Networking Nuance and The Equity Project: How to handle conversations around origination credit

On April 25, 2023, Burford Capital and Networking Nuance co-hosted a panel and networking event to discuss how female lawyers can advance their careers by having open conversations about origination credit and by leveraging tools like The Equity Project.

The expert panel included Sophie Eyre, partner and co-head of the International Dispute Resolution Group at Bird & Bird; Jane Colston, partner at Brown Rudnick; Colin Gibson, head of dispute resolution at Fieldfisher; Monique O’Donoghue, partner at Covington & Burling; and Victoria Fox, Vice President at Burford. Tamlyn Edmonds and Kate McMahon, co-founders of Networking Nuance and partners of Edmonds Marshall McMahon, moderated the discussion.

An edited transcript of the breakfast panel session can be read below.

Kate McMahon: Many of you have spent many years in law and it struck us that you get to the point at which you are really owning your career and you think: How does money work in this firm? How does equity work in this firm? What is a lockstep? What's happening here and how do I make sure that I'm getting up there? So, this is a session that we really hope will help women look up and see the future.

We all work in different firms with different systems in each firm, and one of the parts that's really interested us is the enormous array of remuneration structures in law firms. I asked the panel this morning and they have all kindly agreed to share with us the remuneration and equity structures within their own firms. So, we can have a look across the breadth of options lest you decide one suit you better than the other.

Colin Gibson: So, a very brief whistlestop tour of remuneration at Fieldfisher. At employee level, its base salary with a bonus. When you get up to partner level, we have three grades of partner. Entry level is C equity partner which is a base salary and a discretionary bonus. B equity allows more voting rights, a base salary and a discretionary bonus. When you get into A equity, it’s scored annually and there is a heavy emphasis on origination, which I will say now we are trying to dilute. We're a firm that always needs to look for next year's work and so, origination is important to us, but so is a recognition that as we get bigger, we have so many good people working hard and that you can't just do it all on sales.

Kate McMahon: Colin, how long does it take to get from partner stage one to partner stage three as a rule? Although we know it's speeded up if you're bringing in work.

Colin Gibson: If you're some sort of wunderkind, then you could be a year or two at C, a year or two at B and then into A. But the reality is that for most people it is quite a long period. You might be two or three years at C, five years at B and then into A, so I think at a place like ours if you anticipate partnership in your mid-thirties, you're probably looking at A by mid-forties.

Jane Colston: To keep it short, I think our structure is probably very similar except only two stages rather than three. Responsibility being key. Responsibility being in essence originating work, but also doing work, being a good corporate citizen and helping the business run. In terms of how quick, again, it's all very bespoke. How do you become a net contributor? Obviously, it's taken for read that you are legally accomplished, but also can you bring in work; that you are originating.

Kate McMahon: After those very helpful answers, can I ask both of you what percentage of your partnership ends up in either the A or the equity group at any time?

Jane Colston: more are salaried partners..

Colin Gibson: Yeah, there's about a third equity in our firm and there's an entire discussion to be had about full equity with a ladder. But at the moment it’s around a third.

Sophie Eyre: By the sounds of it, we are rather different. We are equity only with salary partners being exceptional. Salary partners are usually referred to as a local partners and tend to happen overseas. We've got 31 offices and so there are local reasons why somebody might be a salary partner. But other than that, it's equity from day one and tiered the whole way up, and you can move up and down as quickly as your performance.

It is driven by, again, origination. We've got a lot of institutional clients and if you can broaden the scope of what they're doing whether or not it's within your area, then you get credit for that as well. That sits under your figures when you come into allocations to see where you should be sitting in the tiering. So, it's a bit more nuanced. We're very much on top of the soft skills. We penalize all bad behavior. We reward good behavior and that may be just not holding onto a piece of work for which you're not the right person to handle. It should go to somebody else on the network.

Kate McMahon: Sophie, I think when we were having a discussion, we were talking about billable partner hours and Bird & Bird do something quite interesting here.

Sophie Eyre: Yes, we don't really have billable partner hours at all. A partner that did zero hours would be interesting; I don't think we want them to go quite that low. But you could have somebody who has got fantastic client relationships, who is working those relationships the whole time with people in other offices or other sectors and producing $5 million in revenue and will get very handsomely awarded without having to pick up a pen.

Kate McMahon: And how many rungs are there?

Sophie Eyre: It's tier points, and the entry level is three and the top 68. So, you can move up and down through those and every point carries a value.

Kate McMahon: And who decides where if you move up and down? Is that a committee piece?

