Sued for Discrimination? No Worries!

Posted July 5th, 2017.

As It Appeared On
American Lawyer

For law firms, a discrimination suit can bring 
bad publicity—but few serious repercussions.

Vivia Chen , The Careerist

For those of us who follow gender or racial discrimination lawsuits against law firms and companies like serial dramas, this past year has been spectacular. The most high-profile case, of course, was brought by Kerrie Campbell against Chadbourne & Parke.

Claiming that she was paid unfairly as a partner, she called Chadbourne’s management an “all-male dictatorship.” Two other female partners have joined her class action since it was filed in August 2016. This spring, the firm officially ousted Campbell.

Then, just a few weeks ago, Proskauer Rose was sued for $50 million by “Jane Doe,” a partner in its Washington, D.C., office, for gender bias. (Ironically, Proskauer is representing Chadbourne in the Campbell case.)

Laden with human drama and often packed with sensational tidbits (oh, the inappropriate things partners say!), those lawsuits naturally get a ton of media attention.

But here’s the question: How much of a reputation hit do firms take as a result? Enough to lose business?

Not exactly. Though gender equality and diversity seem to top everyone’s priority list these days, being slapped with a discrimination claim has surprisingly few repercussions. Chadbourne’s legal problems didn’t scare Norton Rose Fulbright away from the merger table.

Industry insiders say clients and recruits seldom get bent out of shape over discrimination cases. “Corporations face these type of suits as well,” explains Tom Sager, E.I. du Pont de Nemours and Co.’s former general counsel, who has won accolades for promoting diversity.

Now a partner at Ballard Spahr, Sager suggests that these lawsuits are more or less routine: “Unless there’s a “compelling reason [to look into them], clients should not be in a position of sitting in judgment of their firms.”

As for having an effect on attracting lateral recruits or merger partners, these lawsuits also have limited impact. “I’d bet there’s a bunch of suits out there against big firms,” says Jeff Lowe, a managing partner of recruiting firm Major, Lindsey & Africa, alluding to disputes that are settled quietly. “What’s unusual with the Chadbourne matter is how public it’s become.” Most lateral candidates, he adds, won’t reject firms that are sued because “they see lawsuits as being part of the bundle of risks.”

But these lawsuits have a ripple effect below the surface, say those who are suing the firms. “You won’t see an effect on the bottom line, and you won’t see a noticeable shift immediately,” says Kamee Verdrager, a former Mintz Levin Cohn Ferris Glovsky and Popeo associate who sued the firm for gender discrimination. (She settled with the firm last December after a 10-year ordeal.)

Yet, Verdrager believes these lawsuits trigger firms to re-examine their business methods and change. “There’s huge gossip factor, and that affects firms internally,” she says. “Clients will ask what’s going on, and those discussions are uncomfortable and embarrassing. It’s a huge distraction.” Over time, she says, “some firms will take a more objective look at how women are paid or reviewed.”

David Sanford, the lawyer representing the women in the Chadbourne and Proskauer suits, agrees: “I would imagine part of the collateral damage is difficulty in recruiting, morale issues affecting current employees, business disruption and a negative impact on some clients.” If nothing else, he adds, “we find a positive impact often on total compensation for females after we sue.”

The way I see it, changing the hearts and minds of those in power is nice. But getting paid fairly is way sweeter.

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