November 4, 2022
A recent Law 360 story by Carolina Bolado, “Start With Fixing Gender Billable Rate Gap, IBA Panel Says” reports that law firms looking to retain their female talent need to start by narrowing the billable rate gap, which experts at the International Bar Association conference in Miami called the "Rosetta Stone" of the gender gap issue. At an IBA panel on how to keep women in the profession, Michael Ellenhorn, CEO of Decipher, a data intelligence firm focused on the lateral legal market, said the data show women routinely bill more hours than their male counterparts but recover less money for that work. Addressing this gap in billable rates is where firms need to start, he said.
"It's the baseline where this problem can be solved," Ellenhorn said. "At a minimum, women partners need to be compensated and remunerated at the same rate as their male counterparts. From an objective standpoint, that is one way we can move the ball down the pitch." The panelists, a global group gathered together at the IBA conference to discuss the gender inequality problem, said part of the issue is that many managing partners don't even realize that there is a problem.
Hilarie Bass, the former co-president of Greenberg Traurig LLP who now runs the Bass Institute for Diversity and Inclusion, said that a study conducted during her tenure as American Bar Association president in 2017-2018 found that 91% of law firm leaders believe they are advocates of gender diversity. The study found three-quarters of leaders believe that they are completely objective and committed to elevating women to equity partner status and that they are successful in retaining women.
But the female respondents to the survey did not agree. A majority of women in the survey said they were overlooked for advancement and were compensated at a lower level than comparable male colleagues, Bass said. Many also felt they were treated as a token representative for diversity, which Bass said is becoming more of an issue as clients demand diverse legal teams. Bass said women reported being brought in to pitch the client but being sidelined not long afterward.
Ellenhorn said firms need to start by measuring data, in particular the comparison between average realized rates for male and female partners and how the firm apportions origination credit. "It's very simple to do," Ellenhorn said. "Those two data points will get you a long way to understanding what the mix is in each of your firms." He added that his group has found that men tend to over-forecast their books of business and then underperform, while women in general under-forecast and overperform. Firms need to stop penalizing women for doing this, not just in the lateral market but during firms' business and budget planning processes, he said.
Ellenhorn said his organization has looked at thousands of lateral partner questionnaires, which are forms lawyers fill out when they move from one firm to another. He said that while women make up just one-fifth of equity partners, they make up 31% of lateral partner moves. "You start to scratch your head a little bit about what is going on in the market," Ellenhorn said. And unlike their male counterparts, women depart and oftentimes within the data set they don't show up somewhere else. In the last two years in the U.S., that's about 8,000 women partners who have likely disappeared from the profession."