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6 posts from June 2018

June 28, 2018

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

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

 

 

 

June 26, 2018

Meet the Fat Cat Who Made $810,000 as a 6th-Year Jones Day Associate

Business-Fat-Cat-Art

Of the many alleged indignities described in Wendy Moore's complaint in her gender discrimination lawsuit against Jones Day, this one popped up at me like a crazy jack-in-the-box: A sixth year associate—male—took home $810,000—about the same amount that Moore made as an eighth-year partner at the firm. 

Holy Toledo! (Or should I say Cleveland?) That's a hell of a lot of money for an associate with only a half-dozen years under his belt. That would be an amazing sum for a 10th year associate, even a junior partner at most firms. (At Cravath, the top associate base salary is $340,000.)

So who is this super-awesome Jones Day associate who's worth this kind of dough? Is he the unsung wunderkind of Big Law? And what voodoo did he perform to justify these sky-high earnings?

His awesomeness is James Burnham, a rising star of the Trump administration who now serves as a special assistant and senior associate counsel to the President. A 2009 graduate of the University of Chicago Law School, he completed his undergraduate studies at the University of Texas. He also clerked for Alex Kozinski, the brilliant but controversial former judge of the Ninth Circuit.

I know what you're thinking: Burnham must have clerked for the U.S. Supreme Court after his Kozinski's stint, then landed at Jones Day with a big fat $300,000-plus bonus—which would explain his inflated earnings.

Wrong! 

While his academic pedigree is solid, it does not evince superstardom. Still, he did work on some very high-profile matters, like representing former Virginia Governor Robert McDonnell in his corruption case and the Mitt Romney’s presidential campaign committee. 

Much more intriguing about Burnham is what's not on his official resume.

Which brings me back to Moore's complaint. Remember, how she alleges that she was paid unfairly at Jones Day because the firm "operates as a fraternity" and that "male senior partners mentor male associates and assist them in climbing the ranks to partnership"?

Burnham arguably exemplifies that exclusive male order. He married right into it: In 2010, he wedded a law school classmate, whose father Robert Mittelstaedt, was the head of Jones Day's San Francisco office. Mittelstaedt is now of counsel. (Oh, the things you learn from the New York Times wedding archives!) 

Is Burnham the Jared Kushner of Jones Day? Did his marriage to the daughter of a muckety-muck at the firm pave his career path, setting him up with powerful mentors like White House counsel Don McGahn (and Jones Day alum), flashy assignments, that $810,000 pay day and possible judgeship on the coveted Ninth Circuit (Above the Law's David thinks he's a leading contender)? Who knows?

I mean, it could be a total coincidence that he's the golden boy of the firm. Maybe he does walk on water. 

But let's go back to the big question: What exactly did Burnham do to deserve the $810,000? I'm still unclear. (We've asked for comments from Burnham and Jones Day, but have not heard back.)

And what does David Sanford, Moore's lawyer, think of Burnham's family connections? Do they reaffirm Jones Day's fraternity model? 

Interestingly, Sanford says that he didn't know about Burnham's personal connection at Jones Day until I told him. (You're welcomed, Mr. Sanford.) But Sanford says in an email that he's not surprised, adding, "there is a much bigger story to be told and it will be told."

Well, that sounds a bit ominous.

Anyway, you connect the dots. 

Email me: vchen@alm.com

Follow me on Twitter @lawcareerist

June 25, 2018

It's Official: Reed Smith Has Balls and former Big Law Associate Is Cruella de Trump

Kirstjen-Nielsen-Art

Because you are rushed and have a short attention span—my quick and dirty edition of the news:

The ballsiest award goes to: Reed Smith. I don't know how long it will stick by its guns, but you have to hand it to Reed Smith for openly admitting that it won't be joining the Big Law flock in upping associate salary.

Usually firms duck from the press when it plans not to pay the "going rate." But Reed Smith partner and global head of legal personnel, Casey Ryan, dealt with the issue head-on, issuing a statement that the firm "has no current plans to increase associate starting salaries in any location," reports Legal Week.

The reason for this bold (non)move? Ryan said it was based on “the interests of clients.”

I don't know if this is true but you can't go wrong saying it's for the well-being of the client. It's kind of like saying I did it—lied, stole, cheated, whatever—for the sake of the children. I mean, who's going to argue with those constituencies?

In any case, there are sensible reasons as to why Reed Smith is drawing the line. For one thing, although it is a perfectly good firm, it's not in the same profit league as Milbank Tweed; Cahill, Gordon; Cleary Gottlieb; Davis Polk; Kirkland & Ellis; Paul, Weiss and the other Big Law firms that are raising their beginning salaries to $190,000 or more. 

