When looking at the data, 2022 not only confirmed what is known throughout the profession – there aren’t enough women partners, and they still aren’t being paid equally. In fact, the compensation gap – and the gap between hiring and departures – is widening.
In 2022, more women partners departed their current positions – either left for another firm, a government or in-house job, or left the law entirely – than in 2020 or 2021. Additionally, the difference between men and women partners widened in every “business” category tracked by Decipher Investigative Intelligence since 2017 – men had an even higher Billing Rate, Book of Business, Originations, and Number of Portable Clients – with last year’s data included in the calculation.
The percentage of women who make up lateral partner hires has grown over the last decade, but hiring isn’t keeping pace with the departure of women partners. A 2019 survey by the National Association of Women Lawyers found that women make up 20% of all equity partners (crossing the 20% mark for the first time in 2018), but they also make up 31% of all departures from law firms.
One reason why: Pay inequity at the partner level is getting worse. Women partners bill more hours and report a higher number of clients on average, yet actual originations for male partners are 41% higher on average from 2017-22, a 9% increase from the previous year’s data, according to Decipher.
Here’s more information from our data desk:
Partner hiring and departures
When looking at hiring across all partner levels, women partners made up 31% of departures and 31% of hires across a 36-month period from January 2020 through the end of 2022, according to Decipher’s data.
The 31% hiring figure is interesting to note in the context of the Mansfield Rule, a Diversity Lab initiative in partnership with law firms that requires women and minorities to account for at least 30% of candidates in leadership and governance roles, equity partner promotions, and lateral positions.
|Partner Moves Since Jan. 1, 2020 (36-month snapshot)|
The percentage of women who were lateral partner hires increased at AmLaw 100 and 200 firms by about 7% from 2015 through 2019, but Decipher data shows a growth plateau over the last 36 months.
In 2015, women made up 23.6% of lateral partner hires across the AmLaw 100 and 23.3% when including the AmLaw 200. Those percentages increased to 30.3% for AmLaw 100 firms and 29.2% for the AmLaw 200 by 2019.
But as the Decipher data below shows, three years later, women partners made up 32% of lateral hires in 2022. Meanwhile, more women partners left their positions in 2022 than in either of the previous two years.
|Partner Moves Since Jan. 1, 2020 (36-month snapshot)|
The gap in partner pay
Women partners on average billed 2.6% more hours from 2017-2022, according to Decipher data, yet are earning less than male partners.
A 2018 report by recruiting firm Major, Lindsey & Africa found a 53% difference in annual earnings between men and women partners. In 2020, the MLA study found that male partners’ average compensation was still 36% higher ($1,130,000 vs. $784,000) after female partners’ compensation rose at over twice the rate of male partners’ (15% vs. 7%) from 2018 to 2020.
|Average Billable Hours|
|Averages||1,616 (+2.6%, down 0.4% from 2021)||1,576|
Why are women making less if they are billing more hours? The data confirms what many in the profession already know to be true. Male partners have a higher average billing rate, and therefore a higher average book of business, as Decipher’s data shows.
Male partners on average billed at a 17% higher rate than female partners from 2017 through 2022, resulting in a 16% higher average book of business for men.
In 2020, Decipher data revealed a 57% difference in average billing rate, with men charging $996 per hour on average, vs. $635 per hour for women partners. In 2022, women’s billing rates increased for the second straight year, but so did the men’s, almost reaching 2020 levels.
|Average Billing Rate|
|Averages||$749||$878 (+17%, up 3% from 2021)|
|Average Book (Hours X Rate)|
|Averages||$1,242,706||$1,442,978 (+16%, up 4% from 2021)|
But the greater disparity is illustrated when looking at the average of actual originations for partners from 2017-2022: 41% higher for men.
“There are several culprits” to the gender pay gap for partners, Peggy Steif Abram of the National Association of Women Lawyers told Bloomberg Law. “It’s hard to name one ‘main’ factor.”
The 2020 MLA report found “subjective and opaque decision making processes. That is, processes that are more prone to bias” in the areas of compensation and performance reviews.
A 2019 Diversity Lab survey of 70 law firms—including a majority in the AmLaw 200—found only 50% of firms track how their origination credit is given.
|Average Actual Originations|
|Averages||$2,774,335||$3,904,020 (+41%, up 9% from 2021)|
|Average Number of Portable Clients|
|Averages||9.5||12.0 (+26%, up 8% from 2021)|
While the average number of actual clients of men and women partners has remained relatively level over the last five years tracked by Decipher, male partner candidates have reported a 26% higher average number of portable clients from 2017-2022.
By overstating the number of clients they can bring over as a lateral partner hire, men could be starting higher on the compensation scale than women who take a more measured approach to estimating portable clients.
Overcome bias with a data-driven approach
Law firms’ efforts toward diversity and inclusion can’t stop with recruiting and hiring. The same data-driven strategies law firms should be applying to expand their candidate base beyond social and personal networks can also be applied to create equitable compensation policies that will help retain women partners.