Gender diversity, succession planning and connecting some (important) dots
Two of the biggest “hot button” issues for law firms in New Zealand today are gender diversity and succession planning. What is the connection between the two?
Gender diversity is an issue because, although about 70% of law graduates are now women, many leave the practice early, so women are often under-represented as equity partners at senior levels in law firms. Succession planning is an issue because ageing baby boomer lawyers, the majority of whom are men, are wanting to retire and don’t have anyone to take over/purchase their practices.
This creates an interesting dilemma: a large number of women are entering law but not becoming equity partners and a lot of older men are retiring wanting to sell their equity interests in their practice. What can be done to align these trends better and eliminate the dual problems of gender diversity and succession planning? Let’s take a closer and informed look at both.
Two law firms and two sets of issues
Law Firm A is a fictitious mid-sized general practice firm located in a regional centre and has 12 lawyers, six of whom are partners. Of the partners, five are male equity partners, all of whom are in their 50s and 60s and one is a female salary partner in her 30s. Three of the solicitors are men with five or more years of experience and the others are women with grad level to five years of experience.
The firm has a firm administrator and a managing partner and has been in existence for about 50 years. It is a regional leader in its market area with a strong reputation and client base. For three years the firm has had difficulty attracting solicitors because many young lawyers want to be in an urban setting, and with retaining female solicitors.
Law Firm B is fictitious larger firm located in an urban centre and has 175 lawyers, 30 of whom are partners (15 of whom are aged 50 or over). All of the partners are equity partners, but have differing percentage interests. The solicitors range from grads to senior associates. Of the partners, five are women, all of whom have relatively small equity interests. About 50-60% of the solicitors overall are women, although in the grad to year four level, approximately 75% are women, whereas amongst the senior solicitors and senior associates, about 75% are men.
The firm hires new grads each year, most of whom are women. About 80% of the grads leave the firm within three years and the firm has a chronic shortage of lawyers with three to eight years of experience. The firm has been in existence for 75 years and does commercial and litigation work, much of it for large institutional clients.
Law Firm B recently has had some difficulty attracting and retaining female owned/managed commercial clients because the firm lacked experienced female partners to interface with such clients.
Law Firms A and B both have “parallel” issues of retaining high potential female lawyers and cultivating more senior lawyers to take over the practices of older partners who want to retire in the foreseeable future. The result is shortened careers for women and abandoned practices (or firms) for retiring partners. Although these firms are fictitious, the scenarios are real and playing out all over New Zealand.
What the research suggests about achieving gender diversity
Part of the solution to the “slippage” is to increase the number of highly qualified women who become the next generation of senior lawyers and partners. Clearly, men equally need to be part of the next generation and continue to do so on a regular basis. The problem is that women are over-represented at junior levels and under-represented at senior levels.
To learn about gender diversity best practices, I contacted Kristen Liesch, a management consultant based in Calgary, Canada and New Zealand. Her expertise is in applying systematic, research-based interventions designed to optimise talent management and increase diversity.
I asked Dr Liesch:
Q: How can a law firm retain female lawyers so they successfully move through to partnership?
“Partners first need to understand that the organisational and procedural framework that persists today emerged in a historical context when all lawyers were men. Today, women and men are looking for greater work-life balance, for job satisfaction, for more time to spend with their families and in pursuit of personal interests. Retaining qualified lawyers takes more than the half-hearted institution of flexible work schemes or extended parental leave.
It’s baffling to think that firms continue to waste time and money on interventions that make absolutely no difference.
Moving the needle requires a multi-pronged, data-driven approach governed by the following principles:
- Do not waste time and money on interventions that seem like the right thing to do but are not evidence-based.
- Do target your interventions at critical points in the career trajectory.
- Do use cost-effective interventions proven to get the desired outcome.
Don’t do diversity training (alone)
There is no empirical evidence to prove the efficacy of diversity training. It eats into billable hours, and in some cases it is proven to make the situation worse. Combined with systematic structural design changes, diversity training can support inclusion initiatives, but on its own, it’s a waste of time.
Don’t turn to flexi-work; it won’t solve the problem
A flexible work hours scheme has proven to be an effective retention strategy in other sectors, but it is not a silver bullet in the legal field. In fact, there is no statistically significant relationship between the introduction of flexible hours and reduced attrition.
Tackle the billable-hour model
Firms that adopt values-based billing (VBB) systems, or remuneration that correlates with quality – not quantity – of work, will likely be the first to see significantly greater retention. (Contrary to a common misconception, when people quit their job, remuneration sits at No.10 on their list of reasons for doing so.) Smaller firms are at an advantage when it comes to making this sort of structural change, with fewer stakeholders to get on board, and a less complicated infrastructure to modify.
Treat women like the asset they are
Stop perceiving your female lawyers as an eventual liability and start investing in them today. Yes, a younger lawyer may get pregnant and take parental leave. Firms cannot and, for the most part, do not discriminate against female lawyers for this reason when it comes to hiring. Nevertheless, studies show this perception, in addition to general implicit biases, affects a female lawyer’s experience at a firm: she is more likely to be given fewer professional development opportunities, assigned less valuable files, and excluded from opportunities to work with senior lawyers.
Firms that discriminate against their female lawyers – deliberately or otherwise – are shooting themselves in the foot, because the research shows:
- Mothers are actually more ambitious than their childless colleagues,
- Women with kids are more productive than childless women, and they get more productive the more kids they have,
- Women who take parental leave and then return to a firm are 45% less likely to quit than their peers.
Get serious about professional development
Regardless of their gender, a solicitor is 146% less likely to leave your firm if they are offered opportunities for professional development which include: opportunities to work with senior solicitors, the chance to tackle challenging files, mentorship or sponsorship by a firm leader.”
