In the recent Forbes Magazine article, Why Women Are Leaving The Workforce After The Pandemic—And How To Win Them Back,” consulting group Deloitte cites research showing that the pandemic has disproportionately impacted women in the workforce, with female employees leaving in record numbers due to the difficulty of balancing workloads with increased home responsibilities. However, the authors advise companies that there are ways to “win back women,” stating that employers that “give women the culture and support to enable them to succeed have a more productive and motivated workforce and are likely to report greater retention.” They state emphatically that “the time is now” to “restore gender equity within their organizations.”

The pandemic has exacerbated existing gender disparities in employment–but in fact, even before 2020, many big firms struggled to retain female employees, in large part due to dissatisfaction with gender disparities in compensation and advancement. A 2019 ABA Journal article, “Why Are Women Leaving, Big Law Looks for an Answer and Finds Big Disparities,” by Debra Cassens Weiss, advises law firms to “develop strategies and set targets for what they want to achieve,” including taking a “hard look at gender statistics” in their firms, not just currently, but over time. Citing a then-recent report by Roberta D. Liebenberg and Stephanie A. Scharf entitled, “Walking Out the Door: The Facts, Figures, and Futures of Experienced Women Lawyers in Private Practice,” Weiss asserts that companies’ HR departments must plan not only on addressing current gender pay gaps, but continually analyzing data in the future as a regular part of annual compensation and promotion reviews. By regularly reviewing their data, firms can ensure equity in compensation and advancement, and retain female employees.

In today’s workplaces, and especially within law firms, it is important to understand what factors may have led to gender differences in pay and promotions, and to address differences that cannot be clearly justified. Indeed, in recent months, we have observed a substantial uptick in demand for labor economists, such as our own compensation consultants at Welch Consulting, to provide proactive studies of pay differences in law firms.

Understanding Differences in Individual Compensation

pay equity

One of the most challenging aspects of analyzing gender compensation outcomes for highly skilled employees—who often contribute significantly to generating or maintaining their own (and their firm’s) business—is identifying and providing documentation that demonstrates their value in less easily quantifiable ways: what actions or business initiatives (including outreach efforts) individual employees have taken in their careers, and what business consequences have arisen as a result. If law firms are to meet a challenge of explaining gender differences in compensation among attorneys, a greater emphasis must be placed on collecting and memorializing individual-specific data. This includes information to support why some new attorneys at the firm may be paid above-average salaries (regardless of gender) at hire, what empirical data justifies bonuses being set as high (or low) as they are, how non-revenue-generating activities are valued, etc.

Further, these efforts at data collection must be on-going, beginning with documenting individual-specific drivers of compensation at hire for future employees, and regularly reviewing and updating current employee data files. By implementing forward-looking procedures that explicitly document the factors that lead to individual compensation differences, human resources professionals will be able to construct a database that provides transparency in compensation decisions (and, indirectly, in hiring and promotional questions arising among all employees.)

As importantly, gathering and recording individual-level factors will allow employers, if challenged in the future, to benefit from their enhanced ability to defend against discriminatory claims brought by groups of employees—claims featuring now-documented abilities of, and historical influences on, individual employees that can be shown to differ within the group.

Experienced Labor Economists

Welch Consulting labor economists regularly consult with clients to address employment issues brought to light under federal and state regulations. We commonly assist law firms and other large organizations with matters relating to labor economics and statistics, and our expertise has been sought out within almost every industry in the country.

Interested in learning more about the industry leader in economic research and analysis? Contact us using our online form or call our offices in Los Angeles, Washington, D.C., or Bryan, Texas.