A New Concept: Part-time Partners

Tuesday, March 2, 2010 - 01:00

Editor: Please tell our readers about your professional experience at Allen & Overy.

McLaughlin: I joined the firm in 1997 as senior counsel and made partner in 1999. When I joined the firm, there were five or six lawyers - now there are about 150 lawyers in the New York office. There are 5,000 in the firm worldwide. My professional experience has been that of taking an international law firm into the New York market, and, in my case, growing a client base primarily in Latin America, but also participating in the hiring of partners and shaping how the office should be developing in terms of integration, not only of partners within the office, but also with the overall firm.

Editor: Would you please discuss the firm's historical efforts toward achieving greater diversity?

McLaughlin: The firm has eased into integrating diversity as it has become more global. When I first joined the firm, the statistics for gender diversity were better generally than for most Wall Street firms. But as the total firm grew, especially in emerging market jurisdictions where gender diversity is less progressive, the numbers actually became more consistent overall with the New York market, reaching a kind of plateau. Gender diversity came to the forefront when Guy Berringer, who became senior partner almost 12 years ago, introduced it as one of the firm's primary values - that of respecting everyone in the workplace. The New York office has had a diversity policy with respect to hiring since I joined the firm, but a deeper commitment came about when the firm started publishing flexible working arrangements available to all. That policy addresses gender diversity, but we are also pursuing other forms of diversity. My own experience has centered on helping associates and others in the office work out flexible working programs.

Editor: Please describe the various aspects of the flexible work policies, especially the part-time partnership which allows one to work as an equity partner.

McLaughlin: The flexible working policy exists for all employees, legal as well as non-legal support staff. In order to take advantage of the flexible work policy, one needs to have the support of one's practice group and the person to whom one reports in carrying out a part-time program together with periodic reviews of one's progress. This option has been offered for quite a while in both the New York and other offices. It is very customized as is the compensation.

The part-time partnership program that was recently announced is the first time that we have identified an opportunity for a new partner to work on a part-time basis on a known track. Attorneys enter the program as salaried partners - what we call a one-point partner - and can advance to become equity partners while working part-time. For three years they remain technically non-equity partners, and all other things being equal, they will practice as part-time equity partners over the next five years. They will not be penalized in any way because they are part-time. There are two aspects that are key: (1) part-time partners can foresee advancing to the equity full-time partnership even though they are part-time when they first join the partnership, and (2) they can remain part-time equity partners for five years. If for some reason that period needs to be extended, they probably would not progress to full-time equity partnership because we have an arrangement whereby partners progress on a lock-step basis in a partnership compensation pool, gaining points for each year they participate in the pool.

Of course, there is also a restriction on how "part-time" you can be. Basically a four-day work week per year or 52 days of leave, amounting to 80 percent of the work year, are the limitations on being a part-time partner. But, compensation is paid on a pro rata basis for the time spent working. Part-time partnership provides an often-needed option for men and women to adjust their work schedules while not having their career paths diverted from their goal of full-time equity partner.

Editor: Who must approve of this part-time arrangement?

McLaughlin: Typically the managing partner, and because a lawyer works in a practice group, there may be more than one partner in the group who needs to be consulted.

Editor: There are other attributes of Allen & Overy's flexible work policies such as part-time work, job-sharing, home-working, paternity leave, etc. What percentage of attorneys in your New York office take advantage of flexible arrangements at any one time?

McLaughlin: Flexible working doesn't necessarily mean part-time. Home-working is considered flexible working, but it may be full-time. Also, job-sharing may or may not be part-time. These arrangements are compensated usually on a percentage reduction of salary basis. In all these arrangements there are periodic updates on how successful the arrangement is. If the lawyer found, for example, that she was getting paid 80 percent but was working 100 percent of the work day, there would be a re-assessment of the pay scale.

Editor: Who monitors this?

McLaughlin: With respect to associates it would be the partner with whom they primarily work who is usually the sponsor of their part-time working arrangement.

We do this also for the non-legal staff who are monitored by the person to whom they report.

Editor: How have clients reacted to lawyers working part-time or working at home?

McLaughlin: At one point in my career I also worked remotely. My experience and experience with associates working on a flexible part-time basis or at home has never evoked a client complaint. The person who is granted the ability to work on a flex-time basis has to work quite hard to respond to clients in a timely manner. It just requires advance notice to clients and colleagues - letting people know where you are going to be at a given time, making sure that you have good technology, that you check your phone or BlackBerry, that you talk to your secretary and other associates. The client doesn't really have to know whether you are part-time or not, but only how responsive a person you are.