Q: What, if any traps for the unwary are there in this process?
“Never assume that any single intervention is going to create the desired outcome. Instead, consider each intervention as a nudge in the right direction. This is where data comes in handy. Get a grip on your baseline situation by collecting information about current demographics within the firm, then take stock at set periods following the implementation of interventions to measure results. Are your interventions moving the needle?”
Q: What would success look like? In other words, what is optimal gender diversity?
“Some firms are pleased when their female representation at partner level reaches 20-30% (the average in large law firms is 20%). However, in order to capitalise on the diversity of thinking that women bring to the workplace, female representation needs to exceed the 33% “critical mass” threshold. Any less than that and, not only is the advantage female partners bring to the table greatly reduced, a phenomenon called “stereotype threat” can sabotage efforts at increasing female representation by creating an environment of scarcity – instead of enlarging the pie, it becomes a zero-sum game where women (subconsciously) feel the need to compete instead of collaborate. While firms need not aim for 100% female representation, any organisation should aspire to proportionally represent the demographics of its local community. So, make that 50%.”
Q: What is the single most important change a law firm can make to achieve sustained gender diversity?
“There isn’t one. The challenge of gender parity is an onion with many layers. Peeling that onion requires careful planning and expertise. A growing number of international firms have caught on and are shifting their focus to evidence-based solutions and increasing the diversity that populates their partnership pathways and fuels their success.”
Q: What is optimal succession planning for retiring partners?
“Let’s connect the gender diversity dots with the succession planning dots. Assuming a law firm is successful in achieving optimal gender diversity, the partners in the firm must also proactively tackle succession planning for their respective practices.”
This takes years to do correctly in many cases. Partners need to identify appropriate “heirs apparent”, invest time and resources in training those people, segue their client base to these younger lawyers and so forth. This is true whether the next generation solicitors are male or female. For a more complete discussion of succession planning for lawyers, please see my article, “Succession Planning – Is Your Law Firm Getting it Right?” (Emily Morrow, LawTalk, 9 September 2016).
To thrive long term, law firms will consistently need to achieve both gender diversity and successful succession planning. It’s no longer possible to bifurcate these issues. It’s just that simple (and that complicated).
Achieving optimal gender diversity, of course, does not ensure succession planning will occur within a firm. However, to some extent, finding the right lawyer(s) to take over a retiring partner’s practice is a numbers game; the more candidates you have, the more likely you are to find the right ones. And that’s where gender diversity (and, in fact, diversity of all types) comes in; it expands and enriches the candidate pool.
The solutions: research-based plans for Law Firms A and B
Dr Liesch and I designed plans for Law Firms A and B as follows:
Recommendations for both firms:
- Take stock. Collect firm demographic data.
- Tackle the root. Introduce recruitment practices designed to mitigate implicit bias in order to select from 100% talent pool.
- Target problem areas. Begin to phase out/modify procedures undermining the advancement of female solicitors.
- Cultivate a “family friendly” image. Modify website copy and imagery, introduce family-oriented social events.
- Monitor partnership offerings. When considering partnership invitations, evaluate candidates horizontally according to pre-determined, qualitative and quantitative criteria, and assign a devil’s advocate.
- Guarantee pay transparency. Prevent gender-based pay discrimination by lifting the veil on pay.
Recommendations for Law Firm A:
- Benefit from “big smoke” losses. Market the advantage of regional living, target big-firm leavers or female solicitors who have not been practicing for 2-5 years.
- Transition to VBB (value-based billing). Take advantage of modified pricing models to better allocate risks, align incentives and promote work-life balance where quality of work is rewarded over quantity.
- Perform one-on-one check-ins with at-risk staff. Engage a professional to discuss job-satisfaction with all junior staff to identify factors contributing to voluntary attrition.
- Implement a mentorship programme including file assignment rotation. Assign solicitors to partner files on a rotating basis. See, for example, my article, “Mentoring- What It Is And Why It Matters”, Emily Morrow, LawNews, 1 September 2017.
- Use a legal “on call” strategy. Respond to demanding legal throughput by adopting the medical model and rotating staff through an “on call” protocol. See, for example, my article, “Gender, Lawyers and Legal Throughput”, Emily Morrow, LawNews, 30 May 2014.
Recommendations for Law Firm B:
- Institute a “returners” policy. Make it easy for parents of young children to return to the firm after leave.
- Systematise professional development. Create a sponsorship and/or mentorship programme, rotate solicitor assignments, implement accountability measures to ensure unbiased file assignments.
- Target female lawyers at risk of leaving. Collect and assess data regarding job satisfaction at the 3-year mark, and conduct professional development including tailored, intensive coaching.
- Trial VBB. Plan and roll out VBB pilot project with select clients.
- Clarify the Pathway to Partnership. Make advancement policies transparent, discuss individual solicitor’s progress toward partnership during performance reviews, ensure the pathway does not reflect bias.
Many New Zealand firms are successfully connecting the dots and achieving both gender diversity and succession planning. I know, I’ve worked with many of them. Your firm can do this too. The choice is pretty clear; sort this out and thrive professionally and financially over time or not. What’s your choice?
Emily Morrow firstname.lastname@example.org was a lawyer and senior partner with a large firm in the United States. She now resides in Auckland and provides consulting services for lawyers, focusing on non-technical skills that correlate with professional success.
Kristen Liesch is a talent management consultant with practices in Calgary and New Zealand. She specialises in helping organisations achieve – and leverage – greater diversity by implementing research-based design solutions.
Last updated on the 6th October 2017