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New Study Statistically Examines Differences in Compensation When Considering Gender
A recent study led by Harry Keshet examines gender’s role in compensation as equity partners in Law Firms.
The Study, Compensation in Law Firms: Why Women Equity Partners Are Compensated Less for the Same Billable Hours and Business Originations as Male Equity Partners seeks to answer questions regarding how gender effects compensation. Keshet Consulting has crunched numbers and statistically mined through to find insights and patterns or correlations-effectively to draw meaning from the data.
The findings were very clear, and showed that compensation is gender based, and that male equity partners receive more compensation than female equity partners. “The fact is true: women and male equity partners bill the same number of hours, generate the same levels of origination, have the same level of law firm tenure and work in the same size of law firms.”
The entire study included 915 male respondents and 814 female respondents. 1269 were white, 420 were non-white, 856 were equity partners, 342 were non-equity partners, and 463 were associates.
Data crunching showed the following: “Overall, male equity partners (MEPs) are more highly compensated than female equity partners (FEPs), with MEPs reporting on average $166,932 more in compensation. For equity partners, billable hours and compensation were weakly correlated. Interestingly, billable hours and compensation were weakly correlated for equity partners.” For equity partners with less than 1800 billable hours, men report $159,876 more in compensation. For equity partners who bill more than 1800 hours , men report $249,564 more in compensation. In terms of tenured positions, MEPs receive higher compensation than FEPs in their respective tenure groups. One point of intrigue noted from the study was that “the difference in compensation between MEPs and FEPs increases with the length of firm tenure. At 21 years or more, the difference in mean compensation between MEPs and FEPs is $160,760.” This point would seem to discourage lateral moves. Also interesting to note, the differences in compensation considering gender is more significant for smaller firms than for larger ones.
In terms of race, white male equity partners (WMEP) reported higher mean compensation than White Female equity partners (WFEP), receiving a mean compensation of $658,140, compared to $521,900. To consider race by gender, non-white male equity partners, (NWMEPs) reported $643,108 in terms of compensation, while non-white female equity partners (NWFEPs) reported $407,620. To establish an ordering from lowest to highest in earned compensation, on the bottom of the list are the NWFEPs, then the WFEPs, then the NWMEPs, and on top of the compensation chain, are the WMEPs.
In comparison of all groupings of tenure/untenured track, over 1800 billable hours or not, “NWFEPs received the lowest mean compensation of any gender/racial group. White non-white MEPs received higher compensation at the highest billing group.” The study finalizes, “White male and non-white male equity partners receive higher compensation than white female and non-white female equity partners at nearly every level.” Adding a few more interesting details, the study also shows that for partners 21 years or more, white male equity partners are two thirds of all partners, and that white female equity partners are a fourth of all partners. Non-white males make up about 13% of the partners and non-white females make up almost 2% of the partners. Ultimately this data reflects the “continual difficulty of non-white women attorneys to become partners and to advance in partner tenure.” Lastly, the data shows increasing diversity over time in terms of gender and race.