part-time policies?
Of course, firms are aware of these retention issues and many firms have taken steps aimed at enhancing women lawyers’ opportunities for career success. However, it is not always clear whether these approaches are having the desired effect. For example, it has often been suggested that part-time work policies would help women lawyers continue practising law during their childbearing years. The 2007 Survey found that all responding firms had part-time policies in place and that both women and men were taking advantage of these policies. Interestingly, however, almost all male lawyers who worked part-time had practised for 25 years or more, while the women lawyers working part-time had been in practice fewer than 20 years. Given the Survey’s consistent finding that attrition of women lawyers accelerates over time, one might wonder whether women who have worked part-time early in their careers are setting themselves up for later disadvantages, perhaps because they do not accumulate the same variety and level of experiences as lawyers who have practised a similar number of years on a full-time basis. Or it may be that firms perceive women who work part-time as insufficiently committed to the practice of law, perhaps resulting in these women receiving less challenging assignments or being excluded from career-enhancing firm activities. If further research were to demonstrate that part-time policies have not helped women forge long-term successful careers in private law firms, then serious consideration should be given to whether those programmes can be revised to achieve their goals, or whether some other approach would be more productive.

Women’s initiative programmes
One area in which almost all firms appear to have made strides over the past several years is in the implementation of women’s initiative programmes. These programmes are specifically geared toward women lawyers, are designed to enhance their career prospects, and typically include some combination of professional development, networking, mentoring and business development support. According to the 2008 Survey Report, 90 per cent of women’s initiative programmes include a business development component, although the precise contours of that component are highly variable. Firms today increasingly recognise that for any lawyer, achieving equity partnership and the higher echelons of law firm practice depends in substantial part upon having a strong individual book of business.
Women lawyers’ business development has historically lagged behind that of their male peers, and in a profession increasingly driven by ‘profits per partner’, it is quite possible that this lag is significantly responsible for women lawyers’ limited ability to achieve equity partnership. Furthermore, the leadership ranks of AmLaw 200 firms are largely populated with the strongest business generators, so lack of a solid book of business is doubtless also a factor leading to the paucity of women in law-firm leadership. This suggests that programmes on business development for women lawyers may be particularly useful in helping women lawyers forge successful careers, although it is too early to tell whether these programmes are successful.
However, it is not entirely clear why women have generally been less successful at business development than men. Possible reasons include cultural and social issues that have discouraged women from pursuing business aggressively and from utilising traditional mechanisms for building business relationships, such as playing golf, going out for drinks after work, or cultivating an interest in professional sports. Other potential reasons for women’s relative lack of success in this area may include women lawyers having limited access to clients or roles where they can develop solid, business-generating relationships with clients. If business development programmes only teach women how to engage in individual sales and marketing efforts, they may not significantly improve women’s success in building books of business. On the other hand, if firms both teach women lawyers business development skills and make an effort to include women lawyers in client pitches, on client management teams and as leaders on client projects, then it would be reasonable to expect that women lawyers will develop more business and be viewed as more economically valuable to their firms. Although the 2008 Survey began to delve into some of these questions, further research is necessary. In the meantime, the presence of these programmes is a welcome development.

Lateral hires
The 2008 Survey also collected data for the first time about how lateral movement of lawyers from firm-to-firm affects women. The data proved surprising. Two-thirds of the women and three-quarters of the men promoted to equity partner between March 2007 and March 2008 were laterals, and a startling 31 per cent of those promoted to partnership had joined their firms since 1st March 2006 (termed ‘recent laterals’). Overall this data would suggest that for any lawyer, changing firms is a better strategy than staying in place. However, the Survey also revealed that in the average firm, women made up almost 30 per cent of new equity partners who had stayed at their original firm (‘home-grown’), but only 17 per cent of new equity partners who were recent laterals. This further finding implies that remaining with their original firms is a more likely route to equity partnership for women. However, the type of firm structure also appears to have an impact on women’s advancement. One-tier firms were almost equally likely to promote home-grown and lateral women to equity partnership, while in two-tier firms, new female equity partners were 28 per cent home-grown and 72 per cent laterals, and in mixed-tier firms, new female equity partners were only 17 per cent home-grown and 83 per cent laterals. Clearly, further research is necessary to better understand the underlying factors influencing lateral moves and their impact on women lawyers.

What’s next?
Perhaps the biggest question looming over the 2009 Survey Report, expected in November 2009, is how the economic downturn has affected women lawyers. All of the 2008 Survey Report data was collected as of 1 March 2008, before the meltdown in the financial sector (traditionally a heavy user of legal services) was apparent. Since that time, law firms have seen significant layoffs, downsizings, and even outright dissolutions (three law firms in the AmLaw 200 closed their doors before the end of 2008). At this point in time, it is unclear whether the legal careers of women and men have been affected differently by these economic events.
The 2009 Survey will be spearheaded by the NAWL Foundation and capture data as of 1 March 2009. We anticipate that the 2009 Survey Report will demonstrate whether women lawyers’ careers continue to advance, even at a snail’s pace, or whether the 2008 Survey Report findings, even if disappointing, represented a high-water mark that will not be surpassed until the economy improves.

Barbara Flom is a senior tax and business lawyer, and former partner at US firm Jenner & Block LLP. She can be contacted at barbflom@gmail.com.

Marianne M. Trost is ‘The Women Lawyers Coach’. She can be contacted at marianne@thewomenlawyerscoach.com