Editor’s Note: The author of this article is a scholar at Harvard Law School who has previously contributed articles about collaboration among partners in law firms. Read Part One, Part Two and Part Three. Her new book, “Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos,” will be soon be published by Harvard Business Press.
By Heidi K. Gardner, Distinguished Scholar, Harvard Law School Center on the Legal Profession
Recent reports of the persistent pay gap between men and women law firm partners have prompted debates about the role of origination credits in that inequity. Thoughtful scholars, law firm leaders and partners, and consultants to the industry are typically careful not to point fingers or suggest that the bias is intentional. But the statistics can’t help but make a number of people uncomfortable or defensive. Until now, we have relied mostly on interviews, self-reported surveys, and anecdotal evidence about the root causes of the inequitable distribution of origination credits in so many firms. Those who are invested in the status quo point to the potential subjectivity in such data sources as a way to discredit the findings. Even those who are keen to change the system are often at a loss about how to affect change.
My empirical research at Harvard Law School’s Center on the Legal Profession gives some new insights into the foundation of this problem and some possible ways forward. I have collected extensive data — timesheets, billing records, origination files, personnel records — across multiple law firms (domestic and global), for timespans ranging up to a decade per firm. I collected this data set as part of my ongoing research about collaboration in professional service firms, which will appear in my forthcoming book, “Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos”. This archival data has the benefit of being objective, in the sense that lawyers recorded it for business purposes rather than as an exercise to understand gender outcomes. But the investigation about partner-level collaboration consistently highlighted issues related to gender, too. In my analyses across the disparate law firms, several similar findings have emerged that point to some more general patterns across the sector.
First, and perhaps most surprising, is the way that the origination gap emerges between male versus female partners. Most people – initially, including me – assumed that both men and women start their partner years with an equally small book of business, but that a discrepancy grows incrementally, over time. The reality, at least in four different law firms looks quite different: while it’s true that partners of both genders begin with negligible origination credits, by the end of the third or fourth post-election year a sizable difference has opened up. The figure below illustrates this pattern. (Note that the figures look very promising for highly experienced women but we need to interpret the data with caution: there are so few long-tenured women partners that the survivors really skew the average.)
What accounts for this rapid divergence between men and women’s book of business? Our statistical analyses show that women tend to grow their book incrementally and often through the (obviously harder) process of developing clients who are brand new to the firm, whereas men tend to “inherit” institutional clients – either as the sole or co-lead partner on major accounts. The speed of that process suggests that its roots lie in a biased origination system beginning in their associate years.
One of the benefits of statistical analysis is that we can rule out, or control for, many factors that would otherwise explain the disparity. For example, one lawyer quoted in an online article suggested that women may accumulate fewer origination credits because of their desire to “get home” and work fewer hours. But our findings show that gender itself is a strong predictor of the origination credit gap, even when controlling for hours worked, the partner’s hourly rate, the average billing rate of her/his team, and the number of clients where each is the lead partner.
In previously published academic research*, my colleagues showed that men are favored in the law firm inheritance tournament: when male partners have strong ties to a partner who then retires (i.e., work more hours for that senior partner’s clients before he retires), that male is likely to become the new lead partner. Female partners, however, earn zero to negative returns for investing in inheritance: the more hours they worked for a senior partner’s clients, the less likely they were to inherit the account. Again, these analyses controlled for many potentially confounding factors such as partners’ tenure (although not for their practice group, which is likely to be an important variable). The authors explain their findings as the result of “homophily,” a well-documented sociological tendency for people to form stronger relationships with people who are demographically similar.
In my research with law firms, I have observed well-intentioned partners’ thought processes that result in such a Mini-Me outcome: “My client loves me, and therefore they’ll love the junior partner who is just like me.” The aim is genuinely to serve the client as well as possible and preserve the strong relationship for the sake of the firm and its next generation. But clients tell me that this thinking is flawed because it fails to account for their priorities, which often involve bringing innovative thinking to the relationship.
Because most firms lack a coherent, strategic approach to client succession planning — in fact, most firms have no formal process whatsoever — the upshot of these individual decisions is a situation where men and women have significantly differential access to clients. The same is true of the way that origination credits are negotiated and distributed: in many firms, a free-for-all environment rather than a coherent set of policies means that discrete choices accumulate to a biased overall outcome.
Clearly, many underlying root causes create the pay gap between men and women partners in law firms. But I urge law firm leaders and consultants to use data and analytics for helping to understand the root causes of the problem in each firm; identify when and where the problem emerges, and start to tackle it at its foundations – mostly likely quite early in lawyers’ careers. A formal, strategic plan for client succession is an obvious must-do. Peer accountability, not just top-down exhortations, is also essential for building a culture where unintentional biases are recognized and stamped out. And real-term metrics to keep people’s attention focused on the process, including actions for those early years like sponsorship behaviors and outcomes, are essential. The data are unambiguous. Is your plan?
*Briscoe & Von Nordenflycht, “Which path to power? Workplace networks and the relative effectiveness of inheritance and rainmaking strategies for professional partners,” Journal of Professions and Organizations, 2014.