The Equity Gap: A Special Report on Women in the Partnership

Transcription

1 The Equity Gap: A Special Report on Women in the Partnership The National Law Journal July 23, 2012 Virtually every firm claims to be committed to helping women succeed, and they all seem to offer an array of women's programs affinity groups, business-development training and work/life balance initiatives. But are large firms committed to promoting women into the equity partnership? Our study of the largest firms in the United States by headcount shows that women represent just 15 percent of equity partners. At just five firms surveyed, women make up more than 25 percent of equity partners. 1

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10 The data included in this report was collected as part of the 2012 NLJ 250/Am Law 200 Survey and reflects the average full-time equivalent number of attorneys for We ranked 221 of the 258 NLJ 250 and Am Law 200 firms based on their percentage female equity partners. Only firms providing the gender breakdowns of their equity partners were ranked. Firms with a single partnership tier are noted with an asterisk. Ties are broken by more granular data if available, and by the percentage of all women attorneys where necessary. - Tom Broucksou At big firms, equity gender gap continues Survey shows slow progress for women partners at large firms. By Vivia ChenAll Articles The National Law Journal July 23, 2012 Virtually every firm claims that it is committed to helping women succeed. And they all seem to offer an array of women's programs affinity groups, business-development training and work/life balance initiatives. Firms talk a good line, but how many can demonstrate that they are promoting a strong percentage of women into the equity-partner ranks? We probed that question by compiling partnership data as part of The National Law Journal's NLJ 250 survey, which ranks the largest firms in the United States by headcount. Data collected from 221 firms show that women represent 15.1 percent of equity partners. Among all partners equity and nonequity the figure is 18.8 percent. That's progress since 2003, when NLJ affiliate The American Lawyer compiled similar data, though the pace of change has been slow and tenuous. The overall percentage of women in equity and nonequity partner positions then was 16 percent. As for equity partners, the National Association of Women Lawyers said in a 2011 report that women have been "fixed" at 15 percent of the equity slots for the past 20 years. At just five firms surveyed, women make up more than 25 percent of equity partners. These firms are Fragomen, Del Rey, Bernsen & Loewy (42 percent female equity partners); Jackson Kelly (28.4 percent); Ice Miller (26.9 percent); Best Best & Krieger (26.7 percent); and Ford & Harrison (26.1 percent). Regional and highly specialized firms dominate the top 20 firms with the highest percentage of female equity partners. Among the top five, for instance, New York's Fragomen specializes in immigration; West Virginia's Jackson Kelly in energy and mining; Indianapolis' Ice Miller in employment law and municipal finance; California's Best Best in public agencies; and Ford & Harrison in employment law. 10

