U.S. Markets closed

“Up or out” with no pause button: Why there’s a gender pay gap in law

Cassie Werber

Progress on the gender pay gap has been achingly slow. Quartz is digging into the cultural and structural issues that make reaching gender pay parity harder in major industries. How does the big-picture impression of a field differ from women’s experience on the ground? Who is making progress, and how? Our first industry in focus: Law.

Imagine two lawyers. One spends 40 hours a week working on their firm’s highest-value projects—challenging, high-earning, high-profile work. The other spends exactly the same number of hours on projects that are no easier, but bring in less revenue. At the end of a year, one is promoted.

Which of these lawyers is a man, and which a woman?

This thought experiment comes courtesy of Bridget Deiters, a lawyer who recently opened the London office of legal technology company InCloudCounsel, after years in more traditional branches of the industry. It’s likely the hard-working lawyer assigned to the less stellar cases is a woman, given the trends seen across the industry, but private companies have no incentive to share such data: “There’s zero chance they would show us those stats,” Deiters said.

These kinds of decisions—not only who gets promoted, but who gets the most valuable work—are hard to pick apart, in a culture that’s difficult to change. Wage discrimination that’s obvious and systemic has become unacceptable and illegal in many parts of the world, though it still exists, and some governments are at least trying to push companies to pay men and women equally. But a frustrating lack of transparency about what factors create and maintain gender pay gaps will be familiar to people battling bias and disparate wages in a huge range of fields.

Law, overall, treats women more equally than do some other industries, and less equally than others. It’s an interesting case study because some of the most rigidly held traditions are finally loosening (in part because some companies have been forced to disclose pay gap information) and, of course, because the law as a profession is concerned with balance and fairness—or it should be.

One track mind

People choosing to study law do so for a combination of reasons, among them professional status, security, money, interesting work, and maybe even the hope of making the world a better place. Currently, more women than men enter the ranks: In the US, women accounted for more than 50% of law school graduates in 2017, according to a Law 360 study. In the UK, almost 69% of students enrolling in law courses in 2017-18 were women.

But law as a profession, and especially its top ranks, doesn’t reflect the pipeline. Only 35% of lawyers and 20% of partners at US firms are women. The UK averages are higher, but not in comparison with the law student body: In 2017, women made up almost half the lawyer workforce, but just 33% of partners, according to the Solicitors Regulation Authority.

Deiters, a Georgetown graduate who worked for years at large corporate law firms in New York and London, points out a number of deep structural problems with the way law is practiced at the highest levels. Many firms have a “partner track” system, whereby lawyers work extremely hard for between seven and ten years in the hope of securing a partnership. If they don’t make partner, there’s an assumption that most will leave. These years, Deiters notes, happen at exactly the time when women generally need to make decisions about having children.

“That coincidence of the life track and partner track are, I think, a huge reason why women are underrepresented in the higher-paid ranks of law firms,” Deiters said. She cites a stat to backup her argument: Half of women who leave law firms say they do so because of dependent-care responsibilities.

Women with college degrees living in urban areas in the US tend to have their first children in their early 30s, she points out, theorizing that women with advanced degrees might delay even longer in order to make sure their career is underway. (A similar dynamic is at work in the UK.) In law, that means mid-career female lawyers might have to decide between staying in a job that makes demands on their time that are incompatible with starting a family or, potentially, foregoing partnership entirely—and with it, the ultimate prizes that a law career offers.

Deiters calls it the “up or out” partner track that most law firms have, where you either make partner or leave the firm. There typically is no middle way, and no way to slow the process down. “There is no sort of ‘purgatory’ for people who are trying to decide how they’re going to balance their lives,” she says.

In this sense—the coincidence of biological imperatives with key work years—law isn’t unique from a range of other careers. But in the law, because of the pressure to perform and achieve, or leave, there is an extremely clear contrast between the number of women who enter firms and those ever make it above the partner glass ceiling. When the UK Law Society asked almost 8,000 male and female lawyers what the blocks were to achieving diversity in lawyers’ ranks, 91% said the profession needed to become more flexible. Alongside that rigidity, the biggest problems respondents identified included encountering unconscious bias, an unacceptable work-life balance demanded to reach senior positions, and “traditional” networks providing routes to promotion.

