Boston Bar Association

Report of the Boston Bar Association Task Force
on Professional Challenges and Family Needs

FACING THE GRAIL: Confronting the Cost of Work-Family Imbalance

BOSTON BAR ASSOCIATION TASK FORCE ON PROFESSIONAL CHALLENGES AND FAMILY NEEDS
Nancer H. Ballard, Esq. Goodwin Procter LLP Chair
COMMITTEE MEMBERS
Gregory P. Bialecki, Esq. Hill and Barlow, PC	Beth I. Z. Boland, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC
Mark L. Byers, Ph.D. Director, Office of Student Life Counseling Harvard Law School	Timothy A. Clark General Counsel Colonial Gas Company
Marcus E. Cohn, Esq. Nixon Peabody LLP	Alicia L. Downey, Esq. Bingham Dana, LLP
Virginia G. Drachman, Ph.D. Professor Department of History Tufts University	Donna M. Evans, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC
Ernest M. Haddad General Counsel and Secretary Partners HealthCare System, Inc.	Diane Kellogg, Ph.D. Associate Professor of Management Bentley College
Lawrence Kotin, Esq. Kotin, Crabtree & Strong, LLP	William F. Lee, Esq. Hale and Dorr, LLP
Francis S. Moran, Jr., Esq. Executive Director Boston Bar Association	Verna Myers, Esq. Verna Myers & Associates
Lauren Stiller Rikleen, Esq. Bowditch & Dewey, LLP President Boston Bar Association	Brooke E. Skulley, Esq. Bowditch & Dewey, LLP
Sheila M. Statlender, Ph.D. Harvard Law School	Robert E. Sullivan, Esq. Sullivan, Weinstein & McQuay, PC
H. Lawrence Tafe, III, Esq. Day, Berry & Howard	Patricia Flynn, Ph.D. Dean Graduate School of Business Bentley College Honorary Member

The Boston Bar Association gratefully acknowledges the generous support of the Boston Bar Foundation and the Merrill Corporation in publishing this report.
The Boston Bar Association and the Task Force wish to thank Goodwin, Procter & Hoar, LLP which contributed hundreds of hours of secretarial and word processing time as well as the cost of secondary research materials and the duplicating costs involved in the preparation of this Report.
The Task Force also wishes to thank all of the partners, associates, law students and other professionals who contributed their time, advice and perspectives to this project.

This report is an extraordinary documentation of the evolving nature of the practice of law, and its impact on our personal and family lives. It applies to all of us in this profession. This point must be emphasized because it is easy to read this document and feel complacent about how one's own law firm is addressing these issues.

These are difficult times in the legal profession. The demand for billable hours has increased significantly over the past decade, at the same time that the opportunities for partnership admission have narrowed. We are in danger of seeing law firms evolve into institutions where only those who have no family responsibilities -- or, worse, are willing to abandon those responsibilities -- can thrive. This is not an exaggerated perspective; it is a description of where many think we are heading, and where others think we have already arrived.

Throughout this year, I have spoken with young associates and senior partners about the work of our Task Force. The comments I received demonstrate a significant lack of communication. Most senior managers in law firms will tell you that the profession is troubled, but that their own law firm is grappling with these problems well. Most young attorneys contribute to that perception by failing to state within their own law firms the perceptions that they are willing to share with outsiders: that their firms are not addressing these issues in a meaningful way, and that their firms' inability to offer an acceptable balance between work demands and family needs leads them to question their own future in the profession.

This discrepancy between what firm owners and managers see as the truth and what associates experience, must be addressed. Firms need to develop mechanisms for lawyers to speak openly and honestly -- and even critically -- about these issues. The lack of open and honest communication between partners and associates, and even among young partners themselves, is a contributing factor to the difficulty in solving issues relating to law firm culture and its implications for how lawyers are able to live their lives.

This change must come from all of us, but lasting change requires a long-term commitment from the top. Firms must understand that law firm culture emanates from the managing partner and the management committee. Without full support at the most senior levels of a law firm to address these issues, there can be no change.

It is also critical for lawyers to understand that this is not simply a large law firm problem. Smaller firms, even those created by large firm émigrés, are capable of creating the same pressures on their associates as are the big firms. The reasons may be different, but the pressures are just as real and are confounded by the fact that there are fewer people with whom to communicate.

These are issues that will not diminish over time. Within the social context of our nation, we are seeing a rising demand for more family time. The literature addressing the problems of the time famine in our society and its impact on families is growing, and it is incumbent upon all of us to take a hard look at our own family-work balance to determine how we are handling this difficult issue.

The Task Force appreciates that no one report will solve this problem. We hope to contribute to the debate and encourage each law firm to address this issue in a meaningful way. Much is at stake.

I wish to express my profound appreciation to the members of this Task Force, who gave so much of their own personal time and energy to grapple with this problem over the past many months. The Task Force consisted of an amazing group of talented professionals, who share in common a commitment to improving our profession for the lives of our families. Words are insufficient to express our gratitude to Nancer Ballard, who spent countless hours synthesizing diverse perspectives and helping to create a cohesive and compelling report. This would not be the thoughtful, well-documented report it is without her contributions.

Appreciation is also due to the Boston Bar Association for its willingness to establish and support this Task Force. The BBA has long been on the cutting edge of critical issues in our profession, and this is no exception. Its foresight, commitment, and dedication to the issues raised in this report should be commended. Finally, the profession, itself, should be commended for its introspection, candor, and willingness to look internally and asks the difficult questions in order to create a better future. For all our flaws and difficulties, this is still a profession in which we can all take a great deal of pride. I shall always be grateful for the opportunity to have formed this Task Force, and to have worked with such a caring and dedicated group of people.

