Let's Talk Pay

The pay gap between men and women continues to persist across all professions, races, and education levels. This article will explore the current pay gap that exists in the legal profession, some of the reasons for the gap, and suggested solutions to address the issue.

Pay Gap

In Canada, for every dollar a second-year male associate earns, his female counterpart earns roughly 93 cents. A recent survey, published by the University of Toronto, showed that second-year male associates earn $5,500 more than their female counterparts largely due to differences in bonuses.[1]

In the U.S., female equity partners earn only 89% of the compensation of their male peers, despite the fact that they do comparable work.[2] A 2010 American Census Bureau Report revealed that the median income of female lawyers is only 74% of that of male lawyers.[3]

Reasons for the Pay Gap

While women and men sit alongside each other in relatively equal numbers in law school, when it comes to climbing the corporate ladder, women fall further and further behind. Women enter law school with the same qualifications as men and graduate with the same range of academic records. But, over time, many law firms have failed at retaining female lawyers and studies have shown that firms are under-promoting and under-compensating women.[4]

Historically, professional women have the largest pay gap in the entire economy.[5] Part of the problem is that females are sometimes excluded from rainmaking opportunities because partners are more likely to staff men on lucrative files. Female lawyers are also generally less likely to inherit books of business.[6]

Many factors contribute to the dearth of female partners. One notable reason is that some women have trouble generating business because they are not given the best opportunities to do so. Women are also frequently left out of the pitch or marketing team, so they tend to get less mentoring on business development and often do not have role models who can teach them how to sell.[7] Women often lack the time to develop new business because they are juggling work with their family obligations. For these understandable reasons, women are often not among the top rainmakers.

Studies find that men are two to five times more likely to make partner than women. Even those women who never take time out of the labor force have a lower chance of making partner.[8] Women are particularly underrepresented in decision-making positions, comprising only about 15-20% of those roles in firms.[9] This is related to the problem of women not having time to build new business relationships, which leads to the majority of rainmakers being men who are better compensated and are more likely to hold positions of power.

How to Reduce the Pay Gap

Women lawyers should strive to become better rainmakers. Firms need to provide business development training to female lawyers early in their careers. They should incentivize female lawyers to spend time on business development and encourage senior lawyers to share their ideas and establish mentoring relationships with female lawyers. They should also include more women on pitch teams.

Successful rainmakers are not just the lawyers who bring in work but are also those who have inherited clients from retiring partners. Firms should develop systems that create a more level playing field by ensuring a fair process for inheriting work.[10] Female lawyers can get the discussion rolling by looking at firm data to see who is inheriting work and earning credit for new business to develop strategies for a fairer system.

It is also clear that firms need to increase the number of women on compensation committees and improve the compensation system. For many firms, compensation is based on whether an associate brought in business and billed a sufficient number of hours. However, firm leaders should reward other valuable behaviors too. This includes recognizing the varied contributions that lawyers make to the long-term growth of the firm. Failure to do so negatively impacts female lawyers because they are often under informal pressures to make contributions to committees related to recruitment, associate development, and diversity. Firms should also boost the transparency of their compensation policies to help female lawyers compare their pay with male colleagues.

Last, women need to be more aggressive in negotiating compensation and less reluctant to ask for what they want. A recent Careerbuilder survey showed that 56% of workers have never asked for a raise, and women are less likely to ask than men. Meanwhile, the same survey found that two-thirds of workers who ask for a raise get one, and the success rates are virtually the same for both genders. An analysis by Salary.com found that professionals who negotiate their initial salary and renegotiate every few years stand to earn $1 million more on average during their careers than those who do not negotiate their pay.[11]

Conclusion

Female lawyers’ dissatisfaction with inequitable pay and other aspects of practice is reflected in the disproportionate rates of attrition. This should be cause for concern in a profession committed to equal opportunity and diversity. Whether through implicit bias or intentional discrimination, the data shows that female associates are not paid equitably. Firms need to have transparent compensation policies and ensure that compensation committees fairly apply those policies to male and female lawyers alike. Firms also need to provide opportunities and training for female lawyers to develop into top rainmakers. There is a long way to go before pay equity is achieved in the legal profession, but the responsibility lies with us all.

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