Market forces

Law firms might respond that, like other businesses, they’re subject to their clients’ expectations.

Supply and demand drive decisions in law, as elsewhere. “[If] a client demands that you staff someone who will be available for the next year, on a deal or on a case, you can’t say to that client ‘one of our associates is leaving’… [or] he or she has dependent care,” Deiters says. “The client will say, ‘Get someone else then.’”

But there’s some evidence that clients are, in fact, beginning to take note of the role they play in law’s culture of grueling commitment. In January 2019, 170 general counsel and corporate legal officers at firms as diverse as Google Fiber, Etsy, and Heineken, signed an open letter calling out law firms for being “largely male and largely white,” and saying they would make it a priority to take their business to law firms where diversity was high on the agenda. Deiters cited the letter as the budding of a necessarily “two-pronged approach” to solving law’s structural issues—part comes from law firms, and part from clients, governments, and other sources of social pressure.

That pressure is growing, driven by greater transparency. Our imaginary example of a male lawyer getting higher-value work than a woman working at the same level makes clear that it’s hard to know what’s actually happening without data. But increasingly, data are available.

As of last year, all UK companies with more than 250 employees have to report their gender pay gap. The data give a useful snapshot and open up the possibility of comparing sectors or individual large companies. Many of those companies operate internationally, or are comparable to firms headquartered elsewhere, making the UK data a useful touchstone to help us better understand pay gaps.

Last year, after the first round of reporting, a row kicked off.

Big law, accounting, and consultancy firms, some commentators noted, had interpreted “employees” in such a way that it omitted partners, effectively excluding everyone in the upper echelons of the businesses (paywall.) Under pressure, the five “magic circle” law firms—huge, internationally known, London-based law houses—one by one revealed their pay gaps including partners. When the time came to report the numbers this year, they all reported data both with and without partners.

The difference is stark. Freshfields Bruckhaus Deringer, a leading London firm with a staff of 4,500 in the UK, in 2018 reported (pdf) that its male employees earned an average of 5.7% more per hour (excluding bonuses) than its female employees. When partners were included, that difference increased tenfold, to 57.6%. The partner and non-partner gaps at other firms are comparable.

Demographics play a massive part in creating the difference in pay between men and women overall. A high proportion of legal secretaries are women. Partners, meanwhile, have a stake in their firm and huge incentives to stay there, so the most experienced and highest paid are likely to be those who have been at the firm for longest, in many cases for decades. In 2019, many of those will be men who were made partners in a time when—by most people’s admission—things were far less fair.

In March 2019, Glassdoor, a firm that tracks salaries and benefits, released pay gap comparison figures for eight countries, including the US and UK, in its second such report (pdf). Glassdoor reports a “raw” gender pay gap between men and women, based simply on average compared earnings, of 17% overall. It also calculated an adjusted gap, intended to be a better “apples-to-apples” comparison, that took into account factors like seniority, age, and role type. After adjustments, the overall global male pay advantage was 4.9%. The firm noted that the gap has narrowed slightly from its previous report in 2016.

Glassdoor was able to analyze its US data by industry. (It based its US findings on 426,512 salaries reported through its platform, noting that only in the US was the sample size big enough to break it down by industry.) In Accounting & Legal, which is as granular as the report gets, men had a 4.1% salary advantage over women once “apples-to-apples” adjustments for factors like seniority had been made. Though the data isn’t global, Glassdoor said that the makeup of the US workforce isn’t markedly different to others in the industrialized world, making it a reasonable proxy. Accounting & Legal’s pay gap falls in the middle of the industry spectrum—the biggest gap is joint between media and retail at 6.4%, while the smallest is biotech and pharmaceuticals at 2.2%. Law’s pay gap isn’t the most egregious of any industry, but it certainly exists, even when adjusting for demographics.

