September 27, 2022

Volume XII, Number 270

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September 27, 2022

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September 26, 2022

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2022 Law Firm Culture Survey

Introduction

Since the pandemic shut down much of American society, there have been innumerable articles and stories questioning or bemoaning the loss or diminishment of work culture. A recent survey of law firm culture conducted by Major, Lindsey & Africa found that tangible culture traits are not likely to be easily lost, as they are deeply ingrained in the law firm ethos. But, at the margins, any number of traits can color an environment, resulting in disaffection.

For the most part, corporate law firms of all sizes are built around common professional ethics and mores but can vary widely in what they individually value. Likewise, within firms, there can be wide gaps between what different members value. Where such gaps concern important traits of culture, bonds between lawyer and firm can weaken, putting partner and group relationships at risk. An MLA 2020 survey of partners who moved from one firm to another found that culture trumps compensation when deciding whether to stay or go, and where to go. That said, nearly 80% of respondents noted that their firm’s values align with their personal values. This piece addresses how the culture of corporate law has changed in the era of Big Law.

Background: Law Firm Culture is Grounded in Law

Miriam Webster defines culture as “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” Law firms share a culture bounded by state laws and bar association rules and obligations that impose guardrails and professional responsibilities which confine lawyers’ behavior in important ways. Behavior within those boundaries form the foundation of law firm culture. It is on top of this regulated foundation that individual personalities interact to set firm policy and direction, based on what firm members value.

Even with a solid foundation, law firm culture can evolve and change over time, though such change is usually gradual. Both of these truths can be seen in the culture trends within Big Law.

Culture of Big Law

The era of “Big Law,” as defined and chronicled in the legal press, began in the late 1970s and early 1980s. It was popularized by rising media coverage of lawyers and law firms who worked alongside corporate financiers and dealmakers of the day who were reshaping corporate America through hostile takeovers and leveraged buy-outs. In 1987 the world was introduced to the first list ranking the 100 highest-grossing law firms. It was a major inflection point for the profession.

Soon, the financial performance of America’s biggest and most reputable law firms also showed them to be among the richest, in quantifiable amounts. Topics like revenue per lawyer, compensation, and profits per partner became regular discussion fodder, as well as a catalyst for what has since become, and remains, an everchanging law firm landscape, due to the phenomenon of lateral partner movement. To that time, virtually all firms observed an up-or-out policy, meaning lawyers not supported for promotion to partner were asked to leave.

Making partner was the proverbial brass ring. It was virtually unheard of for a person who had climbed through the ranks and grabbed that ring to ever think of moving to another law firm. It would have been seen as a betrayal of those who had trained and promoted them. Consequently, law firms, which were more hierarchical in those days, mostly lockstep in compensation, and uniform in values, reinforced and preserved their culture by promoting people who shared the same values, and often a similar background profile. Each generation trained and passed its culture, clients and values to the next. There were few women, people of color and virtually no “out” LGBTQ members to agitate for anything different. Until the Boomers – the original disrupters – arrived.

From the time the first wave of Boomers began rising to partner level in the late 1970s and early 1980s, they began to disrupt the profession, transforming the staid culture of “The Man in the Grey Flannel Suit” into the ambitious and flamboyant culture of the “Masters of the Universe.” This is when the culture of corporate law evolved from genteel profession into full-fledged competitive corporate business, like the clients they served.

As part of that evolution and desire for growth, law firms began to expand into markets beyond their home jurisdiction, necessitating the acquisition of local talent in new markets. Lateral movement has since become a fixture of the law firm landscape and, indeed, a necessary growth strategy for many firms. To withstand the many different personalities and traits that pass through a modern corporate firm, and attract quality talent while minimizing talent losses, firms must have a coherent culture that encompasses traits generally valued by women, people of color and LGBTQ lawyers, distinct groups who share a common desire to be seen, heard, given an opportunity to perform and evaluated on their merits.

Culture of Ownership

Today, most law firms have adopted policies or practices intended to support women, people of color and LGBTQ lawyers in their quest to succeed in the profession. These include policies oriented toward well-being and work-life balance that prior generations might have summarily dismissed or paid lip service to, but never fully embraced as an important element of firm culture. Those were personal issues to be addressed outside the work environment.

