Gender Equity in Partner Compensation – Why It Matters and How to Do It Insert Bar Logo Here Date of Program and/or Speakers Here Task Force on Gender Equity Commission on Women in the Profession © 2013 American Bar Association Insert Bar Logo Here

THE GENDER GAP Women lawyers earn less and are less likely to advance than men lawyers. Women of color lawyers face the greatest obstacles. o Almost half of all associates are women. o The large majority of “staff” attorneys, who are not partner-eligible, are female. o Only about 15% of equity partners in law firms are women; fewer than 2% of equity partners are women of color. o About 5% of firm managing partners are women. 2

MEN OUT-EARN WOMEN AT EVERY LEVEL BEYOND ASSOCIATE The biggest difference occurs at the equity partner level. 98% of firms report that the highest-paid partner is male. Women lack influence, and often even representation, in the compensation process. Many compensation processes – or at least decisions – are not transparent. Mothers face greater obstacles than fathers. 3

WHY DO WE CARE ABOUT LACK OF PAY EQUITY? A robust and modern legal profession requires pay equity. The legal profession is dedicated to principles of fairness and merit. Success and improved finances of law firms: We are losing a large portion of talented and highly trained lawyers. These statistics must change if the law as a profession is to remain relevant and responsive to all and able to compete for our “best and brightest.” 4

WHY DO WE CARE ABOUT LACK OF PAY EQUITY? This is not simply a “pipeline” issue: Women have comprised about half of law school classes for many years, yet the under-representation of women leaders and the under-compensation of women in law firms have not changed significantly in that time. As active members and leaders of the bar, we can help all lawyers reach the success their talent and hard work warrant. 5

CHALLENGES TO ACHIEVING PAY EQUITY ABA “Glass Ceiling” Research Credit for Business Generation and Retention Succession Planning Transparency Bias Accountability 6

EFFECTIVE PRACTICES FOR LAW FIRM COMPENSATION SYSTEMS Metrics o Compare compensation, including salary, bonuses, and benefits, across demographic groups and practices. o Use these metrics to create a baseline and measure progress toward equal pay for comparable contributions year on year. o Identify and understand reasons for disparities in how similarly-situated groups of lawyers are compensated. o Eliminate implicit bias. 7

EFFECTIVE PRACTICES FOR LAW FIRM COMPENSATION SYSTEMS Transparency o Develop compensation systems that use objective criteria. o Communicate criteria so that all partners understand exactly what they need to do to reach compensation levels or points. 8

EFFECTIVE PRACTICES FOR LAW FIRM COMPENSATION SYSTEMS Origination Credit o Ensure that origination credit follows the partners who earned it–partners should not be able to "bequeath" origination credit to whomever they want. o Reward teams for developing business. Shared Business Development Opportunities o Afford women equal rainmaking opportunities– participation in client pitches and work on matters that result. 9

EFFECTIVE PRACTICES FOR LAW FIRM COMPENSATION SYSTEMS Succession Planning o Recognize that many lawyers achieve great success by “inheriting” a client or book of business. o Ensure that succession to client billing and origination credits, especially for institutional clients, is open equitably to all deserving lawyers. Equitable Credit Given for Non-Billable Firm Work o Ensure that non-billable work for the firm is valued. o Ensure such credit is viewed objectively and provided fairly and without being affected by implicit bias. 10

EFFECTIVE PRACTICES FOR LAW FIRM COMPENSATION SYSTEMS Diversity: o Ensure that compensation committees are diverse in terms of gender and race and include more than one (“token”) woman. Aim to conform to the “Rule of 3.” o Aim for maximum practice diversity as well. Dispute Resolution: o Review disputes with care and appoint diverse committees for resolving disputes over fee allocation. 11

Some Day …. Soon! “I’ve never said this to a woman before, but here goes: We’re not paying you enough.” 12

QUESTIONS? 13

Gender Equity in Partner Compensation – Why It Matters and How to Do It Insert Bar Logo Here Date of Program and/or Speakers Here Task Force on Gender Equity Commission on Women in the Profession © 2013 American Bar Association Insert Bar Logo Here