The legal profession, and private law firms in particular, are on a collision course in which the pursuit of objectified measures of success is colliding with lawyers' and their families' needs for meaningful participation in families' daily lives. On the one hand, single-minded devotion to the workplace, one's clients, and revenue production is viewed as the key to success. On the other hand, non-workplace relationships which provide meaning and satisfaction require ongoing attention, care, and engagement. The convergence of these goals is at the core of work-family conflict. It is found in law firms of all sizes. Law students, associates, partners, and law firm management all contribute to, and are affected by, this dynamic. Most significantly, the culture and organizational structures of many private law firms exacerbate work-family conflicts and make lasting solutions difficult to implement and sustain.

Law firm organizations belong to lawyers. Lawyers' careers' belong to lawyers. The power to change our workplaces and our lives belongs to us. It will take self-examination and commitment to take the necessary steps to address work-family conflict on an individual and organizational level. Some of the first steps are apparent; others will not become apparent until the first steps are taken.

RECOMMENDATIONS OF THE TASK FORCE ON PROFESSIONAL CHALLENGES AND FAMILY NEEDS

In the past twenty years, enormous changes have taken place within the legal profession and in Americans' attitudes and patterns of behavior with respect to work and family. These changes have pulled the legal profession in two directions. First, women have entered the work force in large numbers, leading to an evolution in attitudes and expectations about parenting and paid work that is less gender identified. Increasingly, both women and men consistently state that they want rewarding careers and meaningful participation in the daily lives of their families. Men, as well as women, are making career and employment decisions based on their desires for family involvement. Second, increases in the size of urban law firms, changes in the nature of attorney-client relationships, the increased complexity of large transactions and mega-litigation, and advances in technology, have led to a law firm environment that is more competitive, more focused on the bottom line, and more status sensitive.

The convergence of these dynamics has brought tremendous stress and distress to the lives of lawyers and their families. In 1997, the Boston Bar Association convened a Task Force on Professional Fulfillment to examine the barriers to career satisfaction in the legal profession. The difficulties of balancing home life, work life and community service topped its list of concerns. These concerns have been confirmed by the 1998 NALP Foundation for Research and Education Report on associate attrition rates, and by numerous other national and regional bar association studies, researchers, writers and practitioners.¹

In 1998, Boston Bar Association President Lauren Stiller Rikleen assembled the Task Force on "Professional Challenges and Family Needs" to examine the interface between law firm environments and family needs. In the course of listening to hundreds of lawyers and reading and discussing a mountain of articles on the subjects of professional satisfaction and family-work ² balance, two inconsistent but related images emerged. The first is a vision of success that is oriented around revenue production, hours, competition, and the pursuit of esteem. The second is an image that is based on the people in lawyers' lives and the evolving nature of their relationships with colleagues, clients, families and communities. The first goal of this Task Force has been to articulate the complexities of these two dynamics and how they affect work-family decision-making and experience. The Task Force's second goal is to identify ways in which bar associations, law firms, lawyers and other professionals can address family-work conflicts.

The Task Force includes partners and associates from large, medium and small law firms in the greater Boston area, as well as corporate counsel, and government attorneys. Its members include a managing partner, partners who serve on their firms' executive boards, lawyers directly involved in firm hiring and compensation, two bar association presidents, and the former Executive Director of the Boston Law Firm Group.³ Other Task Force members include an historian from Tufts University who has studied the evolution of women's presence in the legal profession, an economist, business organization specialists, psychologists, researchers who have examined changes in work-family policies and practices in the accounting field, and representatives of Harvard Law School.

In the course of its work, the Task Force has interviewed and gathered information from law firm partners and associates, in-house counsel and other business professionals, law students, legal recruiters, career counselors who specialize in legal professionals, legal management consultants, and the Employment Issues Group of the Women's Bar Association of Massachusetts. The experiences and perspectives of clients, law students, and professionals in closely related fields were considered as well as the experiences of partners and associates in law firms of all sizes.

The Task Force also has reviewed data gathered for a broad study on part-time work that the Women's Bar Association of Massachusetts is undertaking, and interview data from a study on career meaning in the lives of women lawyers conducted at the Wellesley Centers for Women and Brandeis University. Task Force members read and discussed numerous articles and studies by bar associations, legal practitioners, social scientists, psychologists, law professors, students, business professionals and other writers. (A list of resources for further reading is attached as Appendix D.)

Section I of this Report describes the evolution of private law firms and the workplace environment in which work-family issues currently arise. Section II examines the role that economics, competition, meritocracy, and gender each play in law firm culture and family-work dynamics. Section II also examines lawyers' perceptions and experiences of part-time work arrangements. Section III distills a broad range of lawyers' perceptions and experiences bearing on work-family issues and offers a framework for examining personal and organizational decision making. Section IV provides specific examples of "best practices" which partners, associates, clients, and professionals in related fields have found helpful in broadening work-family options, and contains proposals for future initiatives.

In the course of its work, the Task Force found that people's actual experiences regarding professional and family issues are usually more complex and more compelling than abstract discussion. In order to assist the legal community in considering the interplay of various workplace dynamics from multiple perspectives, the Task Force has developed a number of discussion questionnaires and vignettes on subjects relating to work-family decisionmaking. These are found behind the narrative portion of this Report in Appendices B and C. The Task Force hopes that these supplemental materials will be used by law firms, law schools, bar associations, and other organizations to further articulate and engage professionals in grappling with quality of life issues. Ideally, these materials and the narrative report provide a springboard for the development of additional materials and on-going dialogue for creating and supporting professional environments in which participants can freely choose to have satisfying careers and fulfilling participation in family life.

