How America’s Top Law Firms Get Away With Paying Women Less

By Paul Barrett, Bloomberg Businessweek

In January 2014, the law firm Chadbourne & Parke hired Kerrie Campbell to work in its Washington office.

After 27 years in the business, she’d finally reached the pinnacle of private law practice: partnership at a top-tier firm—a century-old stalwart of the elite New York bar. In a press release, Chadbourne said, “We are thrilled to welcome her.”

After two years, the thrill was gone. Chadbourne’s managing partner, Andrew Giaccia, and Abbe Lowell, its head of litigation, appeared together at Campbell’s office. Her time at the firm had been rocky. Still, she says she was shocked by what they had to say. The firm’s five-member, all-male management committee had decided that she didn’t “fit” at Chadbourne. She wasn’t being fired, exactly, but she ought to find a new job, they told her. To “incentivize” a swift departure, her compensation would be cut about 60 percent, to $9,000 a month, less than that of a first-year associate right out of law school. Giaccia and Lowell suggested that, to preserve her reputation, she leave quietly.

It felt like “someone smacking a baseball bat into your gut,” Campbell, 55, says. The firm denies her version of events.

Campbell—a “pit bull,” according to her son Tyler—did not leave quietly. She filed a sex-discrimination suit in August 2016 alleging that Chadbourne treated her like a second-class citizen, paid her much less than male partners, and—when she objected—showed her the door.

Indignant, Chadbourne denied wrongdoing and lashed out. It said in court papers that Campbell lacked basic competence, alienated colleagues, and drank too much at firm social events—all accusations she denies.

For a profession dedicated to lofty concepts such as “equal protection” and “due process,” the practice of law has allowed unequal treatment of women to fester for decades. A2016 survey of the 350 largest U.S. law firms found female partners on average received $659,000 in annual pay. Male partners, meanwhile, averaged $949,000, or 44 percent more.

Campbell v. Chadbourne & Parke LLP has riveted the legal world, and rightfully so. It’s a window on what can still go wrong for women even at the top. Historically women lawyers haven’t gone public with discrimination claims—and lawsuits are uncommon. Law firms make for pugnacious opponents, and suing was once considered career suicide. In the past 20 months, though, other women have taken the same risk as Campbell. They’ve sued such well-known firms as LeClairRyan in Richmond, Va.; Sedgwick, headquartered in San Francisco; and Washington-based Steptoe & Johnson. David Sanford, the attorney representing Campbell, says he’s advising another dozen aggrieved women attorneys around the country. In May, one of them sued large New York firm Proskauer Rose, which is coincidentally defending Chadbourne in Campbell’s lawsuit. It denies wrongdoing, as do the other firms. (All the lawsuits were filed by women partners, except for Steptoe, which was brought by an associate. The Sedgwick suit was settled; the rest are pending.)

The uptick in lawyer gender-bias cases reflects a broadly felt frustration, says Professor Deborah Rhode, director of Stanford Law School’s Center on the Legal Profession, related in part to surveys showing substantial, persistent pay and promotion discrepancies. “Studies find that male lawyers are two to five times more likely to become partner than female lawyers,” Rhode says. “I think a lot of women lawyers are fed up.”

But industrywide statistics won’t be enough to vindicate Campbell. Lacking direct proof in the form of biased comments or policies, she’ll have to rely on circumstantial evidence that she was treated worse than “similarly situated” men at Chadbourne. Two retired women partners at the firm have joined her lawsuit, but a larger number of current women partners have actually condemned it.

“Some women believe that if you’re smart and hardworking, you won’t be discriminated against,” says Campbell. “It’s just not true.”


“The firm was on notice it had a problem”


The Campbell case reveals not just differing interpretations of unhappy workplace events, but two diametrically opposed realities. In one, Campbell, a highly competent lawyer, respected by peers, joined Chadbourne in good faith only to be rudely denied the compensation she was promised—and then was punished for speaking up. Campbell receives credible-sounding reinforcement from the two retired partners, Mary Yelenick and Jaroslawa Johnson, both of whom assert that for decades the firm routinely paid women less than comparably accomplished men. “I wrote memos about the disparities, spoke up at meetings, told the management committee—the firm was on notice it had a problem,” says Yelenick.

