April 07, 2006
Women & Tournament Compensation
Posted by Christine Hurt

ProfB had an interesting TCS column yesterday on female partners, law firms, and tournament compensation.  The thesis is that fewer women stick around to make partner at law firms because women, on average, do not prefer "the tournament" where players "eat what they kill."  I think these phenomena are separate, though.  The tournament for racking up billables is one thing; a compensation system based on eating what one kills is another.  Some firms have this compensation system for partners, but some don't.  Some even have this system for associates. 

I was never put off by the tournament of billables.  ProfB hypothesizes that women are more risk-averse and so may opt out of that system.  However, the downside or risk of the tournament is quite low.  Most firms that utilize the tournament also pay extremely well.  So, if you don't make partner after how ever many years, you do have a lot of money to show for it.  Of course, you have to find another place to work.  However, most firms with the fiercest tournaments tend to be the most prestigious.  I can say that everyone that I knew that left my Skadden office because they were tired of waiting to be made partner left to be a partner at another, fine firm.  That being said, there is some substantial risk for those with an opportunity cost that is nonmonetary.  For example, I have heard many moms express regret at having stayed in the tournament, sacrificing time at home, only to not make partner.

As for the "eat what you kill" compensation system, that thesis does resonate with me.  I was always put off during interviews when I was told that associate compensation was based on that structure.  Not because I hate competition, though.  I hate being compensated on a system that I believe is random.  I couldn't quite believe that as an associate I would have much power over what I would be allowed to "kill."  I also didn't think I would like the environment that such a system would create.  If you're going to spend all your time somewhere, it might as well be pleasant.  Now, I think that an empricial study would be possible here -- determine whether firms with eat what you kill compensation structures attract women associates in the same percentages.  Of course, as I'm writing this, I remember the only conversation I ever had with someone who wished that she had gone to work for a "commission-based" law firm (Windle Turley in Dallas).  She was a woman with twin babies.

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