Around the world in the legal profession: Women get in, but not up

Ina Ganguli, Ricardo Hausmann, Martina Viarengo 09 July 2020

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The absence of women in top positions in the corporate, financial, and legal sectors, and among top income earners, has been widely documented (e.g. Bertrand et al. 2010, Blau and Winkler 2018, Boschini and Roine 2020). The legal sector has some of the largest gender gaps in leadership positions when compared to other professions, although entry levels have been at near parity for many years (NAWL 2019). At what stage in a career trajectory do gender gaps in the legal sector emerge, and why? Are gender gaps in the legal sector present around the world? If so, how have they changed over time and across countries?

Gender and the legal sector

The closing of the gender gap in legal education led to the rapid expansion of female employment in a sector that used to be only for men (e.g. Goldin 2015). Yet, gender gaps persist, particularly in some of the leading international law firms (McKinsey 2017, Rikleen 2013, Catalyst 2013, NAWL 2014, FT 2014). Features of employment in this sector, such as a clear hierarchy of ranks for the partnership track and the homogeneity of explicit criteria for promotion, make lawyers’ trajectories and performance easier to compare (Azmat and Ferrer 2017). Much of the existing evidence on gender gaps in the legal sector has focused on the US (e.g. Azmat and Ferrer 2017, Noonan et al. 2005, Wood et al. 1993).

A global perspective

In Ganguli et al. (2020), we provide new international evidence of the gender gap in career progression in the legal sector using employment records from one of the largest multinational law firms. One of the five ‘Magic Circle’ law firms headquartered in the UK, it is among the top ten largest international law firms as measured by number of lawyers employed and share of world revenue, representing an important part of the global legal workforce.

Top law firms have been establishing offices in different regions of the world in recent years with the aim of increasing their activity in these markets. Multinational law firms represent an increasingly large share of the global market. They also face similar characteristics with respect to the gender ratio along the career trajectory, with about parity at entry-level positions and an important gender imbalance skewed towards men at the highest ranks of the organisation

In addition to providing new facts about gender gaps in career dynamics for a large share of the global legal workforce, examining employees from one firm working across many countries allows us to see whether cross-country differences in institutions and culture contribute to gender differences in mobility within the firm, similar to the approach in the seminal work of Hofstede (1984). Moreover, by focusing on employees within one firm, the possibility of one channel for gender disparities of women sorting into low paying and low growth firms does not apply, as all the lawyers in the firm work full-time and are expected to pursue the same career path.

We create a panel dataset of 6,585 lawyers who worked at any of the firm’s offices in 23 countries at different levels of development during the period 2003-2011. The dataset includes lawyers’ demographic characteristics and detailed information on career trajectories; it is linked to country-level indices measuring cultural values and institutional settings such as the World Economic Forum’s Global Gender Gap Index (WEF-GGI) and its sub-index on political empowerment, the World Values Survey (WVS), and other indicators that measure the position of women in society, including the female-male ratio of enrolment in tertiary education, female labour force participation, and the female-male ratio of members of parliament.

Gender gaps persist at the top

We observe that the average share of women among new associates has increased in many countries and even achieved parity for the most recent cohorts. In some countries with large initial gender gaps, such as France, more females were hired in entry level positions over the years. However, no new female lawyers at the entry-level position were hired in some countries, such as Japan and Sweden, following the 2008 financial crisis.

We note that the share of women among associates increased for most countries from 2004-2011; in Poland, Belgium, the UK, Sweden, and Hong Kong, the share even reached 50% or above (Figure 1a). But a significant gender gap exists at senior positions; in 2011, only Sweden had at most 50% of female partners, while several countries had no female partners at all (Figure 1b).

Figure 1 Share of associates and partners who are women

Panel a Share of associates who are women

Panel b Share of partners who are women

What happens along the way?

This fact – closing the gender gap at entry levels and persistent gender gap at senior levels – is notable. At the entry-level, the gap has disappeared. What happens along the way? We estimate the probability of promotion and exit at each career stage, allowing us to test for significant differences in the probabilities of each outcome for men and women. We find a promotion gender gap in most countries: men are more likely than women to be promoted, except in the UK, Hong Kong, and Japan. The gender gap in promotion probability is smaller at the highest promotion level, i.e. from managing associate to partner. We did not find evidence of significant changes over the period in any of the countries in the sample. We also estimate the probability of exiting the firm, but did not find a significant difference between men and women exiting in any countries except Germany and Spain. However, the reasons men and women reported for leaving the firm differed: while women were more likely to be ‘pulled sideways’ and leave for family reasons, men were more likely to be ‘pulled up’ and leave for career reasons such as promotions (Figure 2).

