Law Firms Take Heat For 'Juicing' Partner Stats
Michele Dauber is quoted in Law 360 on law firms' unwillingness to release details about partnership structures. Shannon Henson filed this story:
Law firms are under attack for concealing the breakdown of equity and nonequity partners in their ranks, with at least one lawyer accusing firms of keeping clients in the dark to justify hefty billing rates and make good on calls for diversity.
After a number of law firms refused to provide the information, the National Association for Law Placement Inc. recently backed away from a plan to distinguish between nonequity and equity partnership in its annual Directory of Legal Employers.
The firms had cited privacy concerns, saying they were worried nonequity partners could feel marginalized if exposed as the poor cousins of equity partners. But the move by NALP brought on a storm of criticism from a group of women lawyers who have long fought for acknowledgment of nonequity partner status in the statistics reported by firms.
Michele Dauber, a professor at Stanford Law School and a board member of Building a Better Legal Profession, argues law firms are unwilling to release equity and nonequity figures separately for fear clients will object to paying the same rates for the work of a partner revealed to have no real clout.
“Ambiguity about who is an equity partner is important if you want to justify your billing rates,” Dauber said.
Firms may also worry that clients will look elsewhere for representation if they learn that their contacts are nonequity partners with no power, Dauber said. A client, she said, wants to feel confident of retaining counsel if the firm has a conflict, and wants to know that the partner in charge of their account is a true leader within the firm.
“Clients want an owner managing their relationship,” Dauber said.
Dauber, for one, maintains that some law firms “juice” the statistics depending on whether the survey is studying profits per partner — when fewer equity partners is preferable — or diversity — when it benefits the firms to report more women and minority partners.
“It's so widespread that I have to believe it's a business practice,” Dauber said of the statistic manipulation.
Dauber, whose group tracks law firm statistics at www.betterlegalprofession.org, said the single-tier firms are being “unfairly portrayed as worse sweatshops for women than they are.”
“It's really important to have a powerful mentor,” Dauber said. Women and minorities may not know they are under the wing of a nonequity partner and may incorrectly assume their mentor is in a position to help them advance their career.
“The bottom line is that these firms are falsely advertising the chances of advancement to prospective recruits, and persuading them to accept offers on false pretenses,” Dauber said.