Which Types of Partners are Losing Money?

By William Peacock, Esq. on March 18, 2013 | Last updated on March 21, 2019

One might expect that partner compensation would decline in the present economy. After all, the legal industry hasn't exactly been thriving since 2009 or so. Industry-leading firms were shuttered, partners and associates were sent to the soup kitchens, and the legal lifestyle has been more madness than Mad Men.

And yet -- unless you are a woman, black, or a litigator -- your compensation likely went up between 2010 and 2012, according to a survey done by Major, Lindsey & Africa.

Though the economic collapse involved abuses of the banking, housing, and regulatory systems, compensation for partners practicing corporate law rose 11.6 percent, as did compensation (though to varying extents) for every other practice area (IP, Tax & ERISA, Real Estate, Labor & Employment, Other) except Litigation, which dropped about five percent.

What about women? Male partners' compensation rose 8.74 percent while female partners' compensation dropped 3.12 percent, widening the gender pay disparity. In dollar figures, male partners averaged $734,000 in 2012 while female partners averaged $497,000, or 32.29 percent less.

As for race and ethnicity, compensation was consistently up from 2010, except for black partners, whose compensation dropped $61,000. White partners had in increase of $34,000, Hispanic partners saw an increase of $145,000, Asian Pacific respondents gained $198,000 on average, and American Indians saw a massive increase of $435,000. Multiracial partners' compensation rose by $138,000.

Of course, for those of us who love statistics, the first question is always about methodology. This was a self-reporting survey, sent to about 75,000 attorneys across the world via email. Only 2,084 responded, and some of those responses were incomplete. That's approximately a 3.0 percent response rate, once undeliverable email addresses are accounted for. According to the University of Texas, an average response rate for an email survey is 40 percent. Adjust your reactions accordingly.

Though the survey's response rate and sample size weren't exactly stellar, let's assume for a moment that the results reflect reality. How does one respond?

According to Reuters, ABA President Lauren Bellows has pushed for an initiative to promote gender pay equality. The initiative consists of a free online toolkit that is meant to help facilitate discussion amongst local bar groups and firms. A more cynical individual might question whether posting a PowerPoint presentation to the ABA's website is going to actually affect the discriminatory tendencies of octogenarian partners, but alas, there's no harm in trying, right?

It is also interesting that there has been no known discussion of the ethnic and practice area trends.

Of course, you associates might be wondering why you'd even care. After all, only a handful of recent grads are even working in BigLaw. Partner compensation is probably the last thing on your mind. However, if you still have a choice in practice area, it might be worth noting the trends. Also, if you make a lateral move to another firm, partner compensation and the MLA survey are topics that you might consider discussing - in a tactful manner, of course.

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