Sophie Eyre: That ultimately sits with the international allocations committee. The heads of department make their recommendations, then the heads of country make their recommendations and then it goes to the allocations committee. Then together with the CEO recommendations, the allocations committee come up with a way of working it out. There's a lot of discussion about it, but we're 390 partners, so it does take a little bit time.

The partners generally know the sorts of things the committees have to hear. People might get surprised because they've gone up higher. They think they might get bonus points for one year for doing something particularly good and they might be disappointed if they move down, but I don't think anyone's really that surprised when it happens really.

Monique Mendez O’Donoghue: I think we're more in line with Sophie's structure. We are also an all equity partnership. The track to that formally is eight years because we have an all equity partnership. Our evaluation system is very formal. When you're five years in, you enter what we call the senior process. You get evaluations for all of your time at the firm and you get a formal message from the management committee. Even in situations where the practice group thinks someone's great, but management doesn't see a business case for the person, that will come out in the message. You don't have to have any originations to make partner, you just have to do good work. But I think you have to play in the sandbox well in order for there to be a path to partnership.

The formal track is supposed to be three years; however we realize now that that's sometimes not enough time for someone to be fully cooked. So, you can remain as an associate, or you can move to Special Counsel or Of Counsel. But those aren't really considered steppingstones to partnership. If you're a Special Counsel, it could be that you're in a niche area. We have a large regulatory practice, and it could be that we need someone to have a very specific skillset, but we see those as long-term careers at the firm. Of Counsel ranks I think are more akin to what you would have as a non-equity partner at other firms. Those are salaried with a bonus. And we do have people that after a period of time will request to be considered for partnership. But once you are Special Counsel or Of Counsel, you are formally out of what we would consider the partnership track interest.

How are we paid? We are given allocated shares and shares are reallocated every two years. But what you get based on the share price for that fiscal year isn't determinative of your entire compensation. We have a discretionary amount that the management committee allocates at the end of the year. And that takes into account things like Sophie said, which is all the contributions you make to the firm that aren't billable.

We also have the billable requirement for partners. Generally, the expectation is that for a partner their entire core hours would be 2,400, that is a range and includes billable and non-billable hours. Again, litigators and dealmakers are generally busy. For regulatory practices, the nature of that work is different and so they don't hit the same benchmarks that our corporate and litigation teams hit. So, there's no benchmark. It's your shares and then you get discretionary fund amounts. The share allocation is public. Because it's every two years and everyone sees the shares, you're allowed to comment on it.

We're generally told is that it's rare for someone to advocate for themselves, but it's more frequent that someone will say, I think this other person in my team deserves more shares than they've been given.

Colin Gibson: You said something interesting last week about it being a good system, but it requires a high degree of trust in your management to get there. Can you talk about that?

Monique Mendez O’Donoghue:  As I said, the way our compensation works is that we have shares and the shares are given a value and that gives you a certain amount of your compensation. Now while we don't have origination credits, we still have to advocate for ourselves. At the end of our fiscal year in August, all partners are required to give an activity report and that is where you say, I got a new instruction from this client, or I fostered this new relationship. So, you're still advocating for yourself, and you have to get comfortable with tooting your own horn.

But then it's out of our hands, it goes to the management committee, and we have to trust that they're making the right decisions. Because that's the culture of the firm and when you come up through the ranks that's the way that it's managed, so it becomes part of what we're used to being at the firm through many years. I think laterals coming in have a hard time with that process because there's no mathematical calculation based on your origination credit.

Kate McMahon: When you're going for equity or when you're just going for a raise, how are you keeping track of why you deserve it during the year? Because we all know when August is coming round, you're sitting down going: What have I done? Why do I deserve it?

Monique Mendez O’Donoghue: It's interesting, and I tell associates this also for evaluations. Whatever your evaluation system is, I say at the beginning of the year open a document and every time you're working on a matter, note what you do on that matter. When I was an associate, I would literally run a report and then go through every matter and try to figure out what I did. It's the same system, which is open a document at the beginning of the fiscal year and track what you're doing.

Sophie Eyre: You should also track if you flicked a matter on to somebody else because that's the easiest thing to forget. If in January, you get an email and you're busy and you forwarded it on to somebody who can do IP. You forget about it, and you don't even know what they've generated on it.

Kate McMahon: That's a good idea. Any other top tips?

Jane Colston: Certainly, the form that you have to fill in to claim your compensation every year t is auto filled. So, it's a good aid memoire as to what you did to the last year. It may be just more of the same or with slight tweaks. I think that form does the job of tracking for me already without having to keep a separate word document.