Overall, though, the pay gap doesn’t seem to be going anywhere in a hurry. A Pew Research Center report released last month looked at the pan-industry US gender pay gap all the way back to 1980, noting that in that time it narrowed fairly quickly for a while, but that in the last 15 years change has been very slow. That pattern is recognizable globally. Firms, governments, and individuals are now deeply aware of the issue of a pay gap, and trying a range of fixes. Some are national, like mandating gender gap reporting, as the UK did last year. Companies are interrogating their hiring pipelines, paid leave policies, cultures, and biases. Will appears to be strong, but progress is slow.

Reverse engineering

Laura King, global head of people and talent at Clifford Chance, another of London’s “magic circle” firms, has a serious pay gap problem on her hands.

In 2018, Clifford Chance became the first of those five firms to include partner pay in its reported numbers. It also made the decision—since taken up by many others—to investigate and voluntarily report its ethnicity and sexuality pay gaps. This year, it reported (pdf) a mean hourly pay gap, including partners, of 68.9%. When partners were not included that fell to 21.8%.

King began to examine the demographics which corresponded to the pay gap, and started to look at things differently. If all the secretaries were women, perhaps the firm was failing to recruit men into those positions? King spearheaded changes like rewording job descriptions, and advertising the possibility of moving upward through the firm from entry-level positions. It didn’t take long, King says, to start recruiting more men into secretarial roles.

King said Clifford Chance was actively trying to change perceptions, internally, that there was no flexibility around a career at the company. She is working on a series of profiles, to be sent out to the whole firm, of people doing things differently: fathers taking parental leave; a secretary who became a senior associate; a partner in Amsterdam who took a career break when she and her wife had children.

“People I think are a bit surprised by the fact that there are quite a few of those [stories]. But people haven’t necessarily felt welcome to put their head above parapet and say, ‘I did it in a different way,'” King said. She’s seen a change in attitude over the past five years, which she relates to the arrival in the workplace of a younger generation with equality high on its agenda, and the visibility that platforms like Twitter give to both poor practice within firms and calls for improvement.

While the firm does still have a rigid track toward partnership, King said, it’s not necessarily very different to the trajectories toward powerful positions in other competitive industries, such as medicine. But, she said, “We can champion the stories in our firm [that aren’t] linear.”

King herself did things differently. Unusually for a head of talent, she’s also a partner in the firm, having practiced as a lawyer in securitization before becoming interested in people and their career paths. Her position as a partner who now works in part of the business other than law brings up a whole raft of questions, she said, of how the law firm of the future—in which, for example, technology will be so much more central—should be structured.

Answers, and questions

Deiters’ firm, InCloudCounsel, has one answer to how law might increasingly be practiced in non-traditional, technology-led firms. A web-based service company for routine legal work, it employs lawyers on a freelance basis, where they choose their own hours and workload, and fulfill their personal quotas remotely. Some, the company said, start their own law businesses, using the web-based service to provide a steady stream of work. It offers flexibility, rather than progress through a hierarchy. It’s just one example of the way law is intertwining with the gig economy, disrupting the way things have been done for decades.

As traditional models of work are increasingly shaken up, more people are asking not only how work culture can foster fairness, but also how much of the way we work is intrinsic—and how much can be reimagined. This investigation into the specifics of the gender pay gap by industry feeds into a broader debate: Do we need to work the way we do?

When it comes to law, the biggest firms are certainly making attempts to reinvent the story they tell about themselves. They’re also under pressure to make material changes, and are doing so. Technology is disrupting the status quo in this industry, as in most others. And in law, as in many fields with a long history of doing things just so, a call for more flexibility is becoming synonymous with that for equality.

This story is part of How We’ll Win 2019, a year-long exploration of the fight for gender equality. Read more stories here.

 

Sign up for the Quartz Daily Brief, our free daily newsletter with the world’s most important and interesting news.

More stories from Quartz: