Why Women Leave Big Law To Start Their Own Firms

  • Why Women Leave Big Law To Start Their Own Firms
  • Why Women Leave Big Law To Start Their Own Firms
  • Why Women Leave Big Law To Start Their Own Firms
  • Why Women Leave Big Law To Start Their Own Firms
  • Peggy McCausland was tired of her firm’s networking events.

    The potential clientele she wanted to woo — business women — weren’t showing up, she said. So McCausland conceived her own networking event that would draw them — golf lessons, catered meals and shop talk — and asked for the necessary marketing funds. She was a partner at the firm, Blank Rome, after all.

    “The response I got from [a senior partner] was, ‘Where are you going to find a golf course that’s gonna let a bunch of amateur women come hack it to bits?’” McCausland recalled ten years later. She did not call out Blank Rome by name during her interview.

    She stayed at the firm for a few more years, but after a dispute over whether she should receive origination credit, McCausland said, she grew so frustrated by the structural inequities and implicit sexism she perceived that she abandoned her Big Law career for good. In 2006, The Law Offices of Margaret A. McCausland was born. And in 2010, her daughter Trish joined after her own stints in Big Law. The two now run the employment law firm as McCausland & McCausland.

    McCausland’s story illustrates how increasingly, women are choosing to start their own law firms rather than persist in Big Law, where many say they feel the cards are still stacked against them. Not infrequently, these women leave at the partner level to open up practices that compete with their old firms. McCausland said she took about 80 percent of her clients, and now, depending on the year, earns 10 to 30 percent more than she did as a partner.

    Big Law Business interviewed more than 20 women who started their own firms, more than half of whom became partner before departing Big Law. There were significant commonalities in their stories, chief among them frustration — with what they perceived to be inequitable pay compared to male counterparts, the slow grind of what they saw as implicit sexism, and the structural barriers to their advancement embedded within the Big Law ‘boys’ club’ as some called it.

    The growth in women-owned law firms comes at a time when many large corporations, from Microsoft to Metlife, are increasingly scrutinizing the gender and racial composition of their outside counsel and law firms are scrambling to diversify their ranks.

    The women who shared their stories were wary of badmouthing their former firms, either because they did not believe those firms stood out as any worse than others in the industry, or because they left more recently and were still in the process of establishing their new practices.

    Christopher Lewis, partner and Chief Officer of Diversity and Inclusion at Blank Rome, said he was not aware McCausland was denied marketing funds or the manner in which it occurred, and that he found it “hard to believe anyone from our firm ever said such a thing.” He added, “I find it unacceptable and am certain that it would not be tolerated today.”

    Lewis also said the firm has “evolved markedly” over the past decade.

    “The legal profession has a special responsibility to be the guardians of justice in our society,” Lewis said. “Historically, Big Law has failed to live up to that responsibility.”

    Listen to episode one of the Big Law Business podcast on why women are leaving Big Law.

    —–

    That Big Law firms have struggled to retain women is well-documented. The gender dynamics may have improved since Peggy McCausland left ten years ago, but women have barely made a dent in the ranks of equity partners, growing from 16 percent in 2006 to 18 percent in 2015, according to the National Association of Women Lawyers. Across the partnership ranks, they’ve grown from 18 percent in 2006 to 22 percent in 2016, according to the National Association for Law Placement. For women of color, these numbers are even lower.

    Women remain underrepresented across the legal profession, but their lack of progress in the highest ranks of BigLaw stands out in comparison to corporations (where women make up 25 percent of general counsel), law schools (where women comprise 30 percent of deans), and the state and federal judiciary (which is made of up 27 percent women), according to the American Bar Association.

    Law firms have grappled with how to stem the talent drain of women, who enter the field in equal numbers as men but don’t reach leadership positions at the same rate. The shrinking percentage of women as one moves up the law firm hierarchy from associate to partner belies the fact that many women, such as McCausland, make partner but still choose to leave Big Law.

    No one seems to be studying exactly how many women-owned firms exist, but there are indications the number is growing. For instance, the National Association of Minority and Women-Owned Law Firms, reported 157 minority and women-owned law firms in 2016, up 33 percent from 2013. More than half of those are women-owned, according to NAMWOLF CEO Joel Stern. But the organization’s membership leaves many women-owned firms uncounted.

    The departure of women from Big Law and the growth in women-owned firms are linked.

    “In the last five to 10 years, more and more women are starting firms and it’s not for lifestyle reasons,” said Nicole Galli, who last year co-founded a networking group for entrepreneurial women in the legal profession, called Women Owned Law.

    “We’re not leaving firms because we couldn’t figure out how to make it work,” said Galli, a former Pepper Hamilton partner who now runs her own shop.

    Most major U.S. law firms were founded by and initially employed only white men, said Sheri Zachary, director of career development and inclusion at Saul Ewing. Now, as women and people of color have entered the ranks, they’re bumping up against ingrained power structures and obstacles to their career advancement, according to Zachary.

    “Instead of fighting the fight, they go around the system that’s in place right now and try to build something different,” she said of the women who leave.

    Read the accounts of women — in their own words — of why they left Big Law to start their own firms. 

    —–

    One of the chief structural barriers women face is unequal pay. In Big Law, male partners still out-earn their female counterparts by 44 percent, according to a 2016 survey by Major, Lindsey & Africa. Of the 2,153 partners polled, men earned an average of $949,000 per year while women brought in $659,000.

    “There is a deep tradition of men passing business to each other,” said Columbia University law professor Suzanne B. Goldberg, who studies gender and discrimination law. “As a result, many women don’t receive the support for business generation that their male colleagues might.”

    This discrepancy was highlighted in a 2015 study by consultant Carol Frohlinger, who found that female equity partners are less likely to benefit from law firm-sponsored business development activities than male equity partners. Female equity partners are also far less likely to be included in pitch teams, Frohlinger found.

    Overall, the experience for women in most Big Law firms is “quite different” than it is for men, said Goldberg.

    Several of the women interviewed by Big Law Business claimed to now make as much as or more as they did at their former firms. All of them, even those who make less, said they were happy having more control over their earnings.

    McCausland said she learned from a male partner at Blank Rome that many attorneys she assumed were rainmakers hadn’t actually brought in much new business.

    “He said, ‘Those guys aren’t rainmakers. They inherited those clients,’” McCausland recalled. “It was such a wake up call for me.”

    As the only woman on her team, she said she felt stifled within the firm: “I thought, ‘I could be a rainmaker too if people just handed me clients.’”

    McCausland added, “I was too scared to go out on my own because I thought I couldn’t bring in business, then I realized I can bring in business. I can’t get credit for it [at a Big Law firm], but I can bring it in.”

    Christopher Lewis said Blank Rome’s current origination policy allows credit to be split among attorneys, and that the firm transfers billing responsibility and credit to women attorneys when they are the ones supervising work. 

    “There may have been a time decades ago when Big Law was essentially an ‘old boys’ club and work was bequeathed or inherited,” he said. “Those days are over.”

    Listen to episode two of the Big Law Business podcast on why women are leaving Big Law.

    —–

    Some of the women interviewed said there weren’t any overt policies they could point to, or protest, but the structures and cultures and their firms, along with daily encounters with implicit sexism, ultimately wore them down.

    Elaine Johnson James started her own practice in 2015 after 33 years in Big Law including time as a partner at Edwards Angell (now part of Locke Lord); Nason, Yeager; and Berger Singerman.

    James, who is African-American, recalled one partner at Edwards Angell whom she felt treated her differently both because of her race and gender. She said the partner, who was younger than her, repeatedly questioned her judgment.

    After a big litigation win, the partner asked James if she had run her marketing ideas by the men in the office, but did not ask the men if they had run their ideas by her, according to James.

    “It wasn’t a situation where you would naturally expect this kind of scrutiny and criticism,” said James, who was also a partner at the time. James asked to keep the partner’s name off the record because she didn’t want to call him out. Reached by phone, he declined to comment.

    Both James and the other partner left Edwards Angell before it merged with Locke Lord. A spokesperson for Locke Lord said the firm is “proud of our promotion and support of women and diversity.” Locke Lord “is one of the few top 100 law firms to have a woman at the helm, and she is the second female leader of this firm,” the spokesperson added.

    “Sometimes it’s the straw that breaks the camel’s back, and sometimes it’s just the water on the stone, the erosion,” James said, in explaining her eventual decision to leave Big Law life altogether.

    Beth Wilkinson said she left her partnership at Paul Weiss in 2016. She founded a new firm, Wilkinson Walsh + Eskovitz, with two other Big Law partners including Alexandra M. Walsh, also from Paul Weiss.

    “By starting our own firm, Alex and I wanted to show that we could build something different,” said Wilkinson, who explained that the young firm has focused on diversity from the start.

    In addition, Wilkinson Walsh + Eskovitz, does not track any billable hours, which Wilkinson said levels the playing field. She said women, who often have greater care-giving responsibilities outside the office, can be unfairly held back by billable hour requirements, particularly if they are efficient workers.

    Wilkinson said she and her partners still represent the same Fortune 50 clients on bet-the-company matters that she did at Paul Weiss. “We’ve been financially successful in a way that goes beyond any of the firms we worked at previously,” she said. The firm currently employs just over 30 attorneys, according to Wilkinson.

    She said Paul Weiss is a “terrific” firm and that its leaders have good intentions in their efforts to increase the number of women and diverse attorneys. But she said the structure of the firm, combined with a paucity of women in leadership roles, meant that opportunities for growth were disproportionately given to men. For example, one person on the firm’s six-member compensation committee is a woman, she said. 