The pace, pressures, demands and rewards in the practice of law have changed dramatically over the last thirty years. Rising competition, increased focus on the bottom line, and technology have each contributed to these changes. Thirty years ago, many, if not most, attorney-client relationships were longstanding, and characterized by trust and a deep sense of loyalty. Ongoing relationships and commitment on both sides made possible lawyers' bills that said little more than "For Services Rendered" followed by a short paragraph describing the lawyer's work and an amount. The amount was determined by the lawyer, based on the time spent on the matter, the difficulty of the case or transaction, the experience required, and most especially, results achieved in light of the client's goals. With rare exceptions, the practice of law engendered little public attention or scrutiny.

Today, the presumption that a client seeks, or will have, a single long-standing relationship with one law firm has largely disappeared. Many clients "shop" their major matters to several firms and select or reject their lawyers transaction by transaction.⁴ Rising legal costs and, often, the need to justify those costs to others, has led clients to require their lawyers to provide them with an accounting for every hour (or fraction of an hour) spent on their matters. The relationships between clients and lawyers in private practice have been transformed into a series of business transactions. Single transaction engagements enable clients to compare law firm expertise, bargain for fee discounts, and demand immediate response. This transaction-by-transaction competition also induces lawyers to offer or accept tight deadlines without regard to need or reasonableness, and encourages them to view clients as short-term revenue sources.

Legal professionals have responded to marketplace changes by focusing increased attention on the business aspects of their practices. Billable hours, fee realization, and the firm's market share in a particular practice area or city have become the benchmarks for measuring success. This focus - indeed, some would say singular focus - on the financial bottom line has sharply increased the pressure on all lawyers to generate revenue. It also has fundamentally altered the structure of many partnerships. Historically, a lawyer who had developed quality legal skills could expect to move through the ranks to partnership with much effort but little anxiety. Today, only a very few of the many first year associates hired by the larger law firms will become partners, and even their fate is driven by bottom line considerations (such as the firm's needs at the time they are considered for partnership). Historically, profits were distributed equally or based on years of service. Today, most law firm compensation systems begin with the amount of revenue generated by a partner in a particular year. In short, the pressure on partners and associates at all levels to work longer and produce more revenue has increased at the same time that long-time relationships and job security has diminished.

Other external factors have also increased pressures within the legal profession. Twenty-five years ago, there was no American Lawyer, no National Law Journal and no Court TV. Lawyers rendered their advice privately and in relative anonymity. Today, major legal cases are reported in scores of publications and the media highlights every major misstep by a firm or lawyer. There are dozens of published lists detailing and ranking firms according to revenues, firm profits, and profits per partner. In many law firms, the amount of each individual partner's compensation is distributed to all partners. Web sites detail compensation of junior, mid-level and senior associates in different firms, including associate starting salaries and signing bonuses. Lawyers and law firms throughout the world are endlessly examined and compared, increasing the pressure to perform well for the press and the public. As a result, there is even greater focus on the bottom line.

Technology, originally viewed by many as a savior, also has led to increased pressures in the practice of law. While technology promotes efficiency by allowing lawyers to accomplish a specific task in less time, it has not translated into more non-work time. Instead, technology simply allows us to do more in the same amount of time, e.g., revise a document more times, consult more people in and out of the office, search for decisions in more forums, and open new matters while on trial in another state. Technology also has created the possibility of a 24 hours per day, 7 day work week by making people and work accessible around the clock.

The challenge of integrating a legal career and parenthood is not a new one. In 1889, Lelia Josephine Robinson, the first woman admitted to the Massachusetts State Bar in 1882, wrote to the Equity Club, an organization of women law students and lawyers asking, "Is it practicable for a woman to successfully fulfill the duties of wife, mother and lawyer at the same time?"⁵ For women lawyers, marriage and parenthood have always been a central issue in their professional lives.

The problem of integrating a legal career and family responsibilities today is somewhat different than when Robinson considered the issue. First, womens' ability to plan family size and the timing of children was much more limited in 1890 than it is today. Second, when Robinson married, there were only 208 women lawyers in the entire country, compared to 9,422 men.⁶ The tiny number of women lawyers were viewed by most men as interlopers in their professional domain. Robinson and the other women lawyers of her day had to address the challenge of combining marriage, motherhood and career privately and on their own.⁷

In the 1920's a new generation of lawyers approached family-work issues with greater optimism. Women lawyers of the 1920's believed that sexual discrimination and institutional obstacles to a career in law which had been so prevalent in the late nineteenth century, were a phenomenon of the past.⁹ Crystal Eastman, the first woman admitted to the New York City Bar and a supporter of suffrage, birth control, and equal employment opportunities for women, articulated the expectations of the women of the 1920's: "I grew up confidently expecting to have a profession and earn my own living, and also confidently expecting to be married and have children. It was fifty-fifty with me. I was just as passionately determined to have children as I was to have a career."¹⁰ However, the 1920's optimism did not bring the reality that many women lawyers hoped for. Forty years later, women still represented only about 3% of the profession.¹¹

During the 1970's and 1980's, the proportion of women associates hired by major law firms steadily increased. By 1989, women made up almost fifty percent of most law school graduating classes,¹² and by the late 1980's many, if not most, major metropolitan law firms were hiring entering classes composed of 40% to 50% women.