Chadbourne’s version is that Campbell’s treatment had nothing to do with her gender. Instead, the firm contends she turned out to be a disaster. Campbell became “notorious” among associates “for giving false deadlines, disappearing, and being incommunicado for days or weeks at a time, and creating unnecessary last-minute fire drills for routine court filings,” the firm says in court papers. Chadbourne and its senior leadership declined multiple requests for interviews about the litigation or its own allegations. In a written statement, the firm calls the lawsuit a collection of “baseless claims in the cynical pursuit of a big and undeserved payday.”

Lawyers familiar with Campbell, who specializes in consumer product defense, express dismay at how she’s been portrayed by her former law firm. “She’s a capable and respected member of the CPSC bar,” says Nancy Nord, a former commissioner at the Consumer Product Safety Commission.

But last September, in an open letter addressed to Campbell’s lawyer, 14 of the 16 female partners then with Chadbourne complained that her lawsuit “makes a group of very accomplished, assertive, and intelligent professional women look like they are victims unable to hold their own with their male colleagues.”


Campbell, who wanted to climb that last rung,“had finally arrived”


“Being a litigator is important to me,” Campbell says. “It’s who I am.” She speaks forcefully, unleashing large gusts of words that seem impervious to interruption—a trait common, of course, in her profession. Her parents, federal employees who didn’t go to college, raised her near the Chesapeake Bay in Maryland. A volleyball scholarship paid for her undergraduate degree from George Mason University in Fairfax, Va., and a part- time paralegal job gave her the idea of attending law school, which she did at American University in Washington, graduating in 1987.

In the 1990s, she kept practicing law full-throttle while having three children with her then-husband. “I did part-time, I did flex-time, I did it all,” she says. “I never stopped working.” In addition to gaining expertise in product-safety regulation, she became known for handling cases related to personal reputation. Two of her better-known clients were Watergate burglar G. Gordon Liddy, whom she successfully defended in a pair of defamation suits, and Deepak Chopra, for whom she obtained an apology from the Weekly Standard after the conservative magazine ran an article insulting the pop guru.

“She knows what she’s doing,” says another attorney acquaintance who requested anonymity. “I’ve referred clients to her when I’ve had a conflict.”

Traditionally, top law school graduates who go to big firms start as associates, working long hours for years before getting the chance to make partner. Those who don’t make the cut are encouraged to move on, though some hang around in a sort of limbo. Campbell hadn’t attained full partnership at Manatt, Phelps & Phillips, the Los Angeles-based law firm where she worked before Chadbourne. Instead, she worked for years as a “nonequity partner,” a salaried position between associate and real partner. Nonequity partners may be well paid, but they don’t receive a share of profits.

Surveys show that it’s still unusual for women to enjoy the prestige and remuneration that come with equity partnership, or even nonequity partnership. Almost half of associates at large law firms are female, according to 2015 data collected by the National Association of Women Lawyers, but only 28 percent of nonequity partners are women. The proportion drops even lower for full partners, to 18 percent—a figure that has increased only two percentage points since 2006.

“It took me a lot longer than it’s supposed to to reach equity partner,” Campbell says. “Part of that was due to choices I made, putting a priority on raising my kids, for a lot of years as a single mom.” After seven years as a nonequity partner in the Washington office of Manatt, Phelps, she grew restless.

Campbell wanted to climb that last rung. So in 2013, she hired recruiters who introduced her to Chadbourne, a firm willing to make her an equity partner. She accepted. “I had finally arrived,” Campbell says.


Discovering what men in her position made hit her “like a sledgehammer”


In retrospect, Campbell and Chadbourne were an odd pairing.