Colin Gibson: I’ve said to people in the room, exactly as Monique says, to track what you're doing. It doesn't have to be elaborate; it can be a single sheet and then you can check in occasionally. Did that matter close? If it's an M&A, did it complete? If it's a litigation, how's it going? Have you billed? We also have lots of partners, some of them are erratic in their billing and reporting. Some of them are unbelievably good. You should take control.

Kate McMahon: We have heard from women in firms who have really found arguments about origination credit to be a whole another level of anxiety. For example, when you say I brought this case in or I brought this client in and someone else pops up and says, actually I deserve origination credit because I met them in 1976 and we went to a football game together or something. I would love to ask the panel, have you seen these origination credit issues and how do you advise women to deal with them?

Jane Colston: If anyone said you've got to run a marathon in two hours and one minute, all of us would say, “I'm sorry, I just can't do that.” I think probably most people would naturally think I don't want to have an argument. So, I would reframe that to say I'm a litigator and if I can't have difficult and challenging conversations, then I probably need to change my job. So yes, those conversations are sometimes difficult. They're sometimes challenging, but I don't think I'd frame them as arguments and going in as if I'm now going to have to argue; I'm now going to have to go to war. I'd reframe all of that language in my mind.

Further discussions are useful to say, I think for the following reasons, as Monique said, either someone else deserves more or that I deserve more. I've often asked “How have you reached that conclusion? Tell me more about that.” I just want to understand how you got to your number. In short, I reframe in my own mind that it's not an argument, it's a fact-finding discussion where you put forward your view. Yes, they can be difficult or challenging, but that's not the reason not to do it. We walk towards challenge; we don't walk away from it. Otherwise, we would not be litigators able to deal with challenging discussions.

Colin Gibson: I agree with that. I think it's incumbent on the more senior people involved very early on to start the conversation and make sure it's an open conversation. But if you do have to get into a discussion about sharing credit, you should send a very open email. Not walking into an argument but opening a discussion with a colleague I think is important.

If you're more junior, you're probably going to want to check in with a mentor or a senior partner and say, “How would you go about this?” It’s horrible for men too, it's not just horrible for women. I speak to a lot of men who are unbelievably anxious because you're scored on origination credit. But I agree with what you say, you've got to do it. The most soul-destroying thing would be to be held back because you're not opening the conversation. You've got to open it in a sensible way.

Kate McMahon: Would you seek out an ally if you had to have this difficult conversation?

Sophie Eyre: Particularly if you're more junior, I would certainly take some sounding boards from people, but you don't want to create camps because again, that's divisive. We do have committees that ultimately sort these things out. But there's no harm in saying, I was a major contributor. I might not have brought Coca Cola across the line singlehandedly, but without my 20% it wouldn't have come in. There's always room for an interplay.

Jane Colston: I wouldn't be fearful about speaking to people in your management. Sometimes going to your mentor is a good place to start. But I'd also say speak to the people that are on the compensation committee or on the management committee making these decisions. After all, anyone that's in the position of management is there to serve their partners and to serve the people that work in the firm. Why shouldn't each and every one of you say to the people on the board who are making the decisions: “Can I sit down with you to understand a bit more”, either whether your agenda is to challenge what has been done this year or to understand more for the next year.

It might be corrected the following year because sometimes nothing can be done, and decisions have been made. There is a process that the firm has to roll forward and move on. But all of these things are fact finding. As Kate said at the beginning, you have to take control of your career. You should have these conversations to fact find, to say I want to understand more and also to raise matters with the management committee. They're there to serve you after all.

Monique Mendez O’Donoghue: We don't have origination credits, but this feeds into an important part of getting to the point at which you're having conversation about origination credit, which is that you have to be comfortable advocating for yourself. And if you want to make partner, you need to let your mentors know and you need to let the people in your practice group know that. You need to get comfortable with the conversations of, “I really want to be partner. What do I need to do to get there?” Because while we may think that others are the forefront of their minds, the partnership is very busy doing work, generating work and managing and it's not at the forefront of their mind. Early on you need to get comfortable with taking control and asking the difficult questions of what's the path forward? Is there a path forward? Is there a business case? What do I need to do to be considered? What do you think the track would be?

Kate McMahon: That all makes sense. Whilst you can be as calm and as factual as you like about how you think origination credit occurred or what you've done, do you have any tips for dealing with people who are not being sensible, not being factual and perhaps overly emotional? Because people seem to be very highly strung around money. What do you do when the other side is not particularly calm?

Sophie Eyre: It’s about getting other people involved, not quite to act as mediator, but to bring people back on side. But it's finding that balance and therefore it may be going to the management committee and having them ultimately be the deciding factor but with rational reasons and so everybody knows exactly where it's ended up and why it's ended up there.

