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Ladies, Why Do You Put Up with the Black Box?

Vivia Chen

June 28, 2018

Woman-box-ArtDear Sisters:

Please enlighten me: Why do smart, accomplished women like you choose to work in a firm where information about compensation is guarded like the nuclear code? 

I'm mainly talking to you: women of Jones Day. (As y'all know, the firm got sued for gender discrimination by former partner Wendy Moore, who alleges that the firm's closed compensation system favors men. She notes in her complaint that she was paid about the same amount—$810,000—as a sixth year male associate.) But I also want to talk to the rest of you who toil at those  firms that still maintain closed compensation systems, such as Greenberg Traurig and Ropes & Gray.

I know, some of you want me to buzz off. You say that you're fine and, indeed, happier at a firm where no one talks about money. You say you don't want to get all worked up about some colleague who might be bagging home $5,000 or $10,000 more. You say that law is a profession, not some kind of monetary pursuit and that the black box reinforces those values.

Good for you.

But, tell me, are you not at all curious what that not-very-smart-nor-hardworking-brown-noser is making? And are you truly convinced that the gods on the compensation committee are always fair and wise?

And to the ladies at Jones Day, let me ask this: How did you feel when you learned that a sixth-year associate made $810,000—a sum that only got revealed because he joined the Trump administration and had to file a financial disclosure form? Be honest now, weren't you at least a bit shocked?

The closed compensation system is based on the premise that "what you don’t know won’t hurt you," says Kerrie Campbell, who settled her lawsuit for gender discrimination a few months ago against Chadbourne & Parke (now Norton Rose Fulbright). "How paternalistic is that mindset? In fact, the black box prevents accountability and facilitates unchecked, unfair and unacceptable gender pay disparities."  

Of course, the black box has its defenders. One is William Henderson, a professor at the University of Indiana Maurer School of Law and an expert on the legal profession. He was a summer associate at Jones Day and he says he generally admires its system. "Their model is coherent," Henderson says, adding that Jones Day is serious about promoting collegiality. Not only is the subject of compensation verboten at the firm ("I was told that a partner can be fired for talking about compensation to another partner), he explains, adding, "Jones Day does not track origination credit."

Henderson admits, however, that he might have a white, male perspective on the issue. "I told my class that I liked the black box, and one woman said to me, 'Of course you do. You're a man'."

Well, that sums it up right there: Men think the system works just fine, so why change it?

The problem with the black box system is that it "does not have the community controls [of an open system]," says a male AmLaw 100 partner who worked at Ropes & Gray, a closed system firm. "Presumably, people believe it is based on trust and a fair presentation of the data." But who's presenting the "softer" data," he asks. The problem, he adds, is that there always lingering suspicion that the decision makers will be more swayed by their buddies.

But do women thrive more in a transparent system? "I’ve worked at firms with closed compensation and open compensation systems," says Jennifer Selendy, a founding partner of Selendy & Gay, who is also a former partner at Quinn Emanuel and Kirkland & Ellis. (Selendy says neither Kirkland nor Quinn offers "transparent criteria" about compensation, though neither comes close to the closed system of Jones Day.)  "In my experience, women are screwed either way." 

Yes, women are probably screwed no matter what. But wouldn't you want to know by how much?

As always,

The Careerist

 

Email me: vchen@alm.com

Twitter: @lawcareerist

 

 

 

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About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: VChen@alm.com

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