Editor's note: This is an edited excerpt from an article written by Felicia Farber in the New Jersey State Bar Association's fall 2020 Women in the Profession Section newsletter. To read the newsletter, click here (login required).
In the last decade, there has been heightened awareness of gender diversity and women’s equity issues in our country. Academic institutions, health systems, businesses—including law firms—as well as other organizations have responded, hiring equity and diversity officers to work toward more inclusive environments.
Women have shattered records in recent elections and made huge strides in achieving leadership roles in both the public and private sectors, government, and judiciary. However, notwithstanding all the progress that has been made so far, gender equity statistics are still quite alarming, revealing that women remain significantly under-represented in virtually every area.
For the past 20 years approximately 50% of law school graduates in the U.S. have been women. This figure probably doesn’t raise any eyebrows until one learns that women make up only 36% of lawyers at law firms, and far fewer are found at senior levels. Indeed, 45% of women are found in non-partner roles, whereas only 22.7% are partners and 19% equity partners.
Considering that there are approximately 1.35 million lawyers in the U.S., the sharp gender differential translates to hundreds of thousands of attorneys. A 2018 survey by the National Association of Women Lawyers reveals that at the legal community’s current growth rate it would take almost a century until women became half of equity partners, and The American Lawyer has forecast that given current trends, gender parity among equity partners will not be achieved until the year 2181.
According to a recent Women in the Workplace study conducted by LeanIn.org and McKinsey & Company surveying 222 North American law firms—23 of which had more than 16,000 attorneys—women were well-represented at junior, midlevel, and senior associate levels, accounting for approximately 46% of attorneys, but radically dropped off afterwards. Indeed, the survey revealed that only 19% of equity partners were women, and women comprised only 25% of executive-leadership positions such as management committee and practice leadership.
Positive Findings for Women
Despite these grim statistics, there's substantial evidence that gender diversity at the management level enhances a company's performance, and companies with more women at the top make more money:
- According to a new study last year from S&P Global Market Intelligence, public companies with women CEOs or CFOs often were more profitable and produced better stock price performance than many of the companies that had appointed men to those roles
- AA Peterson Institute for International Economics survey of 21,980 firms from 91 countries found that having women at the C-Suite level correlates to a significant increase in net margins. Evidence shows that a wide-ranging set of influences at the decision-making level helps make companies more profitable, innovative and respected: Diversity not just across gender but across cultures improves a company's performance.
- Women in Congress have a track record of achieving greater financial success. A study from UC Berkeley and University of Chicago found that female legislators were able to bring back $49 million more for their districts on an annual basis, compared to their male counterparts.
- Women-owned businesses (owned, operated and controlled by one or more women) in the United States are highly successful:
- More than 12.3 million firms are owned by women, employ approximately 9.2 million people, and generated $1.8 trillion in sales as of 2018.
- One in five firms with revenue of $1 million or more is woman-owned.
- Women-owned firms (51% or more) account for 40% of all privately-held firms and contribute 8% of employment and 4.3% of revenues.37
Ironically, companies spend countless dollars on consultants, advertisers, promoters, marketing experts and PR firms to boost their profitability and increase their bottom line when studies and statistics seem to suggest that the “secret” ingredient they’re missing is more women.