Yet, as much progress as has been made toward making the law firm environment more diverse and supportive, there remains a stubborn resistance to elevating more women, people of color and LGBTQ lawyers to equity status, i.e., to become co-owners of the firm. In 1987, women made up 23%, and people of color 3.62%, of lawyers in the nation’s largest firms, and 7.93% and 2%, respectively, of partners. Today, despite being 54% of the law school population, women represent only 37.4% of the profession, and only 23% of equity partners, with women of color representing only 2% of equity partners. Indeed, all minority lawyers comprise just 14.6% of the profession. These figures – 35 years on – suggest that while women have had a significant impact on law firm culture, they have not seen as great a reach in law firm ownership. They have acquired influence more than equity – soft power rather than a hard vote. Same for lawyers of color.

And yet, men and women disagree on whether their firm is succeeding in promoting women to equity partnership, by a 31-point spread, according to a recent Bloomberg Law story. June 2, 2022, “How Big Law Aims to Make Good on ‘Meritocracy,’ Lessen Pay Gap.”

The paucity of women and people of color at the equity level may account for the wide gap in values assigned by men and women to certain culture traits. For example, 19 percentage points separate men and women on whether women and people of color occupy significant leadership positions within law firms. Where 45% of responding women see that as something they’d like to see more prominent in their firm, only 26% of men do. And where 51% percent of women ranked profit-mindedness (defined to mean linking bonus and promotion to billable hours, and less emphasis on pro bono and wellness issues), the trait they consider most negative about their firm’s culture, only 38% of men hold that view. Were a more diverse equity voting class to speak on this and other issues, it is likely there would be even greater support for elevating more women and people of color to positions of leadership, and for encouraging wellness and self-care, to preserve one’s physical and mental faculties for the long haul. This would also narrow the current gap, enhancing value alignment.

Culture Trumps Compensation

Notwithstanding how competitive the legal market has become as a result of its tremendous economic growth in the Big Law era – with revenues reaching $6 billion and first-year salaries north of $200,000 – economics are not the primary driver of most firms’ cultures. Indeed, in a 2021 MLA survey of Millennials, more than 80% of respondents said they’d give up part of their compensation for more time away from work, whether in fewer billable hours, a flexible work scheduled or more vacation time.

Respondents to MLA’s Culture Survey make clear that economics (emphasis on profits and billable hours), can actually strain firm culture. Sixty-one percent of survey respondents report that they previously worked in a firm with a materially different culture than their current firm. Traits they disliked in the prior firm’s culture included profit mindedness and high performance expectations.

Culture also tops compensation when partners consider where to grow their practice. Partners who responded to MLA’s 2020 Lateral Partner Satisfaction Survey reported that they left a prior firm due in part to culture issues. Culture outranked compensation 4.30 to 3.71 on a 1-5 scale, with 5 being “most important,” in why they chose their new/current firm. Lateral Partner Satisfaction Survey Table 4, p. 15.

Of all the trends that have passed through Big Law culture, none has had a greater impact over the past 45 years than the ongoing campaign for greater diversity and inclusion. The culture of the profession has evolved greatly, in many ways, from the hyper-macho up-or-out Masters of the Universe ethos of the gogo 1980s, to law firms adopting policies supporting alternative work schedules – flex time and part time –alternative paths – non-equity or contract partner – or even an alternative status, like staff attorney, as well as supporting efforts toward well-being, work-life balance and working from home. These changes and accommodations have all been hugely important, and remain so. Yet, the continuing lag between the number of women, people of color and LGBTQ lawyers coming through the pipeline and becoming owners of the law firm reflects poorly on the men who, still, make the vast majority of major decisions. Firms that fail to see and pursue the value of full diversity, inclusion and representation risk becoming an unpopular destination for a wide variety of candidates.

Wide Gaps in Culture Can Lead to Alienation

Wide gaps in certain values between law firm members are a worry for law firm leaders, as failure to reconcile or mitigate them can risk alienating or losing talented lawyers.

Eighty percent of African Americans and 50% of Asian Americans/Pacific Islanders would like to see greater diversity in their law firms. A recent ABA report detailed a study of minority women in major law firms, which found that 70% of women of color have considered leaving corporate law, because the culture is not accommodating and doesn’t fully match their values. Fifty-three percent of African Americans, 61% of Asian American/Pacific Islanders, and 30% of Hispanics would like to see more women and people of color in significant positions of leadership. Only 32% of white respondents feel the same.

