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Aug. 3 — Many lawyers are celebrating the new large law firm pay scale, but the pay raises could have a negative effect on law firms' efforts to attract and retain diverse attorneys.
More than 110 large law firms have raised associate salaries since the beginning of June, with first year associates making $180,000 annually at most of the firms adopting raises.
The impact of the raises on diversity initiatives will be twofold, Pat Gillette, an author and speaker on issues of diversity and gender equality, predicts.
Firms will have a harder time recruiting diverse attorneys and it will be more difficult to keep them from leaving.
Some big law firms have begun recruiting from law schools that have a more diverse student body but are not in the top 10 like Harvard, Stanford and Yale in order to increase diversity, she said.
With the pay raises there's now a “higher risk associated with hiring any associate,” so firms might be asking themselves whether they're “willing to take a chance on someone” not from those top schools, Gillette said.
A related concern for these firms is how they will recoup the money spent on the salary raises, she said.
“There's no free lunch,” Deborah Rhode, a professor at Stanford Law School, told Bloomberg BNA.
Rhode's expertise includes race and ethnicity discrimination and she has written extensively on equality in the legal profession.
Partners don't want to reduce their incomes to make up for the salary raises, she said.
The result is “to put increasing pressure on billable hours,” Rhode said.
Working longer hours, however, means that firms can't provide the support system needed to retain a diverse workforce because the time isn't there, Gillette said.
Women and minorities benefit from processes such as sponsorship, performance reviews and opportunities for visibility from more senior members of the firm, Gillette said.
This career counseling will ultimately benefit women and minorities, who don't traditionally get good feedback, she told Bloomberg BNA in May.
If the processes aren't in place, these attorneys become marginalized, don't thrive and ultimately leave, Gillette said.
“Anything that decreases senior attorneys' willingness to invest time in nurturing that talent is going to make it harder to level that playing field,” Rhode said.
There are several, distinguishable reasons why diverse attorneys ultimately leave firms, Rhode said.
“There's a correlation between women's disproportionate attrition in large firms and increases in billable hours expectations,” Rhode said.
Women attorneys often have to balance family commitments that compete with such long hours, she said.
Diverse men encounter “different barriers to professional success” such as unconscious bias and closed networks, Rhode said.
These barriers can be lowered by sponsorships, which provide networking opportunities within and outside of firms.
If there is less time for attorneys to spend on mentoring male attorneys who belong to underrepresented groups, however, the barriers will persist.
Unconscious biases affect decision-making and behavior without a person's awareness.
For the legal profession, this means that diverse attorneys aren't “getting a seat at the table, aren't being offered the choice assignments, the networking opportunities and the opportunities to obtain critical leadership experience,” American Bar AssociationPresident Paulette Brown said in remarks at the Bloomberg BNA Big Law Business Diversity & Inclusion conference held in New York in May.
The salary increases thus “work at total cross-purposes with the ultimate goal of diversity,” Gillette said.
A former law firm partner told Bloomberg BNA that partners' incentive to train associates would likely survive even if billable hours rose.
“[T]here are many partners at firms who have a little institutional loyalty and do believe in training associates,” Mark Herrmann told Bloomberg BNA in an e-mail.
They'll especially train associates with promise, he said.
Focusing too much on billing can have its own financial costs, Gillette said.
Most associates leave big law firms after three to five years, at exactly the time when they begin to be profitable for the firms, she said.
For associates that leave after three years, the firms lose $500,000 to $600,000 per associate and “they can never recoup that money,” she said.
Most associates do leave firms before the partnership decision, Herrmann agreed.
But Herrmann pointed out that this has been part of the law firm business model.
“Attrition really didn't matter,” because it's most likely factored into a firm's costs, Herrmann said.
Still, Gillette said the value proposition for law firms should be to make an effort to bind new attorneys to the firm.
This would involve hiring fewer new attorneys but taking time to invest in them through training, mentoring and performance evaluation, she said.
“We know that one of the things that contributes to associates' dissatisfaction is lack of professional development and mentoring,” Rhode said.
At first, new attorneys would get paid less because they're working less, but if they stay, then pay them more, Gillette said.
Firms should also credit attorneys who spend time mentoring, which most firms don't do, she said.
“It's a very short-sighted perspective on the part of law firms that want to retain talent and enhance their diversity because they don't give credit for time spent training and mentoring the next generation of lawyers,” Rhode said.
“If you have a tie to a firm other than money, you're more likely to stay,” Gillette said.
Such ties include a work environment with opportunities, exciting and challenging work and ties to colleagues, she said.
Unless firms look to the long term, they're “throwing good money after bad,” she said.
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