Colin Gibson: Have you got a view on whether it is better handled via telephone or in person? Generally, I think it's picking up the phone or seeing someone in person and saying, we get along well. we shouldn't be doing this. It's hard to stay cross with someone in person.

Audience: I'm coming back into private practice after a long time out. I don’t know if this is something that happens, but do you have these kind of origination discussions before you go for a pitch? Whether it's an institutional client, you're bringing in new business or you've got a new business idea, is there ever a situation where you sit with the partners and say, “this is what I think I should be getting out of this as the percentage.” Do you ever have those conversations before the work is done?

Jane Colston: I'd say no, I haven't had that experience. It's more frequently done at the end,. Why wouldn't you say at the beginning, “look if we're doing this joint enterprise when we go in, how should we divide the credit?” But in my experience, it's an unusual way of doing it. So, I suppose you'd have to be careful how you package that.

I did a mediation training course a couple years ago and the most difficult thing was after the opening, the mediator going in and asking the room the first question because it's so loaded. So, when I was the mock mediator, I ended up having a really bland question as the first question to try and not close down the parties. So, I suppose when you are asking these very difficult things, you have to think about that first question that you're going to ask. So, it isn't “What percentage are we each going to take from this?”

Sophie Eyre: It also depends on what the pitch is. I don't know whether the others agree, but if you are doing a big pitch firmwide to Facebook for example, they want tech, data, international HR; they want every single pillar that you can offer. And you may end with two minutes on disputes. The practical reality is that you can't then flex your muscles and say thanks very much. But the quid pro quo is that when you've got a pitch that you need to do or you need to wheel somebody out with that air of specialism, you call on them. And so, I think it can be a lot more nuanced than just I was on that pitch and therefore I should get a piece.

Colin Gibson: I agree. We do a lot in the firm where you're giving up time to help because it's the right thing to do. If anyone takes away today that you've got to be hard-nosed and not help anyone, that would be a bad message. We're all agreeing you've got to do all of those things that keep the whole partnership going and moving. But the reason I was nodding enthusiastically when you spoke is that I think it's anxiety inducing, particularly if you're the more junior person waiting until the end to see what the outcome is. And that's why I'm trying to promote a bit at my firm that the more senior person at the very beginning says even if it's not cutting it and saying what the percentage is, at least says “look, shall we go and see this client together and I will share?” I think that's a positive thing to do because if in the first conversation I've said we will share, then I am incentivized not to steal the credit later.

Kate McMahon: It's very important because when it comes to your actual figures on the page, it’s easy to revert to “that's mine.” So, it's good to keep yourself in check.

Audience question: I’m just going ask the firms where origination is taken into account: Do you look at different practice areas and bear in mind that for example, repeat business in litigation is more difficult than say, for example, than in corporate relationships? How do you deal with that?

Colin Gibson: I can say we are all judged by the same yardstick in in our firm. I'm litigation and we always say the system works against us. The tax people say, well, we are rocket scientists, but we're always added on to a big corporate deal and we don't get credit for the relationship. But the reality is a single yardstick measures everyone and then there is a management overlay that does recognize areas where difference needs to be taken into account: For example, high volume, low margin compared with maybe lower volume, high margin and it's a bit black boxy, but it works.

Sophie Eyre: To add to that from our side, what's interesting is that obviously they look at the work you are doing, whether you've generated your own fees, but there's a lot of scrutiny on any work you have handed to other overseers for other groups and that is where there's quite a bit of weight added because that comes back to the collegiality as well.

Jane Colston: I'd say probably if you've chosen litigation, you like challenge. Unless you are in a firm where you're just getting repeat litigation from the same clients where you don't have to do much BD, the reality is that you have cases rather than clients. You have to constantly get that work. It takes a lot more effort to get cases in if you don't have repeat litigation clients.

Kate McMahon: Monique, origination credits are important where you are but it's not perhaps as central as some other firms. You've had experience with going to a different firm where origination credit was very highly prized. I'd be very interested if there's any differences that come with a different structure.

Monique Mendez O’Donoghue: I started my career at Covington and then left to another firm which had origination credits. I remember the credits were for client originator, matter originator and the person responsible for the matter and those were given different weights. It was a very transparent system, which I understand is often the case when you have a system with origination credits. We're not transparent at Covington because we don't have origination credits, that is probably captured somewhere I'm sure but it's not something that the partnership sees. I did find coming from a culture that was collegial and where no one was thinking about origination credits that I was ill prepared for a culture in which the credits are there. The first time I let the credit go because I assumed, well, I'll let these go this time, but someone will give me the credits when they're due and that's not how it works.

