From the Editor

Gender Pay Gap and Other Issues: Some Answers

By Bennette D. Kramer
Over the course of the last several years in this column I have explored workplace inequalities among men and women partners in large law firms and tried to find explanations for those inequalities.  Several recent articles provide some reasons for the imbalance.

Female lawyers still lag in compensation, billing rates, and management roles.  According to a recent Catalyst analysis, 19 percent of equity partners were women in the 50 best law firms for women and in 2013 women lawyers made 78.9 percent of men lawyers’ salaries.  Report from Catalyst Knowledge Center, Women in Law in Canada and the U.S., Dec. 10, 2014.

Similarly, The Wall Street Journal reported that women constituted 17 percent of equity partners in the 200 top grossing U.S. law firms. These women equity partners had lower average billing rates than their similarly situated male counterparts.  The lower billing rates had the effect of lowering gross billings, which reduced origination credit.  Jennifer Smith, Female Lawyers Still Battle Gender Bias, WSJ.com, May 4, 2014.
This is all part of a cycle of subtle discrimination against women partners in large law firms.

Pay Gaps

Women lawyers are not the only women confronting pay gaps – pay gaps exist in other high paying professions as well.  According to Claudia Goldin, a Harvard University labor economist, women doctors and surgeons earn 71 percent of men’s wages; women financial specialists make 66 percent of what men make; and women lawyers make 82 percent of what men make.  On the other hand, occupations that offer workplace flexibility in terms of hours and location have narrowed the pay gap: women pharmacists make 91 percent of what men make and computer programmers make 90 percent.  Male and female tax preparers, ad sales agents, and human resources specialists make similar salaries.  Claire Cain Miller, Pay Gap is Because of Gender, Not Jobs, nytimes.com, April 23, 2014.

An op-ed piece in The New York Times by Sheryl Sandberg, Facebook’s chief executive officer, and Adam Grant, a professor at the Wharton School at the University of Pennsylvania, discussed new studies of women who spoke up in a business context. Sheryl Sandberg and Adam Grant, Speaking While Female, N.Y. Times, Jan. 11, 2015, p. 3. The studies concluded that women who spoke up were interrupted more frequently, punished for voicing their opinions by lower competence ratings, and could be perceived as too aggressive.  Sandberg and Grant observed:

When a woman speaks in a professional setting, she walks a tightrope. Either she’s barely heard or she’s judged too aggressive. When a man says virtually the same thing, heads nod in appreciation for his fine ideas. As a result, women often decide less is more.

In addition, Microsoft CEO Satya Nadella recently caused a furor when he suggested that women who did not ask for pay raises would be rewarded with “good karma.”  Although he apologized many times over, he let the cat out of the bag by highlighting the fact that women who push for raises are perceived negatively. Men are free to ask for raises but women must be careful when they do so. According to The Wall Street Journal, women’s failure to negotiate for higher salaries, beginning with the first job following graduate school, leads to the career-long imbalance in compensation for women, contributing to significantly smaller retirement savings. Manisha Thakor, The Long-Term Price of the Gender Pay Gap, wsj.com, Oct. 21, 2014.

The studies cited by Sandberg and Grant highlighting the different perceptions of men and women voicing their opinions and speaking up provides some explanation for the pay gap between men and women partners in law firms. If what a woman says is not noticed or listened to or, worse, contributes to a negative perception of individual women for speaking up, there appears to be a “Catch-22” trap for women:  Do you remain quiet and get negative ratings for not having any opinions or do you speak up and jeopardize your chances for advancement and higher pay?

As Nadella let slip, women who keep quiet should expect “good karma” if they do not seek raises, but the result is lower compensation throughout their careers and into retirement.

Gender Differences

Two articles in The New York Times look at the gender differences in the workplace between male and female graduates of the Stanford University class of 1984 and Harvard Business School alumni in their 20s.  The article about the Stanford alumni focused on why so many male graduates were hugely successful entrepreneurial players in the technology industry, while very few women were.  The conclusion was that the men were more willing to take risks and better able to secure the necessary capital, which was obtained for the most part only through “male-run venture firms.”  Women, instead, took safer routes and entered into law, finance, and medicine.  Jodi Kantor, A Gender Gap More Powerful than the Internet, N.Y. Times, Dec. 23, 2014, p. 1.  There were a few exceptions, but none of the women matched their male classmates’ successes.

The survey of Harvard Business School graduates examined the different expectations for careers and family lives of men and women graduates and how those expectations played out after graduation.  The majority of men expected that their careers would be the most important in the family and their spouses would assume a greater percentage of the child care.  Women expected that their careers would have equal importance to their spouses’ careers and that they would share child care equally.  These differing expectations led to disappointment among women graduates whose expectations have not been met.  Men’s expectations in large part have been met, leaving women with most of the child care.  For example, the highest-earning female executives with small children spend 25 hours per week on child care, while male executives spend 10.  Claire Cain Miller, Even Among Harvard Graduates, Women Fall Short of Their Work Expectations, nytimes.com, Nov. 28, 2014.

Family Friendly

The bottom line is that without family-friendly policies and attitudes generally in the U.S. and particularly in law firms, financial firms, and corporations, women will not achieve equality in pay or management positions.  It must become culturally acceptable for men to assume an equal share of child care responsibilities.  Although there are many factors in law firms that keep women partners from achieving equality, such as the lack of opportunity to serve on management and compensation committees, less success at business generating, and general attitudes about women, the requirement to work long hours at the office handicaps women who have family responsibilities.  Many women leave law firms and other jobs rather than struggle to balance long hours at the office with child care responsibilities. Workplace flexibility for both men and women would enable talented and hard working women to remain in the workplace.  The result would be a workplace that utilizes talented women rather than driving them away.

With respect to the “Catch-22” of whether to speak up or not, one idea that helped women finish their thoughts without interruption was a strict no-interruption policy at meetings.  The plan worked and teams became more effective.  Additionally, the more women in leadership roles in a company, the more the women are heard.