Reed Smith knows that it won't draw the creme de la creme candidates, so why play that game? In a way, you have to give them credit for knowing who it is.

So many things you can do with a law degree! Look at Kirstjen Nielsen, the head of  Homeland Security and the youngest person (46) to lead the agency. 

A 1999 of the University of Virginia Law School, Nielsen started as a humble associate at Haynes & Booth in Dallas. (One former partner there tells me: "She was always nice and appeared to be a sharp, young lawyer." Boring, right?) Later, she became a staff member at Homeland, before becoming a special assistant to President George W. Bush.

What a quick learner Nielsen must have been to now lead Homeland, a mega agency with a staff of 240,000 and a budget of more than $40 billion. I bet most UVA law grads of her vintage aren't doing anything remotely as impressive!

And now she can add another title to her resume: Cruella de Trump. As the face of Trump's zero-tolerance immigration policy, she's become the leading defender of the practice of separating migrants from their children. (So far, 2,300 kids have been taken from their parents. Though Trump has reversed the policy, it's uncertain when or how those kids will be reunited with their parents.)

At a press conference about the issue just before Trump rescinded the policy, Nielsen suggested that the spotlight on the plight of the children and their families was misplaced. She said: "They reflect the focus of those who post such pictures and narratives. The narratives we don’t see are the narratives of the crime."

Is she suggesting that the children are criminals? Perhaps not the most sensitive interpretation. (Also, tone deaf: Nielsen dining at a Mexican restaurant a day after the press conference. Poor thing: She was met with so many loud boos that she couldn't even finish her Margarita. )

Anyway, if being the poster girl for Trump's draconian border policy is too much for Nielsen, she can always join Fox News's stable of commentators. I mean, gee, she already has the right hair color for the job.

Don't miss this: The secrets of rainmaking revealed! "It's not that the old boys club doesn't exist. It's just not in the same way. You don't have to go to a men's club to play squash to get business." 

Listen to my latest podcast with Roberta (Robbie) Kaplan and Sharon Nelles.  

Email me at vchen@alm.com

Follow me on Twitter @lawcareerist

 

June 18, 2018

Yes, White Men Can Apply Too

1920_University_of_Michigan_swim_team

This might be just a drop in the diversity bucket, but it's an interesting drop.

Boston-based Brown Rudnick just inaugurated a diversity fellowship that gives a first-year law student the opportunity to work at the firm's New York or Boston office as a summer associate (and be paid accordingly), as well as a tidy $22,500 for tuition.

Nice package, but ho-hum, you're saying. Another diversity scholarship/internship. So what's new and different about this one?

The news flash is this: You don't have to be a minority member to apply. The fellowship is open to all 1-Ls who are the first in their family to go to college. So, get on board white folks!

"Diversity scholarships are usually focused on race, and there's been a backlash because they exclude white people," says Ari Joseph, Brown Rudnick's director of equity, inclusion and diversity (query: are corporate titles getting ridiculously long?). Of the seven finalists for the fellowship, two were white, says Joseph. (This year's winner is W. Lydell Benson Jr., a 1-L at George Washington University Law School.)

For Joseph, creating and promoting this fellowship has been personal. A graduate of NYU School of Law, Joseph is a bi-racial, first generation college graduate who was raised by a single mother, along with three younger siblings.

That background was influential in the design of the fellowship. "I thought back to my childhood and my experiences in the corporate world—some were about being black but some were about cultural differences, like how to hold a cocktail glass or how to network," says Joseph. Those skills were foreign to him, he explains: "I grew up in a trailer park, and we had to go to a food bank for food."

Joseph adds that people who are on the low rungs socially and economically "have the hardest time climbing the ladder," citing a 2010 U.K. study. 

So have we reached a point where social/economic factors trump race in the career game? Hardly, says Joseph. "Race is unquestionably still one of the primary factors influencing a person's odds at having a more challenging, or more privileged, life. That said, many of the cultural or social challenges a poor black or Latino kid from the Bronx faces aren't that dissimilar from the challenges a poor kid from rural Texas might face." 

But could there be a blowback from minorities because this scholarship is open to whites too? "It could happen, I suppose," says Joseph. "I decided to err on the side of inclusivity. Pointing out our differences —even if we're trying to make a positive impact by doing so—can have unintended consequences."