11 Wilmer Cutler Pickering Hale and Dorr, with 23.2 percent women equity partners, is the largest firm in the top 20 and the only one that ranks in the first tier of the NLJ 250 and the Am Law 200, The American Lawyer's survey of the highest-grossing firms in the United States. AN ANOMALY? Is a Wilmer a lonely anomaly among the top-earning firms? There are signs that other national and Wall Street players are gaining ground. Nine years ago, Davis Polk & Wardwell was the only Am Law 100 firm with more than 20 percent women in its equity ranks. The list now includes Davis Polk and Wilmer, as well as Covington & Burling; Manatt, Phelps & Phillips; Paul, Weiss, Rifkind, Wharton & Garrison; Ropes & Gray; and Willkie Farr & Gallagher. Another positive sign: Women are gaining ground at firms with high profits. Of 18 firms with profits per partner exceeding $2 million, 11 have equity partnerships that include more than 15 percent women. Three in that group have more than 20 percent: Paul Weiss ($3.095 million); Willkie Farr ($2.145 million); and Davis Polk ($2.3 million). What many of the high-profit firms share is the single-tier partnership structure. For whatever reason, women seem to fare better in one-tier firms. (According to our research, women make up 17.6 percent of the equity partners in single-tier firms, but only 14.7 percent in those with two tiers.) Women in two-tier systems tend to get pushed into the nonequity ranks, explained Elizabeth Tursi, the chair of Women in Law Empowerment Forum, a group that tracks women's progress in the legal profession: "I think it's no secret that women are disproportionately affected by firms with more than one tier," Tursi said. For the most part, the needle seems to be moving in the upward direction for women equity partners at the largest, most profitable firms albeit slowly. Nine years ago, for instance, firms like Cravath, Swaine & Moore and Sullivan & Cromwell had female equity partner numbers in the single digits (8.9 and 9.9 percent, respectively). Today, they have almost doubled those numbers (Cravath now has 15.5 percent; Sullivan 18 percent). Less dramatic, but also notable, are gains women made at other Wall Street firms like Cahill Gordon & Reindel (from 12.4 to 19.5 percent); Simpson Thacher & Bartlett (12.2 to 19.4 percent); Paul Weiss (13.2 to 20.6 percent); and Willkie Farr (13.8 to 20.6 percent). WOMEN EQUITY PARTNERS Glass ceiling? Not at Fragomen. With 42 percent of its equity partnerships held by women, the New York player leads the big firm pack. By Celia Llopis-JepsenAll Articles The National Law Journal July 23, 2012 When Parisa Karaahmet joined Fragomen, Del Rey, Bernsen & Loewy in 2000, she left behind a career in government, in part because she saw little room for advancement. "It was a great starting experience," said Karaahmet, who worked for four years as a lawyer for the agency formerly known as the Immigration and Naturalization Service, "but I never felt I could fulfill my ambitions there." At Fragomen, she said, "I was told from Day 1 there was nothing I couldn't achieve, and partnership was possible for anyone." That was certainly the case for the New York-based Karaahmet, who made partner in 2007 and is one of 22 female equity partners at Fragomen Del Rey. Data collected by The National Law Journal from NLJ 250 firms show that Fragomen had the highest percentage of women in its 11

12 equity partnership. Though no law firm on the list cracked the 50 percent mark, Fragomen Del Rey came closest at 42 percent. The firm has 306 lawyers; 200 are women and 106 are men. Name partner and executive committee member Austin Fragomen said he expects the number of women equity partners at the firm to grow: "I think over a period of time, we'll have a balance of partners." Fragomen said the firm's robust proportion of female equity partners is the result of simply hiring and promoting the best candidates. Fragomen Del Rey which focuses on immigration law and related matters does not rely on internal quotas or programs designed to advance women, and some say that's a good thing. "If we had targets, I think it would be somewhat contrived," said Gwendolyn Robosson, who opened the firm's New Jersey office in 1988 after working in New York and Connecticut. "It's just not necessary." Established in 1951 under the name Elmer Fried P.C., Fragomen Del Rey didn't appoint its first female partner, New York-based Noreen Quirk, until Since then, however, the women partner ranks have grown sharply. By the time the firm created an executive committee in 2003, a third of its partners were women. Women also hold prominent leadership positions at Fragomen Del Rey. The executive committee has included women since its inception, and both the firm's current chief financial officer and chief human resources officer are women. Women established 10 of the firm's 39 offices and currently manage 13 of them. They also manage three of the six practice groups in the New York headquarters office. Fragomen Del Rey scores high in other diversity-related categories as well, placing third among the more than 200 firms surveyed for this year's edition of NLJ affiliate The American Lawyer's annual Diversity Scorecard. For Karaahmet, that diversity is part of what makes the firm so attractive to her and potentially appealing to the lawyers she helps recruit. "I try to tell people when I interview them, there's a tall ladder to climb," she said. "But it's climbable." Celia Llopis-Jepsen reports for The American Lawyer. At the bottom, where few women rise Sara Randazzo The National Law Journal The first step to solving a problem is recognizing that you have one. That's the mentality that guided Brown Rudnick chairman and chief executive officer Joseph Ryan after he realized three years ago that his firm had an abysmally small number of female equity partners. So Ryan brought in outside consultants to help perform a comprehensive evaluation of the firm's operations, then used the results of that effort to craft a plan aimed at addressing the gender imbalance. 12

