Top Women Rainmakers Absent at Half of Large Law Firms

By Stephanie A. Scharf, Cheryl Tama Oblander, Marianne Trost and Elizabeth Tipton.  This article is an extract of the Report of The 2009 Survey on the Status of Women in Law Firms published by the National Association of Women Lawyers (NAWL) and the NAWL Foundation. Ms. Scharf is a Partner, Schoeman Updike Kaufman & Scharf; Ms Oblander is a Partner, Butler Rubin Saltarelli & Boyd LLP; Ms. Trost is a Principal, The Women Lawyers Coach LLC; and Ms. Tipson is an MPES Fellow, Department of Statistics, Northwestern University.

To read the full 24-page report, click here.

A lawyer’s ability to generate business is the single most determinative factor in whether a lawyer will become an equity partner. Business development is critical for the advancement of any lawyer into the upper ranks of law firm leadership and compensation. For reasons that we still do not fully understand, however, women have not achieved the same levels of rainmaking as their male counterparts.

The 2009 NAWL Survey collected hard data on the extent to which women play major rainmaking roles in large firms. Firms reported the gender of their biggest rainmaker and also reported the gender of the top ten rainmakers in the firm. These statistics are in the context of our law firm sample that had a median of 22 female equity partners and a median of 120 male equity partners.

The results are astounding, even to those of us familiar with the dynamics of legal business development. Almost half of large firms in the US (46%) have no women at all among their top ten rainmakers.

• Another third (32%) of large firms have only one woman among the top ten rainmakers in the firm.
• Some 15% of firms have two women among the top ten rainmakers.
• The remaining small number of firms (6%) had three or four women rainmakers in their top ten.
• Consistent with this picture, almost three quarters of firms (72%) have no women at all in the top five rainmakers in the firm.
• The rest of the firms typically had only 1 woman in the top five.

Terribly underrepresented

These numbers show that women lawyers are terribly underrepresented in the ranks of major rainmakers in large US firms. Our data cannot tell us whether this underrepresentation is a function of less aggressive rainmaking activities among women, or the result of “inherited” clients of the firm flowing to men, whether women are given opportunities to participate in business development on an equal footing with men, whether women are receiving credit for business development at the same rate as men, or if there is some other explanation for the observed differences.

What do our data tell us about the impact of fewer women rainmakers on compensation within a firm? The firms without any women rainmakers in their top ten have a much greater pay differential between male and female partners. And, those large firms that have three or four women in their top ten rainmakers have basically eliminated overall differences in male/female compensation.

Number of women in top ten rainmakers	Median female difference in compensation
None	$81,000 less than men
1 or 2 women	$56,000 less than men
3 or 4 women	$11,000 more than men (but few firms)

We were not able to observe a relationship between the number of women rainmakers and the percentage of female members of a firm’s highest governing committee but that is because in most firms, the percentages are too low on both statistics to allow a meaningful relationship to emerge.

The compensation gap between men and women partners

The disparity between male and female compensation at the country’s largest firms has been a subject of the NAWL Survey since its inception. The data collected each year continue to highlight the ongoing gap between what men and women earn at the most senior levels of firms.

As in previous years, the highest compensated lawyer in the nation’s largest firms continues to be male, 99% of the time. Clearly women lawyers are virtually non-existent among the elite group of those who are compensated the most by their firms. Also as in past NAWL Surveys, the 2009 data show that male equity partners in firms typically earn more than female equity partners by a substantial amount. In 2009, the median compensation reported for male equity attorneys was $565,200 and the median compensation reported for female equity attorneys was $499,350. In other words, the typical female equity partner earns only 88% of (or $65,850 less than) her median male counterpart.

In comparing this year’s results to past years, we saw a closing of the compensation gap at the equity level. However, the smaller gap is likely an overall effect of reduced compensation generally at the equity level. From 2008 to 2009, the median compensation fell for all positions and for both men and women. This decline was sharpest for equity partners, where 2009 median compensation fell below 87% of 2008 median compensation. The degree of this decrease differed for male and female equity partners, with men – higher paid on average to begin with – showing a greater reduction in median income than women. The reductions among male equity partners, though, were not so great that they came close to the lower compensation typically paid to female equity partners.

The compensation gap at the non-equity partner level does show signs of some, albeit slow improvement. In 2009, the median non-equity male partner compensation was $275,000 while the median non-equity female partner compensation was $250,000. Interpreted differently, this means that women non-equity partners in 2009 made 92% of what the median non-equity male partner made, as compared to 87% in 2008, 86% in 2007, and 84% in 2006. Firm structure does not appear to have an impact on this differential.

Smaller median differences in compensation by gender are shown at the counsel level. Perhaps one of the reasons is that the counsel position is difficult to characterize and, depending on its definition, is disproportionately affected by gender. While compensation data for counsel positions in 2009 ranged from seven figures to the very low five figures, some conclusions can be drawn. The median compensation for all counsel positions was $207,500. The median compensation for male counsel was $217,500 while the median compensation for female counsel was $192,500.

These differences are roughly the same as in past years. Not surprisingly, given the lockstep nature of most (but not all) firms in compensation of associates, the compensation of male and females at the associate level appears to be on par. As the industry explores alternative compensation approaches in response to economic pressures, it will be interesting to see whether the lockstep approach remains predominant and, if not, what effect that will have on the parity of male and female associate salaries in years to come.

Our data also show that compensation generally is affected by a firm’s structure. One tier firms had higher lawyer compensation than two tier firms at all levels. Compensation in two tier firms exceeded levels of compensation in mixed tier firms at all levels.

We have been quoted as saying, if money equals power, there is little question that with each move up the law firm ladder, power increasingly rests with male lawyers. While women begin their careers compensated at roughly the same rate as men, this parity in pay is short lived. Once women transition out of associate status and into counsel, non-equity, or equity positions in their firms, women receive less compensation than males regardless of the firm structure or status level in the firm. The severity of this discrepancy appears correlated to the structure of the firm and, ironically, worsens the higher up the partnership ladder women go.