Compensation

EXECUTIVE SUMMARY
Compensation in Law Firms: Why Women Equity Partners Are
Compensated Less for the Same Billable Hours and Business Origination as
Male Equity Partners
Harry Keshet, PhD. & Angela A. Meyer, PhD., PE
This study examines how gender effects compensation and the nature of compensation decision, the level
of satisfaction with compensation systems, the gender bias in compensation. Since compensation is
highly correlated with business origination, we also examine the differences in the way gender, race and
ethnicity influences how business development resources are distributed.
Our finding show that compensation is gender based with male equity partners receiving more
compensation than women equity partners do. This fact is true when women and male equity partners bill
the same number of hours, generate the same levels of origination, have the same level of law firm tenure
and work in the same size of law firms. The level of compensation differences increase with the more
women increase their billable hours and origination, the higher tenure and work in larger law firms.
Statistical Factors
Since our survey was launched in 2010, the total number of respondents includes:
By Gender:
• 915 Male Respondents
• 814 Female Respondents
By Ethnicity
• 1269 White Respondents
• 420 Non-white Respondents 1
By Position 2 :
• 865 Equity Partners
• 342 Non-Equity Partners
• 463 Associates
For the purposes of this report, the data was aggregately grouped into four focused variables:
1 The category “Non-white” was compiled from the following racial/ethnic choices: Asian/Asian American
(including South Asian), Black/African American (including Caribbean), Hispanic/Latino, Arab/Arab American,
Native American/Alaskan Native, Pacific Islander, and Bi-racial/Multi T racial.”
2 Respondents indicating they were “Other” or “Solo Practice” were excluded from analysis.
2

Findings & Analysis
1. Overall, male equity partners (MEPs) are more highly compensated than female equity
partners (FEPs), with MEPs reporting mean compensation $166,932 higher than FEPs.
The difference in mean compensation is statistically significant. 3
2. For equity partners, billable hours and compensation were weakly correlated. 4
*MEPs received higher mean compensation for the same billable hours compared with
FEPs.
*Among EPs who bill less than 1800 billable hours, MEPs report mean compensation
$159,876 higher than FEPs, a statistically significant difference. 5
*Among EPs who bill 1800 or more billable hours, MEPs report mean compensation
$249,564 higher than FEPs. This difference is not statistically significant.
3. Origination and compensation are strongly correlated 6 for equity partners.
*Increases in origination yields increases in compensation that is significant and strongly
correlated to EPs.
*The more equity partners originate, the higher the compensation they received. MEPs
receive higher compensation at each level of origination than FEPs with the same level of
origination.
*At the $2 million or more level of origination, MEPs mean compensation was $77,143
more than the mean compensation for FEPs.
4. Not surprisingly, increased tenure within the firm correlates with increased compensation
for EPs. 7
*The longer EPs remain in their firms, the higher their compensation.
*MEPs receive higher compensation than FEPs in each tenure group.
3 t(432.2) = 2.809, p< .05.
4 r(415) = .216, p < .001).
5 t(422.6) = 4.12, p

*The difference in compensation between MEPs and FEPs increases with the length of
firm tenure. At the highest tenure level, 21 or more years, the difference in mean
compensation between MEPs and FEPs is $160,760.
5. Employment in larger firms moderately correlates with increased compensation for EPs. 8
*MEPs report higher compensation than FEPs in each firm size group.
*The differences between gender groups are significant for smaller firms 9 and approach
significance for larger firms. 10
6. White male equity partners (WMEPs) reported higher mean compensation than white
female equity partners (WFEPs) do.
*White male equity partners receive a mean compensation of $658,140 compared to the
mean of $521,900 for white female equity partners.
* Non-white male equity partners (NWEPs) reported mean compensation earned
$643,108 compared to $407,620 mean compensation for non-white female equity
partners (NFEPs).
*Comparing mean compensation levels, non-white female equity partners (NWFEPs)
earned $235,488 less than non-white equity male partners, (NWMEPs) $250,530 less than
for white male equity partners (WMEPs), and $114,290 less than white female equity
partners (WFEPs) did.
7. For those billing less than 1,800 hours, WMEPs report the highest mean compensation,
significantly higher than WFEPs and NFEPs. 11
*In either billing group, NFEPs receive the lowest mean compensation of any
gender/racial/ ethnic subgroup.
*White and non-white MEPs receive higher compensation at the highest billing group
compared with white and non-white females.
8 r(435) = .322, p < .001).
9 For firm size 1–30 lawyers, t(47.8) = 3.24, p

Compensation, Gender and Race/Ethnicity and Origination
White male and non-white male equity partners receive higher compensation than white female
and non-white female equity partners at nearly every origination level do. Non-white female
equity partners (NWFEPs) receive the least compensation at each level of origination. White
female equity partners (WFEPs) receive the highest compensation in only two of sixteen
comparisons in the different levels of origination.
Compensation, Gender and Race/Ethnicity and Tenure
White male equity partners comprised nearly two-thirds (66.1%) of the partners 21 years or
more, while white female equity partners comprised one-fourth (25.2%) of the same group. Nonwhite
males (6.8%) and non-white females (1.9%) together represented less than one-tenth of
partners with tenures of 21 years or more.
These findings reflect the continual difficulty of non-white women attorneys to become partners
and to advance in partner tenure. It also may reflect the past 20 years or more in which nonwhite
females had difficulty in becoming partners at law firms.
The findings show increasing racial/ethnic and gender diversity over time.
Of equity partners ten years or less, white females are the largest subgroup (39.7%), followed by
white males (30.8%), non-white females (17.9%), and nonwhite males (11.5%).
The differences in mean compensation between gender/race/ethnic subgroups did not vary
significantly within each level of partnership.
Table 10:
Compensation, Gender, Race/Ethnic by Firm Size
In smaller firms, there are significant differences in mean compensation between gender groups 12
and racial/ethnic groups. Males report higher compensation than females regardless of firm size.
White equity partners report higher compensation than non-white/ethnic partners do for all firm
sizes except for firms with more than 1,000 lawyers. 13 There are significant differences between
gender/ethnic groups for smaller firms, and approaching significance for larger firms.
11 An analysis of variance (ANOVA) on compensation demonstrated significant variation between the subgroups, F
(3, 373) = 5.09, p < .005. A post hoc Tukey test indicated that WMEP mean compensation differed significantly
from WFEP (p

Conclusions
Institutionalized discrimination appears to be a major factor in the explaining the differences in
compensation between male and female equity partners and differences between white and nonwhite/ethnic
equity partners
The structures likely to be supporting institutionalized discrimination are:
1. Compensation committees are highly segregated by gender, race and ethnicity. A large
majority of compensation committee members are white males.
2. Subjective compensation decision making likely are likely to be based on gender, social
class, race, and ethnic bias and stereotyping.
3. Differential application of compensation is likely in decision-making criteria regarding
women and minority equity partners. Orientation credit decisions made by firm partners
are likely subject to biases against women and minorities.
4. Limited distribution of firm based business development resources and the use of “a selfgenerated
business development activity” correlate with origination for women equity
partners.
5. Women report high dissatisfaction and interpersonal conflicts concerning compensation
and origination credits.
6. Social bias may also play a role in compensation decisions.
7. Possible exclusion of female equity partners from senior male partner sponsorship limits
their compensation.
6