13 Despite that push, the ratio of Brown Rudnick equity partners who are women stands at 6.8 percent one of the lowest figures among the country's large law firms, according to data compiled by The National Law Journal. "Unfortunately, the frustrating part is that it takes time," Ryan said. "While the numbers are very disappointing as they currently exist, hopefully we can change that." Almost all of the 10 firms at the bottom of the NLJ's list all of which have a ratio of women equity partners below 8 percent are headquartered on the East Coast. Five are based in New York: Curtis, Mallet-Prevost, Colt & Mosle (which does not have a single woman equity partner); Cadwalader, Wickersham & Taft (6.5 percent); Kasowitz, Benson, Torres & Friedman (7.4 percent); Milbank, Tweed, Hadley & McCloy (7.6 percent); and Wachtell, Lipton, Rosen & Katz (7.7 percent). The other four are Brown Rudnick (Boston); Choate, Hall & Stewart (Boston, 7.7 percent); Dickstein Shapiro (Washington, 7.3 percent); and Stevens & Lee (Reading, Pa., 7.1 percent). Rounding out the list is Kansas City, Mo.-based Lathrop & Gage (7.0 percent). Of the 10, only Wachtell qualifies under NLJ affiliate The American Lawyer's definition as a single-tier partnership, meaning that more than 50 percent of compensation each partner earns is variable and dependent on profit sharing. Firm leaders at Curtis, Lathrop, Milbank, Stevens and Wachtell did not respond to repeated requests for comment. Leaders of other firms in the bottom 10, including Kasowitz and Dickstein, said they would have fared better in the rankings if not for the survey's definition of equity partner. In a statement, Cadwalader partner Melissa Hinkle said her firm is committed to bolstering its recruiting, retention and promotion initiatives geared toward women, "not just for the sake of the numbers but because of the importance we place on having women attorneys engaged in our business and decision making." Choate's co-managing partners John Nadas and William Gelnaw said in a statement that the firm is committed to increasing the number through internal promotions and lateral hires, noting that women equity partners already hold significant leadership roles at Choate. Several people say the underrepresentation of women in law firms' equity partnership ranks often comes down to one key factor: "At the simplest level, they don't have books of business," said San Francisco-based legal consultant Sara Holtz, who specializes in helping female lawyers generate business. Dickstein Shapiro chairman Michael Nannes agreed: "If you asked me to identify one factor that will most assuredly advance a woman higher, it's the production of business." As to why women lack books of business, Holtz offered two explanations. First, she said, women are less likely to inherit business than men and more likely to face client bias. Second, she added, women are sometimes more reluctant to ask for business and promote themselves. "Across the board in the legal profession, I've found male partners get more support in building their practices, in being given favorable opportunities for introductions, as well as in being assigned on top matters," said Rebecca Rosenberger Smolen, who left Stevens & Lee earlier this year to form a trust and estate boutique called Bala Law Group. "We're in a culture where men are still asking women to marry them and go on dates in greater frequency [than women asking men]. Business-getting comes down to that it comes down to being the asker and pursuing opportunities." Smolen said that, although Stevens & Lee is no worse than other large firms, she does think the firm fails at giving equal support to women. Pressure to keep up the firm's relatively high profits 13

14 per partner $1.02 million in 2011 also makes it harder for women to crack the top ranks there, she said. Most people in the industry agree that, although the inequity is persistent, it can improve if women continue to push for equal opportunities and firms become cognizant of ways to change the system. "Can women who aspire to become equity partners do something so that they do?" Holt asked. "Absolutely." Sara Randazzo is a reporter for The American Lawyer. 14