At the same time, work-family lives in the United States, as a whole, were changing. In 1950, fewer than 13% of married mothers with children under age seventeen worked for pay; by 1994, 69% did so, and today, more than seventy percent do.¹³ The majority of families now consist of dual-career parents or full-time working single parents. Also, men are seeking greater participation in family life. Many men rate impact on family life higher than pay in choosing an employer.¹⁴ A 1996 National Institute of Mental Health study of dual-earner couples found that a close relationship with children was as important to men's mental and physical health as to women's.¹⁵

Today, many associates and partners view life as a successful lawyer as incompatible with significant child care involvement or responsibilities. In the 1980's and throughout the 1990's, law firms have experienced dramatic attrition, especially in the junior classes, and among women and minorities.¹⁶ Associates identify their firms' practices regarding the balance of law practice and life as a major factor in their decisions to stay or leave their firms.

With women representing up to 50% of incoming associate classes, and with highly talented men and women openly stating that they are interested in legal environments that offer meaningful profession and family commitments, law firms are now actively searching for policies and practices to help make ongoing solutions possible. The challenge of integrating work and family is no longer a personal individual matter; it has become a problem of the legal profession as a whole, and one the profession must resolve for the twenty-first century.

By the end of the 1970's, the complexity and cost of many corporate transactions had mushroomed. In response, companies requested that bills provide more detailed information about the work performed to ensure that they were being charged a fair price. Many clients began to insist on itemized statements describing each billed hour (broken down into quarter hours or tenths of hours) with the expectation that this would prevent injustice, improve accountability, and lower fees. The billed hour, first mandated by clients approximately twenty-five years ago, has become, in most firms, the essential predicate for all law firm economic modeling and accounting.

The generation of fees based upon the billed hour now drives almost every law firm decision. Profit-per-partner calculations, viewed by many as the sine qua non of professional success, depend on fees generated from hours worked, billed, and collected. Capital investments, employment decisions, expansion and virtually all other law firm management decisions depend upon projected revenues which are based on billable hour projections, multiplied by anticipated hourly rates.

In recent years there has been much discussion of possible alternatives to the billable hour system. For example, both clients and law firms have endorsed, in principle, the flat or "fixed" fee, citing the potential for greater efficiency. However, law firms are reluctant to offer flat fees without a significant cushion, in case the work turns out to be more complicated, adversarial or protracted than anticipated. Clients, in turn, are generally not interested in fixed fees that appear to be more expensive than hourly billed fees. Contingency fees are most attractive to law firms when they are least attractive to clients that can afford to choose among payment methods -- e.g., when it appears likely that the contingency fee will exceed the number of hours worked multiplied by the attorneys' rates. In essence, law firms do not want to risk a significant short-fall without a substantial commitment of business or a large upside potential, and clients want alternative billing methods to save legal bills, not to pay law firms more than their hourly rates.

Without an on-going relationship in which it is understood that momentary dips in the scale will be evened out, no other system provides such financial clarity to both clients and law firms as the billed hour. This makes significant movement toward an alternative system unlikely except for the most routine assignments.

A chain of circumstances that brings about a situation in which the solving of one difficulty leads to a new problem involving increased difficulty in the original situation, is called a vicious circle. Many law firms face several of these vicious circles.¹⁷ For example, in most large and medium size law firms, the firm's largest expense is associate salaries and benefits.¹⁸ Law firms seeking to hire large entering classes from a limited pool of highly qualified law school graduates have offered entering associates higher and higher salaries and signing bonuses. Increases in associate starting salaries have a ripple effect throughout the firm. Associates further up in the hierarchy expect a higher salary/bonus package than they earned the year before, and also one that is higher than associates more junior to them. Thus, when starting salaries are raised, adjustments are made throughout the associate classes. Mid-level and senior associate salaries and bonuses in many large firms now exceed the respectable partner's compensation of just a few years ago. Partners believe they deserve to earn more than associates because they have more legal experience and because they bear the burden associated with bringing in enough revenue to cover the growing salaries of associates, support staff, and rent. Thus, their compensation expectations rise.

This press for higher revenues among both associates and partners translates into pressure on everyone to work longer hours, raise their rates, and take on more work. As partners and associates work harder to generate the higher revenues, they come to expect that they will be even more highly compensated. And the cycle continues.

As attorneys' hourly rates have increased, the pool of potential clients that can afford the increased rates becomes smaller and the mix of work that is available to partners and associates is affected. For the most part, however, there have been sufficient clients willing to pay billing rate increases during good economic times to supply the hours needed to provide the revenue to maintain the cycle. Also, advances in technology have allowed law firms to offer, and clients to demand, an elevation in work product standards. Lawyers now routinely consult more reference sources, revise more drafts, and compare documents with those developed by others. Clients pay more for these additional efforts which, in turn, lead them to believe they can demand more. The cycle continues.

The need to collect enough revenue to pay rising salaries and to maintain or increase per partner compensation affects how many new partners a law firm is willing to add each year. Limiting the admission of new partners escalates inter-associate competition. One of the principal ways associates compete is by exceeding billable hours targets. The need to demonstrate exceptional dedication consumes the time for all other interests and causes professional dissatisfaction. The known narrowing of the portal to partnership, coupled with ever increasing billable hour expectations, leads to lawyer turnover, stress at all professional levels, and reduced morale. It also causes a substantial number of associates and partners to focus on their compensation as perhaps the only long-term benefit of their personal sacrifices and the only relevant measure of their current success.

In short, the increased revenue that is necessary for high associate salaries and partnership expansion leads to a demand for high billable hours, the narrowing of advancement opportunities, increased professional stress, and unprecedented financial conflict between associates and partners. Work-family balance is at the center of this conflict.

There is a strong link between an organization's economic modeling, budgeting assumptions, economic aspirations, and the firm's ability to embrace participants who wish to spend significant time involved in family and other non-revenue oriented pursuits. Economic modeling affects a lawyer's perception of profitability, and the "value" of individual participants, especially when revenues and compensation are closely tied to hours worked. This, in turn, deeply affects the availability of options regarding family-work career paths, and affects how those decisions are viewed by other members of the firm.

