Firms Should Plan For More Discrimination, Harassment Charges

Law firms should anticipate facing more charges of gender-based discrimination and sexual harassment in the near future, an author of a multi-year study on employment practices liability claims against law firms told Bloomberg Law.

Though there haven’t traditionally been as many of these lawsuits, they’ve cost firms a lot of money to resolve relative to their frequency, Matthew K. Corbin said. Corbin is Senior Vice President and Executive Director for Aon Risk Solutions in Overland Park, Kansas. Aon provides risk management and brokerage services for law firms, including employment practices liability insurance.

Aon released a report in August on 765 claims submitted by law firms to insurers between 2005 and 2017, breaking down the claims into categories based on frequency and severity of the charges.

The data for 2017, when the #metoo movement gained momentum, is still incomplete. But based on Corbin’s conversations with industry professionals, the data will likely show an increase in gender discrimination, sexual orientation discrimination, and sexual harassment claims, he said.

Discrimination Claims Dominate

More than half of the employment practices liability claims involved discrimination. The “big four” in this category are disability, gender, age, and race discrimination, Corbin said.

Law firm staff comprised more than 60 percent of claimants, and women filed more than 70 percent of claims, the report says.

Furthermore, more than 75 percent of the alleged transgressors were attorneys and of those, 95 percent were equity partners or shareholders.

Law firms are vulnerable to these claims because of several factors including the environment of one-on-one interactions, the long hours, frequent travel, and the power disparity between partners and associates or support staff, Corbin said.

Hush Up

Many of the claims aren’t heavily litigated.

Of the 765 claims filed between 2005 and 2017, just 142 were litigated, according to the report.

And the claims take about 12–13 months to get resolved, from the claimant’s notification to settlement or payment, Corbin said.

In contrast, lawyers’ professional liability claims take on average five to seven years to get resolved, he said.

This disparity is likely because firms want to avoid protracted ligation of EPL claims due to the potential media attention surrounding them, Corbin said.

They can “read like gossip novels” and tend to air firms’ “dirty laundry,” he said.

Advice for Firms

If EPL isn’t on the forefront of a firm’s radar at this point with the #metoo movement, the study shows that “it should be,” Corbin said.

To minimize exposure to these claims, law firms should revise their employment policies, making sure they prohibit all forms of discrimination and harassment, he said.

They should train employees on the policies, be consistent and transparent in evaluating employees, and compensate men and women on an equal basis, Corbin said.

To contact the reporter on this story: Melissa Heelan Stanzione in Washington at mstanzione@bloomberglaw.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com