He says that opening up the fellowship to all first generation college graduates isn't "diminishing the reality that minorities face very real challenges." The intent, he says, is to address how cultural differences —"whether they're caused by race/ethnicity or socioeconomic status"—create  barriers to mobility.

In the rarefied world of Big Law, blatant racial discrimination has become uncommon, says Joseph. Yet, he adds, privileged professionals "have expectations that people in their social and work circles will think and act in certain ways, and I've seen them write others off when they don't." Members of the lawyer class, he adds, "don't realize how much of a bubble they live and work in."

And will other firms adopt this broader definition of diversity? "I certainly hope some do," says Joseph, adding, "there's no reason we can't add another dimension to what we mean by 'diversity'."

Diversity that includes white men? In the age of Trump, Roseanne and Hillbilly Elegy, maybe this is the start of a necessary conversation.

Email: vchen@alm.com

Twitter: @lawcareerist

 

June 6, 2018

What an Awesome Time to Be in Big Law. Not!

Millenials-1000x300

 

I hate to be a constant killjoy, but it always makes me nervous when there seems be so much happy news out there—particularly for you young legal pups. Here's what I mean:

Milbank sets starting salary at $190K. Yippee! In case you've been under a rock, the big news is that Milbank Tweed Hadley & McCloy recently set the starting salary for first-year associates at $190,000 (with bonus, they'll be pocketing $200,000).

So exciting! And now, everyone is waiting with bated breath to see which firms will follow Milbank's fantastic example. Can you stand the suspense?

Despite speculation that not every firm will follow Milbank (because not every firm is Milbank), let me offer you my guess: Firms that fancy themselves as "major" players will fall into line—which means a lot of firms that can't really afford the hike will follow suit.

And why would they do such a silly thing? Because law partners have delicate egos, want to be considered part of the "club" and lack originality. At the end of the day, firms just blind follow each other.

Kent Zimmermann, a law firm management consultant at the Zeughauser Group, is already sounding the alarm of salary wars gone wild. He tells the New York Law Journal's Christine Simmons that some firms will follow Milbank's lead even if "they are not competing for the same profile of associate." Sooner or later, Zimmerman predicts, the industry will reach a point "when the economy cools and demand drops." And then what? Layoffs! (Remember the recession?)

Recruiter Dan Binstock offers a sobering picture for associates. Already, the current $180,000 salary is making firms more bottom-line oriented, he tells NYLJ: "I’ve literally heard managing partners say since we raised salaries to $180,000, we don’t have the luxury of giving associates six to nine months to catch up on their hours," adding that firms give associates three to six to prove themselves before they're shown the door.

So there you have it: More pressure, more billables and more opportunities to get fired. All before you hit 30. Quick, enjoy that salary hike while you can!

Weil shortens partnership track. Quick, cue the real estate agent!

Speaking of the fast track, Weil Gotshal & Manges just announced that it is shaving two whole years from its partner track. So instead of waiting around for almost a decade, ambitious associates can get the brass ring in seven-and-a-half years. Yes, you can start shopping for that East Hampton weekend home now!

The reason Weil is being so generous is that the firm wants its mid-level associates to stay on rather than jump ship. "The current generation of lawyers doesn’t want to wait nine or nine-and-a-half years,” executive partner Barry Wolf tells the NYLJ, sounding as if the firm has figured out the fickle heart of impatient millennials.

What will it take to be anointed a Weil partner under this fast and furious system? There are no strings attached, Wolf assures the NYLJ. The criteria for elevation is the same, and, like before, new partners will first be income partners before getting equity. And, Wolf insists, this new system is "not designed to weed people out." So chill.

In fact, Wolf says, "We expect substantially all of our associates who are here at seven-and-a-half years will be promoted to one or the other"—meaning partner or counsel.

I'm sorry but all this just sounds too peachy to be true. While Wolf might sincerely believe that "substantially all" seven-and-a-half year associates at the firm will be promoted, you have to wonder what happens if the economy goes south or the firm just decides it is no longer smitten with the crop. My bet is that the firm will cut a lot of them loose or make them income partners in perpetuity.

I think this quickie partnership program is just a temporary bout of generosity, reflecting the hot market we are in at the moment. Ironically, though, Wolf insists that “this is in the long-term best interests of our law firm.”

Whatever.

How dare I suggest quotas! Recently, I floated the idea that maybe firms should consider quotas in allocating client credit if they're serious about promoting gender equality. I expected some blowback. Interestingly, all the negative comments came from women.