A firm's economic structure should flow from (and thereby support or enact) the purpose or mission of the organization. Some partners, associates, and commentators have suggested that they believe that law firms exist to provide high compensation to the partners. If this were true, the measure of a firm's success would be its profitability (in a given year or over a period of time) and the measure of a partner's success would be his or her compensation (in a given year or over time). If this were the overriding mission of private law firms, then it would make sense for each person, or at least each partner, to be focused primarily on maximizing his or her own income.¹⁹

Under a strict model of profit maximization, everyone would be encouraged to work, bill, and collect revenue for every hour of their waking lives. However, almost no one endorses or expects such behavior, even if sufficient people could be found to inhabit such a workplace. Instead, the standard for measuring commitment, contribution, and value tends to be the average or median hours being billed by the firm's attorneys. This standard has historically been set by male attorneys (who comprised more than 95% of private law firm partners and associates prior to the 1970's) in the context of an assumed lifestyle which anticipated that a lawyer would spend the bulk of his time and energy at work, and the majority of family and child care responsibility would be handled by his spouse. This standard, and the lifestyle of the attorneys on which it is based, has been self-perpetuating.²⁰

Not surprisingly, lawyers who take a larger role in parenting or other family responsibilities than the "norm" may not find the "norm" compatible with their lives. The lawyers either have to work harder than their colleagues with different lifestyles, or they have to work fewer revenue-producing hours, or they have to sacrifice non-revenue producing work-related hours (e.g., mentoring, being mentored, socializing, networking, etc.), or some combination of these.

Most firms, at least the management of most firms, do not describe their firm's principal purpose as providing a platform for high compensation to partners. Firm brochures, firm mission statements, and managing partners describe their firms' missions as "providing quality legal services," "serving clients," or performing "cutting edge," "creative," or at least, "intellectually stimulating" work, while maintaining a financially healthy organization and giving something back to the community. Even partners who believe that their firms' behavior has become mono-thematically bottom-line oriented usually assert that the firm should have a broader mission, or that they have more diverse professional interests and values. Also, as has been documented on numerous occasions, a singular focus on the bottom line does not bring career satisfaction.²¹ Men and women lawyers consistently identify intellectual challenges, relationships with colleagues, having time for family and non-work pursuits, being of service to clients, and giving back to their communities as essential elements to their career satisfaction.

Task force members, economists, and others have noted that conventional economic theory is of limited value in understanding the internal economic organization of law firms.²² Law firm economic modeling is distinct from most other businesses in several respects. Work product at larger firms tends to be more expensive than at smaller firms. On a macro level, law firms do not benefit from economies of scale. A law firm's per attorney or per partner expenses (total firm expenses divided by the number of attorney earners or partners) rise rather than fall as the size of the firm increases. Even if associate expenses are removed from the calculation, larger firms, almost without exception, have larger per attorney expenses than smaller firms.

There are several reasons why per attorney expenses at large firms exceed those at smaller firms. First, the most significant "expense" category, by far, in mid-size and large law firms is associate salaries and benefits. Reducing the number of associates theoretically reduces the law firm's revenues.²³ Second, expense decisions tend to be based on revenue predictions which are based on anticipated aggregate billable hours. Third, revenue generation, rather than profit, guides most firms' compensation systems.²⁴

Generally, law firms determine their profit on a firm-wide basis. A law firm's profit, like that of other businesses, consists of revenue minus expenses. In other words, fees collected by each of the partners are aggregated, and aggregated expenses are deducted from the aggregated revenues to determine the firm's profit.

Historically, most law firms divided profits among partners on a "per capita" basis or based on seniority. The rapid growth and increased instability of law firms in the 1970's and 1980's prompted most medium and large firms to abandon "per capita" or "lockstep seniority" compensation models in favor of models that evaluate individual partners' relative "productivity."²⁵ The details of "productivity measures" vary slightly from firm to firm, but they generally are based on the number of billed and collected hours that a partner (and the associates working on his or her matters) generates, plus some "credit" for revenues associated with new business "originated" by the partner. Thus, compensation considerations focus on a partner's revenue production.

Except in unusual circumstances, compensation formulas do not take into account the expenses associated with such revenue production. Expenses are, in effect, distributed on a "per capita" basis, while profits are distributed according to who produces the revenue. To state the issue another way: profits are distributed according to revenue production rather than profit generation.²⁶ Even in law firms which do not use a strict revenue formula to determine compensation, this model influences perceptions of value and contribution.

Compensation modeling that is focused on revenue generation subtly influences how partners treat expenses. Expenses take a back-seat to revenue generation. Any individual expense has minimal impact on a partner's compensation, because the cost is distributed among all partners. Revenue production, on the other hand, has a significant impact on one's compensation. One feels a direct economic benefit from bringing revenue into the firm either through new clients or by working additional hours.

Over time, the per capita expenses of law firms, particularly large law firms, have steadily climbed.²⁷ As charts 1-4 in Appendix A demonstrate, high per capita expenses put significant pressure on hourly rates and the number of hours an attorney must work to be perceived as "profitable" or a "contributor" to the firm. Indeed, overhead (allocated on a per capita basis) and junior associate salaries have climbed to the point where junior associates cannot work enough hours at the rates at which they can be billed to pay their own salaries and overhead. This puts additional pressure on more senior attorneys, especially if attrition has significantly reduced the number of profitable mid-level and senior associates.

