Female partners earned nearly 25 per cent less than their male colleagues at a major Toronto law firm, document shows

At one of Canada’s largest business law practices, Cassels Brock & Blackwell LLP, women who are equity partners earned nearly 25 per cent less than their male colleagues on average, a confidential document reviewed by The Globe and Mail shows. Translated into dollar figures, this means each man made an average of about $200,000 more a year.

That document, which outlines the projected income for equity partners in 2019, shows that 75 per cent of the lawyers at that level were men. (Equity partners are the lawyers who buy an ownership stake in the firm and get paid a share of the profits.) Of the 116 lawyers on the document, it appears just four were women of colour. Three of those were in the lowest earning quartile.

The Globe reviewed a second document – an e-mail written by a partner who was looking into the gender wage gap – that shows female associates were also out-earned by male colleagues, particularly when it came to bonuses. “Over 80 per cent of men got a bonus, only 44 per cent of women did,” the e-mail read.

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In a statement, Cassels’ deputy managing partner Kristin Taylor said the firm was “not able to comment extensively on highly private and confidential documents that have been shared without the permission of the firm,” but that in the past four years, Cassels has promoted 19 women to equity partner.

The internal compensation documents from Cassels are the first public glimpse into a major Canadian law firm’s pay structure. They are part of a two and a half year investigation by The Globe that has shown women continue to be outnumbered, outranked and out-earned in the modern work force. The most recent Power Gap story detailed the persistent pay equity problem in the legal profession.

“As you would expect, early-stage partners – both men and women – require time to rise up our compensation grid,” Ms. Taylor wrote. “It also is worth noting that, for the past two years, women have risen more quickly up our compensation grid than their male counterparts. In the last two years, 42.5 per cent of our partners who moved up were women, although they comprised 27 per cent of equity partners at that time.”

For years, female lawyers have lobbied for better pay transparency, but the large law firms have blocked these efforts.

In 2018, the Women Lawyers Forum (WLF), a branch of the Canadian Bar Association, attempted to conduct a study of partner compensation. But the majority of the firms were unwilling to release compensation amounts – even expressed as a percentage of total partner income.

The final report was published last October with no information on the gender wage gap. The WLF could gather only some data on partner representation – the firms that participated had an average of 49 partners, 30 per cent of whom were women – and some insights into how firms determine compensation. Just 27 (unnamed) law firms out of 65 responded to the survey.

Even internally, compensation is a closely guarded secret at big law firms. Some require a password to access the information, or allow partners to view the numbers only once. Others use a closed model in which even partners don’t have access to the full breakdown. The Seven Sisters – the business law firms regarded as the most prestigious in the country: Blakes, Davies, Goodmans, McCarthy Tétrault, Osler, Stikeman Elliott and Torys – largely use an “open compensation” model, in which partners can see what the others make. (Only Torys told The Globe it was “not in a position to comment.”) Borden Ladner Gervais LLP, Canada’s largest law firm, with almost 800 lawyers, uses a closed model.

The one constant is that those below the equity partner level are mostly in the dark about what others make. In fact, more-junior lawyers, known as associates, are often discouraged from discussing income with colleagues.

Veronica Singer, chair of the National Women Lawyers Forum, said the lack of pay transparency exacerbates the problem.

“Women lawyers don’t need data to know that there’s inequality … [but] the powers that be won’t acknowledge that there is an issue [and] we don’t have the quantitative data to show it,” she said. “If you can go to the partners [and say], ‘Why is John paid this and Jane is paid this?’ then it becomes a lot more difficult to ignore.”

According to Lexpert, a resource for lawyers, Cassels is the 15th largest firm in the country, with 250 lawyers. It is primarily based in Toronto, with smaller offices in Vancouver and Calgary.

The first document – the partner compensation figures – showed actual earnings for 2018 and projected income for 2019. In both years, equity partners earned from about $335,000 to more than $3-million. About a third of the women were concentrated in the lowest quartile in 2019. The highest-paid woman in both years was a dozen spots from the top.

During this period, Cassels appeared to make some improvements on the gender divide with respect to representation. In 2018, about 78 per cent of equity partners were men, compared with 75 per cent the next year. But the firm backslid on compensation. In 2019, the gender wage gap was about 24 per cent, up from 22 per cent the year before. (In both years, The Globe removed one individual from its calculation of the average because he earned dramatically more than the others. Including his total pay would nudge the male average higher by several percentage points.)

The Globe also reviewed an e-mail that outlined pay equity concerns at the associate level for 2018, which was written by a female partner and dated April 4, 2019. Most firms use a grid model for associate compensation, in which everyone earns the same salary based on the year they were called to the bar. Bonuses are more discretionary.

“Attached is my quick-and-dirty calculation on gender disparity in our associate compensation. Women associates make less by every metric in every year from years one through seven – including bonus alone, salary alone and total compensation,” she wrote. The exception was salaries in the sixth year after being called to the bar, “but men still lead in total compensation that year.”

The salary gap is “relatively small,” she wrote, less than 5 per cent a year, but bonuses were “a different story.”

The e-mail continued: “Over 80 per cent of men got a bonus, only 44 per cent of women did. Men took home 69 per cent of the total bonus pool given out to years one through seven.”

One lawyer at Cassels with knowledge of the firm’s efforts to address pay inequities said the issues are more complicated than the numbers suggest. On average, the women had more work interruptions – such as maternity leave – and the men were more likely to report that they had hit, or exceeded, their billing targets.

Another Cassels lawyer expanded on the issue of billing targets, adding that male associates were more likely to be put on files that generate more billable hours. This is a problem everywhere, the person said. Often these assignments are given out based on who has relationships within the firm, but the decision-makers – mostly white men – fail to account for the fact that they’re more likely to build connections with people who are like them.

The Globe is not identifying the two sources because they are not authorized to speak on behalf of the firm.

To this point, Cassels’ Ms. Taylor said: “I completely agree that senior partners assigning work to associates and junior partners who are like them has been a thorny problem in law firms. It is the reason we have implemented diversity audits and monitor work opportunities for our students and associates. It is the reason we require attendance at unconscious bias seminars. … We are trying to interrupt these patterns and recognize there is still work to do.”

This phenomenon – men being more likely to refer work to other men – also affects which lawyers are able to bring in the best and biggest clients.

Previous reporting in The Globe has shown that men are more likely to hold positions of power in public institutions and big companies, and they give their business to lawyers with whom they have relationships; relationships that may be easier to develop with people who look like, and are like, them. This is a harder problem to fix, said the second Cassels source, and one of the ways that compensation models have historically disadvantaged female lawyers. Additionally, women are more likely to be asked to take on non-billable work, and are also sometimes less able – or willing – to do after-hours networking, which often involves late-night drinking, the source said.

In Cassels’ statement, Ms. Taylor noted that the e-mail about associate pay was written by a member of the firm’s women’s practice development committee, a group dedicated to advancing gender equity. “The April 4, 2019, e-mail shows that concerns that are raised have a venue for further discussion and action. We take this self-reflection seriously.”

Cassels said it has taken steps to address systemic and unconscious inequities on gender and race. Compensation has been primarily tied to billable hours and revenue generation, but the firm has made efforts to recognize contributions such as “mentorship, corporate responsibility, leadership on committees and in management, and involvement in [equity, diversity and inclusion], pro bono and community activities,” Ms. Taylor wrote.

“Ensuring that our compensation decisions are entirely free from gender bias and creating a culture that invests in the success of our women is something we continue to strive for,” she wrote. “While we’re not yet where we need to be, we believe that we are making significant progress and that we can do better.”

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