Editor: What focus is the firm placing on skills training for senior associates?

McLaughlin: Skills training has always had a very high priority at the firm. Our human resources staff has a development plan for each associate at every stage of development. If you are at a certain level, you undergo a certain type of training. At a junior level you do technical legal training of one to two weeks, where the associate attends "university" for your practice group. As you progress, you have other skills training, like marketing skills, managing yourself with a client and learning about the firm's business. It is an organic exercise we are always reevaluating, especially in a small office where we need local training as well as global training. We are constantly reassessing whether we are doing enough - what more can we take advantage of?

When Wim Dejonghe, our managing partner, and David Morley, our senior partner, held a partnership meeting two years ago, they made it clear that increasing the number of talented lawyers, including women, who progress in the firm is very important. While generally at least 50 per cent of the lawyers graduating from law school are women, we are not seeing them go into the partnership. How do we address this? We were concerned about how we could make earning a partnership more compatible with the lifestyle of young women as well as young men who share in the child-raising task. We were concerned about how to reach young lawyers who want to address work/life balance. That is the first phase.

The second phase is skills-training because I firmly believe that law firms are male-created institutions. The truth is that the standards that we are using for what we expect of a contributing partner are skills that some people have to be taught - instilling confidence in a client and building a book of business. Some women and some men need certain skills that don't come to them naturally in law school or through other institutions that they have passed through by the time that they arrive at a law firm. The second phase is analyzing weaknesses, observing where we are seeing the greatest challenges, particularly in the business-building aspect. I focus on the gender distinction because that is the one that is most difficult and the greatest challenges. A typical example is where there is an RFP for a position. If a man meets 50 percent of the specifications, he will go for the job on the theory he will get it while a woman has to be 95 percent sure of her qualifications. We need to encourage women to step beyond their comfort zone - this is something that can be taught.

Our client bases are changing as well. In the corporate world there is a lot of sensitivity to diversity in the workplace. When you are dealing with the general counsel, they may ask about the diversity of your team. It is a great client-marketing tool to talk to them about what issues you are facing as well and offering to share ideas.

Editor: What do you think the legal profession has achieved in developing opportunities for minorities and women? What additional efforts do you believe are needed? What are the principal barriers to minorities entering and remaining in the legal profession and how would you want them to be addressed?

McLaughlin: I think some of the on-campus recruiting that has been organized around diversity has been really effective - programs our firm participates in. Diversity programs give confidence to candidates to be open about their sexual orientation and to ask questions important to them before accepting a job. There are some specific questions that they need to have answered before they take a job, such as ones about healthcare and benefits, the employer's approach to diversity and the business environment.

With respect to women, not a lot has happened. I have been practicing for close to 22 years and have seen very little movement in the numbers. That is one of the reasons the program was instituted at our firm. I think that you have to make a more conscious effort to put women in positions of power within your institution. It is not enough to just make them partner. In order to really effectually change the power structure, women need to be heads of practice groups, managing partners, or sit on boards - as I do.

Editor: As a UK-based firm, does your drive for diversity permeate all your offices around the world?

McLaughlin: Yes, it does permeate all of our offices. As I mentioned, the concept of diversity is more than just gender. But gender diversity definitely permeates all the offices. Other types of diversity do as well, but, of course, the need for race diversity in the U.S. or the sensitivity to it is very different from the sensitivity to diversity in our office in another country. You don't have the same population of minorities in other countries as we do in the United States. Interestingly, I think that having a larger New York office has raised the profile of diversity in a different way. I think that it always existed for the firm, but we are introducing the firm to a whole other set of concerns because of where the office is physically located.

Editor: Do you have offices in countries whose culture does not recognize the equality of women?

McLaughlin: We're a global business, so we operate in many different countries with many different cultures, some of which have differing standards and approaches to equality issues. That being said, we are very careful when we move people to those offices not to eliminate them for some particular diversity reason. Someone who is Jewish and female is not going to be prohibited from having an opportunity to be in the Abu Dhabi office. I think what is most important is that you are providing the same opportunity to everybody, but you also have to be careful that you are mindful of the possibilities for business success for that person. A fine line that has to be walked is whether you are relying entirely on a business reason to exclude the minority. The best way to handle that is to have checks and balances, which our HR department reviews constantly. We had a recent restructuring of the firm reducing our personnel by approximately nine percent - partners, associates and support staff - which we did in a very transparent, public way. It was looked at very heavily for diversity to ensure that we were not making any decisions that were unfair based on any type of minority.

Please email the interviewee at cathleen.mclaughlin@allenovery.com with questions about this interview.