Under current law firm economic modeling, each partner has an incentive to bring in and commit the firm to as many matters (particularly large matters) as possible if it appears that the time the matter will take can be billed and collected. Since large revenue producers are seen as the "most valuable" in a system focused on revenue, these "rainmakers" are likely to receive permission to hire (or to have the firm hire) additional associates to perform their work. This, in turn, increases the associate expense that all the partners must bear. Once hired, these associates must be kept busy with the large rainmaker's work or with other work, a responsibility that falls to everyone. Other partners are induced to work longer hours and bring in more revenue to keep up with their colleagues and to reduce the risk of over-hiring. This dynamic, together with large firms' practice of hiring five to ten times as many associates as will ultimately be presented as candidates for partnership, creates a tremendous force felt by everyone toward the escalation of hours and revenues.

In large firms, it is often said that the largest revenue producers leave the most "on the table" (i.e., in the firm). Indeed, this is often taken as a sign that those who have brought the most money to the firm are committed to the life and health of the firm, rather than to lining their own pockets. This is certainly a powerful message that many large producers can and do send to their partners and others at their firms. Another dynamic, however, is also at work. Decisions which lead to an increase in expenses tend to be weighted toward the needs of large revenue producers. Although satisfying large revenue producers is often viewed as crucial to firm stabilization, it can have the opposite effect.

The desire to keep large rainmakers happy can increase the dependency of other partners and the firm on the rainmaker if, as is often the case, the large revenues are associated with large expenses. For example, if a high revenue producing partner has more work than the associates in his department can handle or wants to expand a practice group, other partners tend to readily agree to hiring new associates. Few see any disadvantage as long as the large revenue producer believes he or she can keep the associates occupied. Nor is there generally any inquiry as to whether the partners whose work does not lend itself to associate leverage want to increase the firm's expenses (e.g., their own per capita allocated expense) in order to generate revenue that will be distributed via the compensation system to the partner or partners that give work to the new associates. Nor are partners who wish to spend less of their time on revenue-producing activities appreciated for endorsing a proposal that may have both relative and absolute compensation disadvantages to them regardless of whether or not the new hires are profitable.²⁹

In a production-based compensation system, it is also not clear that being a member of a large or mega firm stabilizes one's income. In such a system, if one's revenue production is in a down business cycle, one's compensation goes down, thus defeating the potential "smoothing out" effect of belonging to a large partnership. Often when one's revenue production decreases, so does one's utilization of associates. However, current compensation models recognize only a loss in revenue, not a reduction in the need for an expense. A partner whose work consistently requires less associate support, or who chooses to work fewer revenue producing hours in favor of more family time, may be at a continuing economic disadvantage in choosing to work in a large or very large law firm.³⁰ When the pressure to generate high revenue so as to be viewed as a contributor is combined with the economic disincentive to do otherwise, many partners conclude that family-work balance goals are beyond their reach.

Few, if any, partners articulate their frustration or discouragement in terms of an economic micro-analysis. However, economic assumptions and modeling play a tremendous role in shaping how we perceive our own success, who we think is profitable and why, and how we relate to our colleagues, clients, and families. Even if work-family considerations are never mentioned, every major firm economic decision affects how that firm views people who want to devote substantially less than all their waking hours to revenue generation

The quest for relative standing has biased law firms toward income rather than family-work alternatives.³¹ Competition among firms plays out in several ways. First, the relative success of a firm's partners and management is generally defined by the firm's net profit (income) per partner ("NIPP").³² Second, large firms tend to meet the high starting salaries offered by the very largest firms to preserve their image as a top-tier firm. Many medium and large firms try to appear as economically successful as the largest of firms to their clients, the community, and the law schools where they compete for lawyers. As a result, expenses which the very largest firms readily can sustain are incurred by firms for which it is more of a struggle. In the end, these factors all contribute to a culture where work levels in excess of 2000 billable hours a year are viewed as necessary to the success of firms and the advancement of young lawyers.

By defining success according to the firm's NIPP, and comparing the firm's NIPP to that of other similar firms, short term economic issues become paramount. What is the firm's NIPP this year compared to last year and compared to the other firms with whom we want to be competitive? What are this year's starting salaries? How did we do in recruiting? How many associates are partner candidates this year and will they have a positive or negative effect on NIPP? When a firms' relative economic standing is perceived to be the benchmark for success, even very favorable economic climates offer only momentary comfort. People and organizations moving very fast at the same rate appear stationary when they are measured against each other.

Several task force members from successful smaller firms proposed that firms consider another way of analyzing the economics of lawyering. Since, as a general rule, the per attorney overhead expenses at large and medium size firms represent approximately 1000 billable hours of junior attorneys' time, associates must bill at least 1000 hours to meet non-salary expense, and another 1000-1200 hours to pay their own compensation before they contribute any profit to the firm or increase the NIPP. (See Appendix A, Charts 1-4 for an analysis of the hours required to pay overhead and compensation at typical large and medium size firms). A number of firms, however, are now focused on identifying the expenses that specific attorneys must incur to serve clients in the information age. Suppose, for example, telecommuting and computer research could reduce overhead for some lawyers by the equivalent of 400 hours. This savings would allow an attorney to substantially reduce the number of his or her billable hours and, at the same time, bring more profit into the firm.

It has been widely noted that large law firms attract a disproportionately high number of people who have long been successful in competitive situations and who bring to firms a continued drive to succeed. However, the breadth and depth of competition among associates, among partners, and among firms has increased palpably in the last twenty-five to thirty years -- to the point that partners in large law firms have been characterized as "practitioners who have made their way to the crest of a highly Darwinian vocation."³³

Although there has always been competition among associates vying for the approval or attention of partners for whom they would like to work, such competition and its relative success as a strategy was a product of the participants' personalities. Today, competition within many law firms is driven and supported by organizational systems such as revenue-oriented evaluative compensation systems and pyramid hiring practices.

