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Journal of the Institute for the Study of Legal Ethics

Publication Date

1-1-1999

Introduction

Discussions about law firm diversity tend to treat increasing the number of minority partners as both the ultimate goal and the end of the analysis. The emphasis that diversity advocates place on partnership statistics is understandable. Although firms have hired more minority associates in recent years, the number of minority partners has remained virtually unchanged. As a result, "in every ... city which has studied the matter, minority retention was stated by the interviewees ... to be the firm's most serious problem."

Nevertheless, treating the partnership decision as the end of the diversity analysis is a mistake. This is true for two reasons. First, just because a minority lawyer becomes a partner does not mean that he or she will stay a partner. In today's competitive environment, partnership is no longer the equivalent of tenure. With increasing frequency, partners at large law firms leave their prestigious positions. Some leave voluntarily for partnerships in other firms, in-house legal departments, investment banks, or government service. Others depart involuntarily, when their fellow partners feel that these senior lawyers are no longer producing sufficient revenues to justify their position. Oftentimes, the decision to leave is prompted by some combination of positive and negative factors. The bottom line, however, is that retention now is almost as important an issue for partners as it is for associates. This is particularly true, as I will argue below, for minority partners who have recently been exiting their prestigious partnerships at alarming rates. Therefore, if a firm wants to make a lasting change in its diversity picture, it must not only promote minorities to partnership but retain them in that status as well.

Second, although the term "partner" invokes reassuring connotations of equality, it is now painfully clear that some law firm partners are substantially more equal than others. At many firms, partners are formally divided into two tiers-equity (or "share") partners who divide the profits of the firm and non-equity (or "income") partners who, like associates, continue to be paid a salary. But even among firms that maintain a formally unified partnership, partner compensation and control over firm management vary considerably within the partnership. With few exceptions, most firms have moved away from the lock-step compensation systems and "one person one vote" regimes that characterized the so-called "golden age" of the large law firm. Instead, contemporary elite firms typically employ partner compensation systems that tie a lawyer's income (at least in part) to his or her individual contribution to the firm. Partners who make the biggest contribution to the bottom line and, therefore, receive the largest slice of firm profits, also tend to have significant influence over firm management; either formally, for example, by managing a practice group or serving on the firm's executive or compensation committee, or informally, through their implicit threat to leave the firm with their clients in tow if they become unhappy with firm policy.

Once again, these distinctions among partners threaten the overall goal of achieving true integration in America's elite firms. As I argue below, there is growing evidence that minority partners are concentrated in the lower partnership tiers-income rather than equity, at the bottom of the "point" scale in those firms with a unified partnership-and they hold few meaningful leadership positions. As a result, minority partners are in danger of becoming-to play on Robert Nelson's memorable characterization of elite firm lawyers -partners without power in their own institutions.

Not surprisingly, this second problem-that minority partners are located at the bottom end of the partnership pecking order-is related to the first, i.e., the recent exodus of minority partners. Because they have less seniority and clout than their white peers, minority partners are more likely to look for other employment opportunities and to consider those opportunities more attractive than would partners who see themselves as playing a central role in the firm and who are being compensated accordingly. At the same time, minority partners live in constant fear of the kind of demotion or even outright expulsion that happens to partners who have neither the financial nor the political resources to protect their interests inside the firm. The combination of the "pull" of the marketplace and the "push" caused by their diminished status in the workplace generates a powerful centrifugal force that spins minority partners out of elite firms. This exodus is doubly wounding to a firm's diversity efforts since there is substantial evidence that the presence of minority partners improves a firm's ability to recruit and retain minority associates.

In order to reverse this process, or at least slow it down, firms must begin to understand why minority lawyers tend to become partners without power. In the remainder of this essay, I offer some tentative explanations for this phenomenon. I base these preliminary conclusions on my prior work on large firms and on research for a forthcoming book on black lawyers in the corporate "hemisphere" of law practice. As part of this research, I have interviewed more than one hundred fifty lawyers, many of whom are, or have been, partners in large firms. Based on these interviews and other information I have collected, I have begun to see certain patterns regarding the ability of black partners to compete effec- tively in the three interrelated markets that determine power and economic rewards inside elite firms: the external market for new business, the internal market for work from existing clients, and the labor market for associates (particularly senior associates). Black partners face structural barriers that impede their ability to succeed in each of these markets. Moreover, these disadvantages persist even though black lawyers who become partners often have higher formal credentials (i.e., educational credentials and prior experience) than their average white peers. These formal advantages-which often play a key role in helping a black lawyer get a job in an elite firm and to succeed as an associate-frequently do not translate into the kinds of capital that attorneys need to succeed in the quite different markets in which partners compete. Instead, the fact that many black partners have followed a different route to their current positions than their fellow partners tends to reduce their ability to gain access to the kinds of networks and relationships that play a crucial role in gaining the respect and cooperation of clients, peers, and subordinates. Moreover, these structural problems tend to be mutually reinforcing; a black partner's difficulty in one market tends to create additional problems in others. If law firms are to make long-term progress on their diversity goals, they must find ways to help minority partners counteract this interlocking web of disadvantage.

My observations proceed in four parts. Part I briefly sets out the current status of black partners in elite firms. Part II then examines what it takes to become a powerful partner and describes the role that each of the three markets- external, internal and labor-play in defining a partner's power and status within the firm. In Part III I argue that black partners, notwithstanding their strong credentials, face important obstacles to succeeding in each of these markets. Because my research is ongoing, my tone in this part is speculative, and the evidence I offer in summary form is merely suggestive. Nevertheless, the patterns I identify resonate with what we know about the institutional structures and incen- tives that characterize contemporary elite firms. Finally, Part IV offers a few brief thoughts about how firms might begin to ameliorate these disadvantages.

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