I heard from a handful of women who took umbrage at the idea, telling me that they are doing just dandy at client development—thank you very much. The key to success, some said, is to get out of Big Law. One woman wrote to me: "There are a lot of great and successful women lawyers if you look beyond BigLaw." (Uh, not to be a party pooper, but doesn't that suggest that women won't have much luck at getting business in major firms?)

Another female lawyer accused me of fake news on Wwitter account for reporting that male in-house counsel tend not to give women business: "On behalf of my male clients, powerful women in house and women lawyers who yes make rain and get hired I call this ." (Hey, I was just reporting on findings from Acritas about male clients giving more biz to male partners.)

Guess if you don't like someone's opinion/reporting, it's now #fakenews. How Trumpian.

Finally, once more with feeling: "GC Diversity Mandates Had a Soft Launch—Now They're Serious." That was the title of an article in Corporate Counsel about how companies are getting tough (at last!) about diversity.

Yeah, yeah. Haven't we heard this about a thousand times? I'm sure companies really mean business this time; they're going to fire, punish and tar and feather all you firms with bad stats on women and diversity.

And I bet law firms are quaking in their boots.

Email me: vchen@alm.com

Follow me on Twitter @lawcareerist

 

June 4, 2018

Call Me Quota Queen

Terry-&-the-pirates-dragon-lady-radio-marion-sweet-risqué-vintage-30s-photograph_371522324023

Of the myriad articles I’ve written about women in Big Law, this one hit a nerve: Male clients disfavor female partners. In fact, they are one-third less likely than female clients to choose women as lead counsel.

Of course, women always suspected it's a boys club. Yet, seeing cold, hard data support that suspicion tapped a deep-seated fear: No matter how hard they try, women face daunting odds in developing business—and that means women won't catch up with men in pay or power. 

I heard from women all over the country, voicing frustration and anger that male cronyism seems as strong as ever. Some women told me that they've basically given up on trying to develop business from men—either because men were unreceptive or that they read the overture as some kind of sexual invitation. One young female partner at an AmLaw 100 firm said to me: "It's just a waste of time. I guess I'll always be a service partner."

All of this is disheartening because clients were supposed to the saviors. They're supposed to be the enlightened ones who are clamoring for more women and minorities to do their work. 

And, indeed, big companies have made a lot of noise about that mission. In 1999, over 500 companies signed on to the Statement of Principles, pledging to press law firms to promote women and minorities. In 2004, companies signed onto Call to Action, vowing to keep stats on law firms and "take action" if necessary. 

Though launched with great fanfare, these initiatives eventually died quietly on the vine. To put it simply, they were lame.

So what's next? How about something with more teeth? Force firms to tell the truth about compensation. Shame them into it, if necessary. Then hold them accountable until they improve the situation.

Let me get more specific:

First, firms should be totally transparent about their compensation systems and client credit allocation, starting with breakdowns about how men and women are paid (equity and nonequity partners and associates who are paid bonuses). And if some firms refuse to disclose this information or play games about the status of their partners, they should be outed. (I'm looking at you Jones Day and Greenberg Traurig.)

Second, firms should set specific goals as to when they plan to attain that 20, 25, 30 or whatever percent female equity partner mark. Funny how firms will tout all the awesome things they're doing for female lawyers—like throwing swanky networking events or Fed-Exing breast milk for nursing mothers—yet none will commit to a timetable about when they'll reach a critical percentage of female equity partners. After so much talk, you'd think firms would have the guts to take a public stance about specific targets.

Thirdly—brace yourself—we should consider quotas. European countries set quotas for the percentage of women on the boards of their public companies, and, despite initial skepticism, the quota system has worked. So is the idea of quotas in allocating client credit so outlandish? The CEO of Acritas doesn't think so. She proposes that clients "apply quotas in their work allocation—giving at least one in three matters to a female lead partner and demand gender diverse teams."

Will quotas fly in Big Law? Nah. It goes against a myth we hold dear: that law is a meritocracy in which the brightest rise to the top. Though experience tells us otherwise, we cling onto that myth. 

Quotas are so taboo that they're not even discussed. "I am not aware of people pressing for nor firms considering quotas for client credit allocation," says Brande Stellings, a vice president at Catalyst, an organization that promotes women. "Although quotas have been around for over a decade in Europe, the topic has largely been a non-starter in the U.S."

As someone who's cover women in law for over 15 years and seen paltry progress, I think it's time to talk about it—and other measures that involve some strong-arming.

Does all this sound too Draconian? Good, because that's what we need. 

Email me: vchen@alm.com

Follow me on Twitter: @lawcareerist

 

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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