Blame the Black Box? Jones Day Bias Suit Puts Spotlight on Compensation

In her lawsuit against Jones Day, former executive compensation partner Wendy Moore aimed right at the firm’s much-discussed black box compensation structure. Moore’s complaint, filed Monday against the firm in San Francisco, alleges that Jones Day’s closed compensation system “all but ensures that female attorneys are paid less than their male counterparts.”

While it’s just one of a growing handful of pay bias lawsuits brought recently by female Big Law partners, Moore’s case stands out for blaming Jones Day’s alleged “fraternity” culture partly on its approach to compensation. The complaint cites compensation figures disclosed in a Jones Day lawyers’ government disclosure form to illustrate the firm’s alleged pay gap, asserting: “Jones Day has ensured that these disparities continue unabated by forbidding attorneys from discussing their compensation.”

Lawyers who do discuss their pay are subject to retaliation, the suit says. (Jones Day has not responded to requests for comment about the allegations.)

A 2016 study by Major, Lindsey & Africa found that partners in open compensation systems reported significantly higher compensation compared to partners in partially open and closed systems. It also found that partners in open compensation models were more likely to classify themselves as “very satisfied” than those in closed models.

“Partners [in open systems] have a greater understanding of the path they need to be on to achieve their goals, specifically their compensation goals,” said Meredith Frank, managing director at Major, Lindsey & Africa. Transparency also counteracts suspicions that decisions around compensation are being made unfairly, she added.

But transparency has its own pitfalls. Partners can compare and contrast themselves and their compensation with their colleagues, which can lead to internal disputes and arguments, Frank said.

“Ultimately those things could impact productivity and loyalty to the firm,” she said.

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