Chadbourne had a large contingent of litigators in Washington, but no one who did the sort of work Campbell did. Heading the firm’s litigation department from the Washington office was Lowell, one of the capital’s best known trial attorneys, specializing in politicians in trouble. (At present, he is representing presidential adviser and Donald Trump son-in-law Jared Kushner in the federal criminal probe of Russian influence on the 2016 election, and Senator Robert Menedez of New Jersey in a corruption prosecution.) In a January 2014 press release, Lowell said Campbell would help Chadbourne “build upon and diversify” its litigation team. But once she settled in, Lowell didn’t show any interest in integrating her into the office, Campbell says: “I was on my own.”

Founded in 1902 by Thomas Chadbourne, an early architect of multinational corporations, the law firm had a past more celebrated than its present. At various times it represented Winston Churchill, Howard Hughes, Brown & Williamson tobacco, and Purdue Pharma. Its infrastructure finance group had a strong reputation. But with fewer than 400 lawyers, Chadbourne was neither a global titan with thousands of attorneys offering every possible legal service nor a highly focused specialty shop. It sat somewhere in the middle. By the time Campbell arrived, the firm was experiencing partner defections and brand erosion. In 2014, its gross revenue declined 10 percent, to $254 million, according to data compiled by the trade magazine American Lawyer. Average profits for the 68 equity partners held steady at more than $1 million each.

Campbell admits she wasn’t aware of Chadbourne’s incipient slide. “I was focused on my offer,” she says. But her grasp of what that offer meant was unsteady. In calculating partners’ base pay, Chadbourne’s management committee awarded “points” nominally worth $1,000 each. But the actual criteria behind the points were unclear, and the value of the points was subject to adjustment at any time — something Campbell concedes she didn’t appreciate. When she was hired, she received 500 points plus eligibility for performance bonuses worth an additional $250,000. “I thought I had a $750,000 offer,” or slightly more than what she’d made at Manatt, Phelps, she says. Even if she received the full $750,000, though, she’d still have been 25 percent below the average among partners at Chadbourne.

Clients whom Campbell brought with her from Manatt Phelps kept her busy during the first year. She did product-safety counseling for appliance manufacturer World Kitchen and marketer Applica Consumer Products. And she brought a major fee- generating defamation lawsuit with her, too. Near the end of 2014, Campbell, like every other Chadbourne partner, received a compilation of internal financial data known as “the matrix.”

What she learned “hit me like a sledgehammer,” she says. By the firm’s tally, she had billings of $2.2 million for the year, a respectable showing. But men with similar results had been awarded far more than her 500 points, an amount that put her in the bottom 20 percent of the firm, she says.

A little number crunching revealed that, based on points awarded, women on average earned only 72 percent of what men got, according to court papers. The committee gave Campbell no merit bonus and discounted her points such that her total compensation for her first year at Chadbourne came out to only $340,000—far less than what she’d been making as a nonequity partner at Manatt, Phelps, she says.

(Chadbourne countered that Campbell’s account of her compensation is “inaccurate” but didn’t provide alternative figures.)


She was something of a loner, never seeking out other women partners


Exactly a year after she started, Campbell traveled to New York to demand an explanation from the five men on the Chadbourne management committee. She told them she deserved 950 points for 2015. The committee instead raised her points by 50, to 550. In a follow-up meeting with Giaccia, Campbell complained that her 2014 collections justified more money. He called her performance “a fluke,” she says, and suggested she should be happy with what she got.

Chadbourne says that Campbell misunderstood the compensation system. “Productivity, originations, and revenues are incomplete indicators of partners’ contributions,” the firm says in court papers. Subjective factors such as “teamwork,” “partners who have been of help to one another,” and “assumption of firm responsibilities” are taken into consideration and may help explain any apparent disparities.

Campbell wasn’t seen as a team player. Worse, she’d clashed with Lowell, the powerful head of litigation. She refused to follow his system for assigning associates to cases and “frequently contacted” him “with frantic last-minute staffing needs,” the firm says in court papers.

Campbell counters that Lowell undermined her by pulling associates off her cases and at one point told her she’d become “a legend” in the firm for being “difficult.”

By her own description, she was something of a loner, never seeking out other women partners. “Commiseration is not a Kerrie Campbell word,” she says. “I’m not a chit-chatter.”

