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Why are women still paid less than men?

By Forrest Briscoe and Andrew von Nordenflycht


The recent firing of Jill Abramson, the first female executive editor of the New York Times, after less than three years on the job focused the news cycle on gender inequity, with discussions of glass cliffs (women get shorter leashes even when they get the top jobs) and reports showing the persistence of glass ceilings and pay disparities (e.g. Abramson was paid less than her male predecessor). In the United States, women now represent a substantial majority of those earning advanced degrees. Yet as we look higher and higher up the ladders of career attainment, we see smaller and smaller percentages of women – as well as the persistence of pay gaps for women, even in senior positions. In other words, even as women break through one glass ceiling, they encounter another on the next rung.

Take law firms. Women make up almost half of US law school graduates (up from 5% in 1950). But they represent only 20% of US law firm partners and an even smaller share (16%) of the more elite class of equity partners. And the higher one looks within the partnership stratosphere, the less diverse it gets. Furthermore, the leaders of the profession, as well as clients of law firms, express frustration with the slow pace of progress in generating more gender and ethnic equality at the top of the profession. These efforts can be aided by improving our understanding of the work and career processes within law firms and, by extension, partnerships in other professional fields, such as accounting, consulting, and investment banking.

So how exactly do partners rise to different levels within the partnership hierarchy, and how do those processes challenge female partners? To date, researchers have analyzed the challenge of becoming a partner, but we know curiously little about how professional careers unfold after that. Although partners at large law firms may all be one-percenters, they are certainly not equal, with distinctions made between equity and non-equity partners, and recent surveys showing some “super-partners” earn up to 25 times more than their peers.

To get at these questions, we studied how partners gain power within a partnership, as measured by their “book of business” – the fees paid to the firm by clients with whom the partner holds the primary relationship. The more client revenue that a partner is responsible for, the more that partner will hold influence in their firm, command respect, and generate career mobility options in the wider profession. To understand power in a partnership, then, is to understand how partners come to obtain books of business.

What we found was intriguing. In short, although women may be disadvantaged in a primary “path to power” in the partnership, they may have opportunities along a second pathway of growing importance.

The primary pathway involves “inheriting” clients from an established power partner. To build a book of business, one needs to either pursue that strategy, or the alternative of “making rain” by bringing new clients to the firm. A newly minted partner thus needs to decide which path to invest in—or how much to invest in each path. Do you spend time working for clients of power partners nearing retirement—or pounding the pavement (or the cocktail circuit) seeking new clients of your own? Of course, each path has its risks. Investing in the inheritance path can backfire, for example, if a retiring benefactor bequeaths a client to a rival partner. And the rainmaking strategy can backfire if nibbles of new-client business don’t eventually turn into a large revenue stream for the firm. Since both investments require time and energy, what’s the optimal career strategy?

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Deepening the puzzle, both paths are also likely to pose particular challenges to female attorneys, as they depend on forming social relationships with either the senior power partners or with decision makers at potential new client firms. Much research shows the existence of “homophily” in interpersonal relationships, or the tendency for people to be drawn to and feel greater affinity for people who are like themselves in terms of race and gender. So where senior partners and/or client decision makers are largely male, female junior partners may be at a disadvantage in forming the bonds of affinity or trust that help win the client business.

Analysis of the internal records of law firms shows, unsurprisingly, that female partners have smaller books of business than their male peers. More interestingly, though, we are finding that the rate of return on investments in the two paths to power differs between men and women. In fact, the inheritance strategy appears to be a particularly poor investment for women. For women, larger investments in the inheritance path are associated with lower future books of business. Why? We speculate this could be because of “selective affinity.” That is, when it comes time for the power partners to pass on their clients, they may unconsciously favor partners who are more demographically similar to them.

Yet, when it comes to the rainmaking strategy, the opposite may be true. For female partners, investments in the rainmaking path appear to pay handsomely. In fact even better than for male partners. Why could that be? Perhaps female partners recruit new clients in different ways than male partners, or perhaps “selective affinity” can actually favor female partners in the open marketplace (rather than the closed ecosystem of the firm’s internal networks).

What does it all mean? First off, for partnerships, there may be considerable value in studying the inheritance and rainmaking processes going on in their own organizations. Virtually all firms now have the relevant internal data waiting to be analyzed. Second, our findings are important for managing diversity in partnerships. For example, the results suggest there could be a “double payoff” to supporting rainmaking efforts for newly-made female partners – double in the sense of the firm’s overall revenue generation as well as diversity goals.

Forrest Briscoe is an Associate Professor of Management in the Smeal College of Business, Pennsylvania State University. His research focuses on careers, networks, and management processes in professional organizations, as well as on the factors that promote and inhibit changes within organizational fields. Andrew von Nordenflycht is an Associate Professor at Simon Fraser University’s Beedie School of Business. His research focuses on the challenges of managing professional services firms, the patterns of professional careers, and the impact of different organizational forms on the performance, creativity, and ethics of professionals. Andrew is the author of the paper ‘Does the emergence of publicly traded professional service firms undermine the theory of the professional partnership? A cross-industry historical analysis’ published in the Journal of Professions and Organization.

The Journal of Professions and Organization (JPO) aims to be the premier outlet for research on organizational issues concerning professionals, including their work, management and their broader social and economic role.
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