I was not yet partner at that firm. I was Of Counsel and so I went to my mentor and the head of the office, and I told him that I brought in these matters, and he gave me the advice, “Well, ask for them back. Call the person and say you brought in the work and say these need to be reallocated.” It was useful having someone who was a lifer at the firm and knew how the system worked to give me the support and I was able to copy him in the email and say, “Hey, this came in through me, can we talk about the reallocation of the credits?” You could reallocate them then, but it was a difficult conversation. But if you reach out to the mentor, to the practice group or to the office management, that's how I was able to do it.

At Covington we don't even track what white collar does versus arbitration. We don't track practice revenue across the firm. It's all really considered one international pool of funding.

Kate McMahon: Depending on where you want to go to, it's important to think carefully when you're building a career somewhere. Which type of management interests me? We've talked a lot about origination this morning, but one thing we often hear is, and this is particularly women that we've spoken to, perhaps “I don't have the circles that are referring me enormous amounts of work, or it's harder for me to find work.” But there's a million different ways to get origination credit and that is one of the things we wanted to hear from Vicky about because if you don't have clients with a lot of money necessarily, but you spot a great case and you want to fund it. If there's someone in the industry who really wants to hear from a women litigator and wants to give them money to do their cases and then can you tee that up as an origination credit? Can you give us that summary?

Victoria Fox: So here at Burford, we launched an initiative back in late 2018 called The Equity Project in response to research related to gender balance in law. You'll probably be unsurprised to hear that the vast majority of partnerships are male and those coming up through the ranks also lacked female representation. That was not withstanding that at the junior level there was a decent number of females coming through, but they weren't for whatever reason passing up the system.

The Equity Project was conceived to effectively allow female litigators and arbitration lawyers to use litigation funding capital to build books of business and to use that to their benefit to build their stature in their law firms. The fund was launched in 2018 and was initially launched with $50 million earmarked for projects led by women. The good news is that the initial pool was used very quickly and in 2021 it was expanded to an additional $100 million on top. At the same time, we expanded it to include racially diverse lawyers as well. So, it now covers that broader pool. To date we've committed over a hundred million dollars to projects of that sort, and we want to keep that pool moving and expand it.

In terms of what we look at as qualifying for that pool, 1) a female or racial diverse litigator serves as first or second chair in the matter 2) the firm representing the client is a female or minority owned firm 3) a female or racially diverse litigator received the origination credit (which plays into the discussions that we've had about origination credit for the matter or the client relationship) 4) or there's a female or racially diverse barrister who leads the advocacy on the matter.

So that covers all these BD related topics. I should say that whilst we obviously want to invest in projects of that sort, it's not a free pass to getting capital; the same investment criteria apply, we would expect the same returns, but we hope it's a means of enabling conversations within Burford, when we present our opportunities to the committee it pricks people's ears up when it's an investment of that sort, but we also hope it's something that within your private practice areas you can use to push forward that discussion as well. Who is getting these origination credits? There's this pool of capital that's available if it's a female led team and hopefully it's something that you can then discuss with your client base as well to really raise that on the agenda.

Colin Gibson: I really like what you say about barristers as well, it’s gearing us up not to just look at those same tired white guys. It is a good thing.

Victoria Fox: I remember being in private practice and you'd ask about availability of barristers, and you get a whole list of typically white male candidates. Pushing back on it and asking for some other options is important. So hopefully The Equity Project enables those sorts of discussions.

Tamlyn Edmonds: To tell you a bit more about the Networking Nuance program, we heard how important bringing work was to business origination credit. One of the things that was often asked to us over the years of mentoring women was if it's so important to bring work in, how do I do it and how do I do it authentically? We know that female professionals particularly, will only take advice from the experts i.e., people who have walked the walk. So, we decided to gather some of the most inspirational master networkers in law and other industries and asked them those burning questions that people have about business development.

We compiled all those answers and pulled it all together into a nine-week online program. It's been designed for busy female professionals so that it can be accessed online, on the go, anywhere, on your way into work or if you've got a break at work. The types of topics we've covered are things like battling networking nerves, public speaking fear, internal referrals, building confidence, how to ask for work and should you really do it and how to use LinkedIn effectively.

One of the things that we wanted to do is to make sure that we interviewed a range of people that all have very different networking styles. It's not one size fits all approach. So, the idea is that someone can find an expert that they identify with and think, could do that as well because I identify with their style. We've also created an online forum, which allows everybody that's on the course to network and to put those skills into play.