Figure 2 Reason for leaving the firm along the career trajectory

Panel a Associates

Panel b Managing associates

Note: ‘Pulled Up’ refers to leaving the law firm for career advancement; ‘Pulled Sideways (Career)’ refers to leaving for a position at an equivalent rank than the current one; ‘Pulled Sideways (Family/Lifestyle)’ refers to leaving the firm for family related reasons; ‘Pulled Down’ refers to leaving the firm for a position lower than the current one; ‘Pushed Out’ refers to leaving the firm due to contract termination, and ‘Other’ refers to other reasons for leaving the law firm.

Cross-country differences: Gender norms and culture

Similar to Fernandez and Fogli (2009), we estimate regressions for promotion, exit, wages, and ratings, where we interact female dummies with country fixed effects. These estimates suggest that even within the same global law firm, there are differences across countries in the promotion of women relative to men, as well as in ratings and wages, that are unexplained by worker and job characteristics. While these estimates show that cross-country differences exist, they do not help us understand where the differences come from.

We examine one potential reason for these differences: gender norms and culture. Looking at the relationship between outcomes of men and women (i.e. the likelihood of promotion and exit, wages and ratings) and various measures of national institutions and culture (e.g. indices using WEF, WVS, and additional indicators) we show that part of this gap appears to be attributable to differences in the prevailing preferences and beliefs about women’s role in society, or national culture. Future research is needed to examine the mechanisms through which culture matters; for example, cultural values can impact women’s own career decisions and efforts, or the working environment characterised by biased performance ratings, or lack of a culture allowing women to combine family and work.

References

Azmat, G and R Ferrer (2017), “Gender Gaps in Performance: Evidence from Young Lawyers”, Journal of Political Economy, 125(5): 1306-1355.

Bertrand M, C Goldin and L Katz, L (2010), “Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors”, American Economic Journal: Applied Economics, 2: 228-255.

Blau, F D and A Winkler (2018), The Economics of Women, Men, and Work, 8th edition, Oxford University Press.

Boschini, A and J Roine (2020), “The Share of Women in Top Incomes”, VoxEU.org, 29 January.

Catalyst (2013), Catalyst Quick Take: Women in Law in the U.S., New York, NY: Catalyst.

Fernandez, R and A Fogli (2009), “Culture: An Empirical Investigation of Beliefs, Work, and Fertility”, American Economic Journal: Macroeconomics, 1(1): 146-177.

Ganguli, I, R Hausmann and M Viarengo M (2020), “Gender Differences in Professional Career Dynamics: New Evidence from a Global Law Firm”, Harvard CID Faculty Working Paper No. 378.

Goldin, C (2015), “A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings”, Human Capital in History: The American Record, Chicago, IL: University of Chicago Press.

Hofstede, G H (1984), Culture's Consequences: International differences in Work-Related Values, New York, NY: SAGE Publications.

McKinsey (2017), Women in Law Firms, McKinsey Publication.

National Association Of Women Lawyers (2014), 2014 Eighth Annual National Survey on Retention and Promotion of Women in Law Firms, Chicago, IL: The NAWL Foundation.

NAWL (2019), National Association of Women Lawyers - Survey Report on the Promotion and Retention of Women in Law Firms.

Noonan, M C, M E Corcoran and P N Courant (2005), “Pay Differences Among the Highly Trained: Cohort Differences in the Sex Gap in Lawyers’ Earnings”, Social Forces 84(2): 853-872.

Rikleen, L S (2013), “Solving the Law Firm Gender Gap Problem”, Harvard Business Review, 20 August.

The Times (2014), “Top Law Firms committed to Closing the Gender Gap”, 22 May 22.

Wood, R G, M E Corcoran and P N Courant (1993), “Pay Differences among the Highly Paid: The Male-Female Earnings Gap in Lawyers’ Salaries”, Journal of Labor Economics, 11(3): 417–441.

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Topics:  Gender Labour markets

Tags:  women, law, legal profession, gender inequality

Associate Professor of Economics, University of Massachusetts Amherst; Associate Director, Computational Social Science Institute

Director of Harvard's Center for International Development

Associate Professor, Department of Economics at the Graduate Institute of International and Development Studies, Geneva

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