Intra-firm competition is justified (and in some cases glorified) by law firms' characterizations of themselves as meritocracies -- "with the cream rising to the top." Merit is usually couched in terms of legal skills, client responsiveness, commitment to the firm, and team-work, but at least three of those four attributes are, from the perspective of associates and many partners, correlated with long hours and sacrifices of personal and family time.

When a lifestyle that requires one to push all non-work obligations aside on a regular basis is viewed as a symbol of commitment and a sign of merit, it is difficult for associates to make different choices even if they are not interested in partnership in the immediate future. Associates report that they regularly consider the competitive effect of their possible courses of action when making decisions. They compete for the most desirable positions on the most desirable cases; they jockey for recognition of their relative contribution to positive case outcomes; they search for reasons to distance themselves from mistakes or unsatisfying outcomes; and they vie for the esteem of partners whom they do not even know but who will decide their employment fate. They evaluate themselves and each other with respect to their bonuses, the size and financial status of their cases, and errant comments in the hall made by influential partners.

Partners compete for relative compensation, the currency of esteem in a competitive environment in which high revenue production is equated with merit and success. More specifically, partners compete with each other for staffing by the most talented associates, for "client billing credits" (including long-term credit for client retention and associated revenue growth) and for recognition by their partners and the firm. As one partner observed, "There's a sense of competition or criticalness that you can't get away from. It doesn't matter where you are in the firm. And everybody has it, it's not just me... everyone has it."

Choices by lawyers to devote significant time to non-revenue producing activities can be viewed by others within the firm as failure, the inability to attract sufficient clients or work, or a lack of commitment. Several partners noted that what would have been viewed as doing fine ten years ago may be viewed as "marginal," "barely productive," or "non-performing" now. Trying to live a life that places career and family on an equal footing in a culture which is dominated by those with a different work-family lifestyle and bills itself as a meritocracy can be exhausting and disheartening.

Work-family issues are not gender specific.³⁴ The majority of working adults are or will be parents or primary caretakers during a significant portion of their working lives, and many who do not parent children will face caretaking issues with respect to their parents and/or other aging relatives. Nonetheless, restrictive family-work career paths have disproportionately adverse impacts on women's professional careers and men's family relationships.

Although many of the reasons why work-family decisions disproportionately affect women are obvious, several bear specific mention. First, in our culture, more women than men have primary responsibility for child care. In many families, there is an agreement that child care should be shared equally, but when this becomes impractical or impossible on a short-term or long-term basis, women tend to be the default child care giver. Second, women who work are judged by their peers and the larger community according to how well they parent and work, but particularly according to how devoted they seem to be to parenting. When children have problems, it is generally women who are expected to alter their professional commitments, and women are more harshly judged than men for not doing so. Third, twentieth century American culture has equated a man's success with his occupation, his status within his occupation, and his ability to provide for his family. Many men take pride in earning enough income that their wives do not have to work even when the price is not being home much. Fewer women have the prerogative or the goal of adopting a lifestyle that enables them to devote substantially all their energy to the workplace while receiving behind-the-scenes support for their careers and peace of mind regarding the care of their children.³⁵

At the same time, many men feel that the dominant law firm culture inhibits them from being able to make long-term time commitments to child care or family life. As one male former associate noted, "It is okay to say that you would like to spend more time with the kids, but it's not okay to do it, except once in a while." Men who want more family time tend to leave their firms for more compatible environments rather than to press publicly for change within their firms.

While the problem of balancing work and family affects both men and women, in private law firms the struggle is still being lived most acutely by women. Attrition among women consistently exceeds attrition among men with disparities being the most severe in the senior associate and partnership ranks.³⁶ Consequently, the percentage of women equity or shareholding partners has not increased proportionately with increases in the presence of women in the profession.³⁷

Many believe that non-economic motives drive firms' reluctance to openly embrace a panoply of work-family alternatives.³⁸ Numerous lawyers noted that influential partners who do not have children at home or whose wives who do not work for pay, seem to assume that everyone's life is (or could and should be) like their own. Several speculated that men and many women who have had lives dominated by work believe that, just as they had to choose between work and family priorities, those who follow should have to choose also. This view is often believed to be embedded in the rhetorical statement: "Everyone has to make choices; you can't have it all." Both partners and associates observed that when family-work issues are discussed, the need to "accommodate" those with work and family responsibilities is viewed as the problem rather than workplace inelasticity being viewed as a problem.

As associates move through the associate ranks, the senior associates against whom they are evaluated are, increasingly, men without child care responsibilities and women without children. For many women, their most arduous career push coincides with the running of their biological childbearing clock. Women report that critical family planning decisions often revolve around their decisions to pursue partnership or other employment opportunities. Moreover, when women decide to bear children, that decision becomes obvious as soon as she walks in the room, and the impact of that decision becomes the subject of open speculation by clients and other members of the firm. Women who seek to combine law firm careers and families also are sometimes frankly discouraged. Yet, almost no men report that they decided to postpone having children because they were coming up for partnership. It is difficult to imagine a man being told that he could have one child and be a lawyer, but that having two or more children would be "death to his career." Yet, several women reported being given such "friendly" advice.

Lawyers with significant child care responsibilities frequently note a jarring disconnect between their colleagues' perception of their lifestyles and their experience. For example, a significant number of women report being viewed as less committed to their firms or careers because they spend fewer hours in the office than colleagues without child care responsibilities.³⁹ When their law firm hours and their hours of primary child care responsibility are combined, the number of working hours that many women with children work exceeds even high law firm hours. As one woman exclaimed, "On most days I am taking care of children or commuting or working from the moment I get up until I fall in bed at night. No one would choose this if they weren't very committed."

