Forgive me for being cynical, but I'm not at all convinced that law firm managers are losing sleep when women lawyers fly the coop.
I'm reacting to a recent article in The American Lawyer ("What It Costs when Talent Walks Out the Door") by Paola Cecchi-Dimeglio, a behavioral economist at Harvard Law School. Her thesis is that it's costly to replace female talent, and that it behooves firms to make sure that women stay.
Cecchi-Dimeglio writes that "diversity pays," and that firms with "significant numbers of women leaders" are better at "solving complex problems, which leads to increased innovation and drives financial growth."
The argument that diverse teams (in this case, gender diversity rather than ethnic) get better results has been in vogue in recent years, but the author uses another tact to drive home her point: the replacement cost for talent. She writes:
It takes longer to replace female talent. The time required for replacing a male lawyer ranges from six to 11 months. Replacing a female lawyer requires seven to 14 months. This finding has implications in terms of cost, revenue loss and loss of performance within the organization.
My research also indicates that the cost of replacing a female lawyer is higher than the cost of replacing a male counterpart. The range varied based on the practice group the attorney belonged to, but the differential is about 10 percent for junior and senior associates and 20 percent for partners.
Specifically, concerning male lawyers, it costs 100-140 percent of salary to replace junior associates; 140-200 percent for senior associates; and 200-380 percent for partners. By contrast, the cost of replacing female lawyers is 100-150 percent of salary for junior associates; 150-210 percent for senior associates; and 210-400 percent for partners.
I'll leave it to those of you versed in law firm economics to quibble with her numbers, but what I'm skeptical about is that firms would mourn the loss of female talent—much less feel the need to replace her. To think that firms would consider the replacement cost for a woman is to assume that gender parity is a top priority—which I'm not convinced. (Need I remind you that women are still only 17-18 percent of all equity partners?)
I posed these issues to Cecchi-Dimeglio, and she tells me that there's a direct correlation between diversity and revenue. She says she has been studying the statistics of "several firms—domestic and international" (she won't say how many at this point) for an upcoming book. "When you show firms that they're gaining revenue by diversifying, they have to be crazy not to diversify," she says. "It's not a moral imperative but a financial one."
Perhaps her book will make the relationship clearer. For now, though, there's skepticism. To start with the obvious, men dominate the ranks of big rainmakers, so who cares if women with scant business leave?
"I agree that firms should treat diverse partners better if they want them to stay," says Merle Vaughn, who leads the diversity practice group at recruiting firm Major, Lindsey & Africa. "But the need to replace partners is more strategic"—and that, she adds, means what counts is who's bringing in the big bucks.
Cecchi-Dimeglio warns that it's short-sighted to put so much emphasis on the revenue partners generate. She writes: "The departure of top female talent impacts firms in some ways that can be hard to see. It is often felt acutely by the teammates they leave behind. And their impact as role models in a profession with relatively few women at the very top cannot be underestimated."
It would be nice to think that a woman's departure would have such a ripple effect, but I don't think that's always the case. Losing a leader—male or female—has repercussions for those left behind, and whether there's a larger significance to a woman's departure depends on the individual and the circumstances.