Seeing the Way to Equal Pay: Law Firms Must Scrutinize How They Award Bonuses and Promotions

If you see women wearing red today, here’s why: It’s Pay Equity Day, and the color symbolizes women being “in the red” due to gender-based pay discrepancies. Pay Equity Day also highlights how much longer women must work to earn what men made in the previous year.

Equal Pay for Equal Work

Federal laws bar gender-based pay discrimination. And states, too, have passed their own laws mandating equal pay for comparable work. California’s Fair Pay Law, the country’s toughest, requires all employees performing “substantially similar” work be equally compensated. New Jersey and New York State also prohibit employers from using gender as a factor in setting pay. Effective July 1, 2018, Massachusetts employers can no longer ask job candidates for their salary history. Proponents say it will help correct the gender-based pay gap that follows women from one job to the next.

The Legal Industry’s Pay Gap

Gender-based discrepancies remain, and the legal profession is no exception. The American Bar Association’s Task Force on Gender Equity found widespread disparities between the salaries of male and female lawyers. Women receive fewer bonuses than their male counterparts. They were also less likely to make partner. Women also don’t receive enough credit for rainmaking.
Female attorneys alleging gender bias at their firms face complications. Derision, demotion, reassignment to low-level tasks, even dismissal has occurred in retaliation. Some have fired back with lawsuits. Chadbourne & Parke was hit with a $100 million gender-bias claim last year and a Sedgwick partner is seeking $200 million in damages. A LeClair Ryan partner has made similar allegations about her experiences.

Women Speaking Up

Women are more willing to self-advocate when their male counterpartes receive advancement opportunities and paychecks. “In the past, lawyers who made it the senior ranks would not have dared to rock the boat,” said Michele Coleman Mayes, chair of the American Bar Association’s Commission on Women in the Profession.
Law firms committed to equal pay for all their lawyers first must understand if and where they’re falling short. An honest analysis of the factors driving compensation decisions should occur. Explore whether women are penalized for taking time off to bear and raise children. What is their role in bringing new business to the practice? It their contribution minimized or ignored?

Self-Audit Strategies

Firms should self-audit to determine how pay is awarded. Management may struggle to correct inequities because a mix of factors. Determining promotions isn’t easy. Firms should consider oral and written skills, as well as the potential for business development. These things can be hard to quantify. Billable hours can no longer be the basis for awarding bonuses and promotions.
A comprehensive analysis of pay and bonuses might highlight pay gaps that aren’t explained by other factors. An effective remediation strategy will set policies and practices governing starting salaries. Pay gaps often persist because women often receive lower starting salaries than men. Even with comparable experience and skills, women suffer. And future raises are tied to current pay.

Steps to Equal Pay

Hiring managers should stop asking candidates for their salary history. They should encourage women to be powerful advocates for themselves when negotiating compensation. Law firms stand to benefit by instituting non-adversarial procedures to raise compensation concerns.

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