In the late 1970's, when there were law firms insisting that one could not be a committed professional on less than a full-time plus schedule, firms began to offer "off-track" (off-partnership track) part-time options, popularly known as "mommy track" positions.⁴⁰ There followed much debate about whether such "off-track" positions were progressive or regressive (e.g., whether they offered women expanded opportunities for participation in professional careers while raising families, or whether they provided a convenient mechanism for directing women with children away from meaningful participation in law firms where they became, in effect, the at-will employees of on-track attorneys, thereby perpetuating a culture that viewed professional life as incompatible with significant child care responsibilities).

The "mommy track" debate seems to have abated. Law firms and those seeking alternatives to the traditional route to partnership have gradually and incrementally spread the alternative "track" into more of a "field" of possible alternatives. The numbers and variety of part-time arrangements have expanded to include, among others: independent contractor attorneys who choose a specific number of hours per week or month, or specific projects, and bill the firm for his/her services; attorneys "on retainer" or who are paid a flat fee for up to a specified number of hours per month; part-time associates or "of counsel" attorneys working as few as 15 or 20 hours in two days per week; part-time attorneys who work 60%-80% of full-time billable hours targets; part-time attorneys with an 80% billable and non-billable annual commitment to be worked as the attorney chooses; part-time attorneys who work a traditional five day schedule but do not work weekends unless there is a "truly life-threatening" emergency; and attorneys whose hours vary, but who work the same three or four days every week. At many of the largest law firms in Massachusetts, associates who work part-time for some or all of their careers are eligible for both junior and equity partnership. For partners, "part-time" tends to be an acknowledgment between the firm and the partner that the partner will work fewer hours than his or her colleagues and/or take on fewer matters.⁴¹

Despite the availability of reduced hours schedules, women associates and partners often believe that working fewer annual hours at their firm will be "death to my career." Men apparently do also: virtually no men formally seek a reduced schedule in order to increase their family care opportunities/responsibilities. Not surprisingly, it is painful for women and men who have been high achievers all their lives to be perceived as "not a player" or "uncommitted" for the first time in their lives, especially when this evaluation involves their career -- a major source of identity, time, and energy.⁴²

In private law firms, where hours expectations exceed those in many other occupations, the disappointment can be particularly acute. A number of attorneys working a "reduced schedule" of 70-80% report that they often work in excess of 45 hours a week. When people with "reduced hour" arrangements are viewed as less committed and valuable than their full time colleagues, they are more likely to leave their firms in search of a more compatible environment, or become less committed.⁴³

Most firms spend significant resources (both time and money) recruiting law school students. Competition by firms for the law students they perceive to be the best and the brightest is intense. In robust times, firms hire increasingly larger first-year classes, but even in tighter times firms hire many more first-year associates than have a chance at partnership in the firm.⁴⁴ The hiring calendar requires a firm to decide in the late summer or fall of one year how many first-year lawyers the firm should have in the fall of the next year, long before firms are likely to know the actual needs of various departments. Since top law school students are likely to receive offers from several firms, a firm must make many more offers than the number of people they want to hire and rely on the law of averages to bring in the correct number.

Unlike most businesses, large private law firms have an "up or out" system in which, each year, an associate is "promoted" to a higher salary and billing rate and moves one year closer to partnership, or the associate is not promoted and asked to leave. Promotion depends partly on the associate's legal skills and partly on other considerations such as the quality of the skills of other associates in the class, the needs of the firm in the associate's chosen practice area, and the likelihood that the associate will bring in new clients or new matters from existing clients. Competition and employment insecurity lead many associates to depart on their own initiative, especially if other factors such as collegial relationships, interesting work, and support for time with their families are absent.⁴⁵ The 1998 NALP study of 154 law firms involving 10,376 associates from the classes of 1988 through 1996, found that almost 10% left their firm within one year, 43% left within three years, two-thirds left within five years, and three-quarters left within seven years.⁴⁶

Associate attrition is very costly to law firms. Nearly all first and second year associates at large and many medium size firms represent, during those early years, an economic loss to the firm. Junior associates' salaries, benefits and per capita allocated overhead now exceed the billing rate that can be charged for the level of legal work most junior associates can perform, multiplied by the number of hours they can (reasonably or unreasonably) be expected to work. See Appendix A, Charts 3 and 4.

The period required for new lawyers to become profitable varies. A lawyer's ability to turn academic excellence into lawyering skills which are practical and responsive to client needs will affect the percentage of time worked by the junior lawyer that can actually be billed and collected. The nature of the practice area and work which the associate is asked to do can also be a significant factor (e.g., it is easier to recover a higher percentage of a new associate's costs if the associate is fully employed on a document production in a large commercial transaction or litigation matter, than it is if the associate's time is spent trying to understand a complex tax statute).

A number of countervailing influences limit a firm's ability to maximize the economic contribution (e.g., minimize the net loss) of junior associates. First, clients' perceptions of the relative value of work performed by the most junior associates prevents firms from raising first year rates to the point where most associates can (given their compensation and the firm's overhead) be profitable. Second, clients resent paying for what they believe to be "training time" and some major corporate clients restrict their law firms' use of junior associates.

The long-term training interests of the firm and the associate, and the associate's desire for intellectually stimulating work, also inhibit the prospects of early profitability. For example, a new associate may be most profitable (i.e., least unprofitable) working on a large document production or coordinating, assembling, and proofing corporate documents produced by others, but a steady diet of this work does not prepare the associate to take on more comp