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Female In-House Counsel Can Wield Economic Power To Level Playing Field In Hiring Outside Lawyers

For centuries, the legal profession remained essentially closed to women. Then, a few pioneers began to break down the barriers, paving the way for the influx of women into the profession during the last three decades of the 20th century.

Since the 1970s, when the last of the sex-based restrictions in law schools were eliminated, the gender boom has been in full force. Today, women comprise half of the nation’s law school students and approximately a third of all lawyers.1

But these entry-level numbers tell only a small part of the story. Much of the story is about their struggle to break down the barriers women faced as they moved into the profession. Although the final chapter has not yet been written, it is becoming clearer that women in-house counsel can have a major role in determining whether there can be a happy ending.

With the increased numbers of women graduating and moving into private practice, it seemed logical to assume that the female associates of the 1980s and 1990s would experience career advancement commensurate with their demographics. Accordingly, by the beginning of the new millennium, we should have seen a dramatic change in the composition of law firms’ partnerships.

But something has happened on the way to the brass ring. Today, women comprise less than 15 percent of the law firms’ partners. The stark fact is that, even with all the gains achieved by women in the profession, the chance of a male becoming a partner in a law firm is two to three times higher than that of a woman.2

So instead of women moving up in law firms, they began exiting them.3 There are many reasons offered as the basis for this exodus. For example, the excessive requirements for billable hours combined with a frequent resistance to the successful implementation of a reduced-hours or flexible-schedule policy significantly impacts working mothers. In a confidential interview, one associate who left a prestigious Boston law firm for an in-house position said: “If you go part-time, it’s a death knell.”

Client Development Opportunities Lacking

The significant work/family issues and the tyrannical impact of today’s billable hour requirements are only a part of the story, however. A key reason why women have not reached partnership levels in sufficient numbers is the fact that they have lacked access to important informal networks within law firms which provide the necessary mentoring, client exposure and client development opportunities critical to achieving partnership.

In fact, an ABA Journal poll reported that women today believe they have even fewer opportunities for direct client contact then they did 20 years ago.4

Yet without focused support within the firm for sufficient mentoring and client opportunities, and with little time to pursue non-billable activities, women have difficulty meeting the ever-elusive qualification of “rainmaker,” contributing to the high rate of attrition.

When women attorneys are asked why they left private practice, many respond with a common theme. As associates, they were told to focus on their billable hour output as the critical measure by which they would be judged for partnership. They responded as advised, with a crushing focus on billable hours, which left little time to pay attention to client generation.

But the rules changed as they inched closer to partnership eligibility. The billable hour standards that often required 70-plus hour workweeks were not enough. A sufficient client base would also be needed for partnership eligibility.

The conflict this caused was best summarized in a confidential interview by a senior associate at a Boston law firm, when told she would not be considered for partnership the year she expected to be nominated: “And so a push that was never made part of the job description now became: ‘Well, of course you can’t become a partner, you haven’t brought any work in.’”

Unable – and in many cases, unwilling – to reconcile the mixed messages and to remain in seemingly untenable working conditions, women have been voting with their feet, typically to positions which will provide them with increased flexibility, according to the ABA. Studies verify that women are leaving private practice in order to gain a little more control over their lives. And with their departure from law firms, the percentage of women in corporate counsel positions has grown dramatically since the mid-1990s.

Approximately 11 percent of female lawyers, according to the ABA, now work in corporate legal departments. Moreover, there is also a significant trend in women achieving general counsel positions. Although women have a long way to go before they gain full leadership parity in-house, the numbers of women general counsel in Fortune 500 companies doubled between 1996 and 1999, and continues to increase.

Significant Economic Clout

So something interesting is happening to women on the way out the doors of private practices. They are not leaving the law – they are simply leaving law firms. In growing numbers, women are resigning as outside counsel to become the in-house client, a position that offers significant economic clout.

With this change, women in-house counsel have a remarkable opportunity to use their purchasing power to change the face of the private law firms they are leaving behind. By ensuring that other women lawyers are included in the competition for their business, they offer their colleagues critical client generation opportunities.