Though substantial majorities rank their firms 7 or above, on a 1-10 scale (where 10 is wholly consistent with personal values) in commitments to: diversity and inclusion, work-life balance, supporting women, and mentorship and transparency, firms would be wise to remain attuned to these issues. Culture gaps can weaken the bond between firm and lawyer. Once frayed, a lawyer may seek to move their practice to a more compatible culture. Sixty-one percent of Culture Survey respondents indicated that they had worked at a prior firm – their values didn’t remain sufficiently aligned, something also seen in our Lateral Partner Satisfaction Survey.

Fallen Stars of Big Law Culture

When I entered the profession in the mid-1980s, law firms were big on heritage. It seemed every firm’s marketing brochure, in the days before websites, had an origin story that claimed a 100+ year history and identified significant firm milestones, expansions, name evolutions, and notable members who left their mark on the firm, community or profession. Today, heritage never ranked higher than 17th place among the 28 culture traits respondents ranked in response to MLA’s Culture Survey.

Intellectual elitism was another prominent culture trait of Big Law in the 1980s.That, too, has lessened in importance over time, as it never broke the top 10 list of traits respondents ascribed to their firm. In identifying traits that best embody their firm’s culture, or that respondents would like to see more of, being seen as intellectually elite ranked 20th. Notably, both of these traits – heritage and intellectual elite status – still rank high among the 10 firms culture survey respondents indicate they most admire.

Another trait of the “greed is good” culture of the 1980s was the boast about how transformative, or how big an impact particular deals and transactions had or would have on whole industries and communities. Books with titles like “Predator’s Ball,” “Barbarians at the Gate,” and “Bonfire of the Vanities,” and the movie “Wall Street” captured the zeitgeist of the era, and the insider trading scandals that were part and parcel of it. Virtually all of the real events in those stories called on the services of some of corporate America’s biggest and most well-known lawyers and law firms. In the current age of athleisure wear, man-buns and working from home, the chest-pounding “we do big things” culture trait so prevalent in the 80s never ranked higher than 18th among the 28 traits presented in MLA’s Culture Survey. Yet, both heritage and intellectual elitism remain among the top 10 traits of the 10 most admired firms.

Another trait from the 80s that appears to have fallen completely out of favor is leverage, or partner/ associate ratio. This was once a key feature of law firm culture, certainly its economic culture, and conversation, especially within Big Law. Today it is the least favored of all 28 traits included in MLA’s survey. It ranked 27th among traits respondents indicate define their firm’s culture, and dead last among traits that make respondents feel most positive about their firms. Relatedly, profit mindedness, when elevated over policies favoring well-being or pro bono, is also strongly disfavored -- the most disfavored trait – by 51% of women and 38% of men. This was recently echoed in a Law 360 Pulse article, dated June 6, 2022, “Attorneys Happiest When Valued For Their Talents.”

Conclusion

The profession’s evolution from a hierarchical male-dominated culture to one that includes and values the presence and involvement of women, people of color, and LGBTQ members, has been a long, hard slog. Continued progress is needed, and a net positive for all of society. The more people see themselves represented in sufficient numbers throughout different levels of the profession, the more encouraged they and others are to pursue their career in law, or otherwise feel comfortable engaging with the profession. That brings in new voices and different perspectives which influence culture, usually for the better. Better cultures hold together longer – ask any enduring law firm; it’s probably part of their 100+ year origin story.

©2022 Major, Lindsey & Africa, an Allegis Group Company. All rights reserved.National Law Review, Volume XII, Number 207
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About this Author

Ronald E. Wood Managing Director Major Lindsey & Africa
Managing Director

Ronald E. Wood is a Managing Director in our Partner Practice Group where he represents and places partners, counsel and groups into top global, national, regional and local law firms throughout Los Angeles and Southern California. Ron brings a unique perspective to legal recruiting having been a litigator in large and small law firms, a federal enforcement lawyer and in-house counsel. He is the creator and author of Major, Lindsey & Africa’s Law Firm Culture Survey, which looks at the characteristics that define a law firm’s culture.

Ron...

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