    “I don’t think it’s easy for any of these law firms [to change], in part because of how they were historically built,” Wilkinson said. “In some ways it’s easier to do what we’re talking about because we started in 2016 and not in 1926.”

    Brad Karp, chair of Paul Weiss, said he is proud of the firm’s record of gender diversity, noting that the firm had the highest percentage of female equity partners on The American Lawyer’s recent “A-List” law firm ranking. Women make up 23.3 percent of the firm’s equity partnership, according to AmLaw.

    “But it’s more than mere numbers,” said Karp. “Women at Paul, Weiss hold positions of influence, serving as the firm’s deputy chair, members of the firm’s compensation committee and its management committee, chairing departments, offices and practice groups, and leading significant client relationships.”

     

    —-

    Like Wilkinson, many women who launched their own practices have touted their firm structures as an antidote to BigLaw.

    When Laura Solomon departed Ballard Spahr Andrews & Ingersoll in 1999, she purposefully distanced her own firm from the Big Law model, prioritizing work-life balance and a “very liberal view of origination credit” that allows even junior associates to get 100 percent credit for bringing in new work.

    She said she left Big Law in large part because the work she intended to do, working only for non-profits, wasn’t possible there at the time. She also cited the “macho environment” of her public finance practice as a turn-off.

    “It is an interesting thing to think about whether, if I had really felt that I had a clear path to partnership and could have had the practice I wanted,” she said. “Would I have somehow tried to make it work if I had seen great female role models who were married, with children and meaningful legal practices?”

    Mark Stewart, chairman of Ballard Spahr, told Big Law Business his firm is making an effort to transition work in a way that overcomes systemic biases.

    “We’re careful about making sure that our female partners have roles within overall client relationships and that they can inherit clients,” he said. “We can make sure that there are women in those positions so there is a more natural position.”

    When asked how he thinks Ballard Spahr measures up to the industry, Stewart said, “I think we’ve learned some things, but there’s work to be done, and it’s hard. I don’t think we or I have all the answers or have got this nailed. It’s a process.”

    Francine Griesing went out on her own in 2010 after leaving Greenberg Traurig. Her firm, Griesing Law, now claims to be the largest all-women law firm in Philadelphia. It does not give origination credit and encourages each attorney to develop a specialty, she told a panel audience at Penn Law in 2016.

    In 2012, she sued her former firm for gender discrimination, alleging Greenberg paid female shareholders less than their male counterparts and froze them out of leadership positions. “At every stage, I faced incredible obstacles that my male peers did not face,” she told The American Lawyer after settling the dispute for an undisclosed sum.

    A Greenberg Traurig spokesperson Jill Perry said the firm is strongly committed to gender diversity, and only commented on the lawsuit to say that it was “concluded amicably.” Greenberg Traurig denied the claims in court.

    “One of our three vice chairs is a woman in addition to the many women attorneys who head our offices and practices,” she said. “Additionally, between 2013 and 2016 women attorneys accounted for a 62 percent increase in Greenberg Traurig’s US headcount.” 

    One of Greenberg’s two presidents, ABA President Hilarie Bass, recently launched a bar association initiative to study why women leave Big Law even after they make partner.

    “I think we’ve really touched a nerve,” Bass told Big Law Business. “There are a lot of people who want to figure this out. What can we do to make sure we don’t lose women at the point in their career when they have the most expertise? It’s a tremendous resource drain.”

    Read Big Law Business’s full interview with Bass on her new research project on women leaving Big Law. 

    —-

    The decision to open up a new firm or solo practice is not an easy one. Many of the women who spoke to Big Law Business said they were only able to do so because they had an alternative source of income or a spouse with steady work. And lawyers who step out on their own must sacrifice the built-in referral networks, marketing, and business support that come with large firms.

    But none of the women said they ever intend to go back to Big Law, and all of them encouraged others to follow suit.

    “It took me by surprise how doable it is,” said Emily Kirsch, a litigator who worked at Reed Smith and Kirkland & Ellis. “Big Law kind of bangs into you that you need the platform.”

    As in-house law departments look to streamline their outside counsel spend, Kirsch said she has found value marketing her firm as a lower-cost alternative to Big Law, particularly when it comes to small projects for big clients.

    “This is what works for me,” said Kirsch, who recently added a partner to her practice.

    Suzanne Meehle went out on her own after finding there were “no real strong opportunities for women” in big law firms.

    “I looked at a few different firms,” Meehle said, “and what I learned was that it was the same all over.” Today, she runs her own practice with entertainment lawyer Davey Jay.

    Like Kirsch, she challenged the expectation that her success might be defined by a partnership in a traditional Big Law setting.

    “I don’t have to make shareholder at [a big law firm],” she said. “I can make shareholder and Meehle and Jay just fine.”

     

    Write to the reporter at srussellkraft@gmail.com.

    Write to the editors at gabefriedman@outlook.com and csullivan@bloomberglaw.com.

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