Deeply worried, she saw her situation continue to deteriorate in 2015. She worked steadily, even during a July honeymoon on Amelia Island, Fla. Her billings slipped to $1.9 million, a 14 percent decline but still not a shabby amount. Her annual compensation dropped by a similar percentage, to $292,000, less than a third of the average take-home pay for a Chadbourne partner. While to most Americans, that would sound like a lot of money, it didn’t cover Campbell’s newly enlarged family expenses. She and her husband, John Canellakis, had six children living with them in her home in suburban Maryland, and he doesn’t work. She took out loans totaling more than $300,000 to keep up with her obligations.

At the beginning of 2016, Campbell says she wasn’t free to renew her protest over compensation since she was litigating a complex product-disparagement case in Chicago. She had yet to do so when, in February, Lowell and Giaccia showed up at her door.


“You never knew what you’d get or how the points would be discounted”


Last summer, as she neared retirement after 35 years with Chadbourne, New York partner Mary Yelenick, 63, says she received a draft of the September 2016 open letter to Campbell’s lawyer attacking the lawsuit. The firm wanted female partners to sign it. The bias litigation, the letter stated, “did not make our voices heard, as you claim,” but rather “attempted to silence us for your own purposes.” Yelenick refused to sign.

In December, Yelenick retired as planned. In March, she joined the Campbell suit as a co-plaintiff. “I can’t tell you how many times I asked the management committee, ‘Why are junior male corporate partners who brought in far less business than I did making far more than I am?’” The management committee’s point system was always inscrutable, she adds. “You never knew what you’d get or how the points would be discounted.”

Jaroslawa Johnson, 73, ran Chadbourne’s office in Kiev, Ukraine, for a decade until it was shut in 2014. She also joined Campbell’s case, seeing her own experiences described in the complaint. Chadbourne’s compensation “matrix” provides concrete evidence of gender disparities, she says. When she’d pointed that out to management committee members, “silence was the response.”

Chadbourne has responded mildly to Johnson’s and Yelenick’s claims, asserting in court papers that their compensation always reflected their contributions to the firm, not their gender. The response to Campbell has included fiercer stuff. Chadbourne alleges that among the reasons it let Campbell go was her drinking. She “displayed poor judgment with respect to the use of alcohol in the presence of a client,” the firm says. And she arrived at an office Christmas party in 2014 “already inebriated, acted in a shocking and inappropriate manner toward the male fiancé of a male Chadbourne attorney, and made graphic comments to a male Chadbourne attorney while at the event.”

Campbell flatly denies the allegations, saying of the supposed incidents, “They never happened.”

More substantively, Chadbourne is seeking to get the discrimination case dismissed based on the argument that, as a former partner and part-owner of the firm, Campbell isn’t entitled to sue under federal anti-bias laws meant to protect employees. Campbell’s lawyer, Sanford, has countered that only the management committee controlled Chadbourne, making Campbell more akin to an employee. Under a 2003 U.S. Supreme Court ruling, the issue will turn on a judge or jury’s determination of how much control the committee had over Campbell, versus the degree of influence she had on the firm.

Since Campbell’s lawsuit was filed, Chadbourne’s competitive position has continued to erode. In February, the law firm announced it would fold itself into the much larger global firm Norton Rose Fulbright—the deal closed in late June.

Chadbourne agreed to give up its once-storied name and 115-year- old identity. Norton Rose is itself the result of previous mergers in a continuously consolidating industry. The megafirm has about 4,000 lawyers in 59 offices spread across 33 countries and revenue expected to total about $2 billion. In addition to bulking up Norton Rose’s presence in New York and Washington, Chadbourne will bring with it the Campbell suit, which now targets the larger combined firm.

Campbell acknowledges she’s unlikely ever to work again for a large law firm. She’s put out feelers, but they’ve gone nowhere. For the first time, she’s setting up a law office at home and hoping clients will take a chance on a sole practitioner.

As for the lawsuit, she says she expects it will go to trial, as neither side seems inclined to settle. “I don’t think this case should be about Kerrie Campbell at a Christmas party,” she says. “This is about how anti-discrimination law applies to big law firms, how women as lawyers are treated.”

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