Each time an in-house client hires a women attorney as outside counsel, she is helping that lawyer along the road to achieving partnership, thereby helping to eliminate the barriers that women have faced for decades and gaining a very loyal attorney in response.

In-house lawyers have much to consider when hiring outside counsel. Their company – that is, their own client – is relying on the in-house lawyer’s judgment, expertise, and legal relationships to select an attorney in private practice who can achieve a great result as economically as possible. There is little room for error.

The path of least resistance, therefore, is to turn immediately to the “name” firm or the “go-to” lawyer for outside help. Frequently, however, this will narrow the selection to male senior partners who have had ample opportunities to develop a reputation in a particular area. One woman general counsel in a confidential interview stated it succinctly: “When I choose a law firm or a lawyer my board has never heard of, the results had better be great or I am the one that bears the consequences.”

But due diligence can offer tremendous opportunities for expanding the list of those who may be considered the “go-to” lawyer. For example, in-house counsel can develop a simple tracking system to identify attorneys involved in trial court opinions issued in the areas of expertise for which outside counsel is frequently sought.

Various tracking services and online court decisions allow easy access to this information. Keeping a database of such details as the names of the lawyers, the subject matter of the case, and the prevailing party can later be the basis for compelling statistics that will greatly expand the pool of “go-to” lawyers.

Some in-house counsel express concern about using anyone but the known name for the “bet-the-company” types of cases. But statistics show that, in a typical year, less than 5 percent of the legal market is truly focused on “bet-the-company” cases.5

Moreover, there are many ways to expand the pool of those experienced practitioners capable of even the most critical matters. For example, the decisions of a state’s highest court or federal court of appeals provide a fruitful source of referrals.6 Attorneys with demonstrated success before these courts are highly likely to be choices that even the most difficult board of directors could approve.

And while it is common to ask fellow in-house counsel for suggestions, that process itself can be flawed if there is no system behind it. For example, do the other lawyers consulted have their own system for developing a more diverse pool of talent? Is the inquiry casual, or does in-house counsel consult at least three to five other colleagues for suggestions and know the criteria on which the recommendations are based? Referrals should be sought in a systematic way to ensure they are a bountiful source of new information, and not simply a perpetuation of the same names.

With clear systems in place to identify, hire and evaluate outside law firms, in-house counsel can make tremendous strides in diversifying their selection of attorneys. As a former president of the American Bar Association, Robert MacCrate, has stated: “the quest for gender equality must become a central objective of the legal profession.”

Women in-house counsel can use their economic power to level the playing field. And in doing so, women attorneys can join together in shattering the last vestiges of the glass ceiling.

FOOTNOTES:

1 Debra Baker, Plague in the Profession, ABA Journal (September 2000) at 41.

2 The Unfinished Agenda Women and the Legal Profession, ABA Commission on Women in the Profession, Deborah L. Rhode, Chair, (2001) at 8.

3 See, e.g., Keeping the Keepers II: Mobility and Management of Associates, the NALP Foundation (2003), at 21, noting that female and minority associates departed their law firm employers with greater frequency than males and non-minorities at every benchmark.

4 Hope Viner Sanborn, Higher Hurdles for Women, ABA Journal (September 2000) at 31.

5 Statistics presented by Susan R. Lambreth at a September 2002, program sponsored by the Hildebrant Institute. Within the 5 percent, Ms. Lambreth includes the following categories of cases: major IP litigation, catastrophic litigation and major bankruptcies.

6 For example, Massachusetts Lawyers Weekly annually summarizes all decisions issued by the Commonwealth’s Supreme Judicial Court. This compilation summarizes the decision, sorted by subject matter, and includes the names of the attorneys involved.

Lauren Stiller Rikleen is a senior partner at the Worcester, Mass. law firm of Bowditch & Dewey LLP, and is writing a book about women in the legal profession. This article is part of a lengthier exploration of the challenges impeding women’s success in law firms, and ways these challenges can be overcome. She can be reached at lrikleen@bowditch.com.

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