Fixing inequity in big M&A deals

The number of women leading large M&A deals has remained stagnant over the previous several years. The key to changing that, according to prominent female M&A attorneys, isn’t just about leadership positions, but how matters are staffed and how client relations are managed and handed off.

Chicken or egg: The mentor conundrum

You don’t need to be a woman to mentor a woman, just as you don’t need to be a man to mentor a man. Many of the attorneys interviewed for this piece had both men and women mentors who helped them get to where they are.

But navigating the years it takes to move from a first-year associate tagging along on a deal team to running the show yourself has a lot of obstacles, some of which create doubt. Having someone who has walked in your shoes help with that process is invaluable, those interviewed said. 

“There are different types of mentors and they help in different ways,” said Karessa Cain, corporate partner at M&A giant Wachtell, Lipton, Rosen & Katz. “But I think it is important to have women role models, as they can set an example of what is realistic and achievable and help you find your own sense of authenticity.”

Rita O’Neill, co-head of the global private equity group at Sullivan & Cromwell, said having a strong female mentor helped her develop the confidence to, more often than not, negotiate in a room full of men. 

“I had a very strong, prominent female attorney to look up to and work with in Alison Ressler [Ressler is co-head of the firm’s global private equity group, a member of the firm’s management team and a former The American Lawyer’s Dealmaker of the Year],” O’Neill said. “When you look at the most important factors in finding role models, you look for someone who is doing what you want to do and is someone you can relate to and see how they navigate an all-male world. It gives you the presence to negotiate a room that is almost always filled with men.”

But therein lies the rub. If having a strong female mentor in a position of authority, such as the lead on a deal and the owner of a client relationship, is paramount to facilitating other women into that position, you first need to have enough women in those prominent roles. There are not. 

Data from the American Bar Association shows that by the time women reach the level of an equity partner with six or more years of experience at that level, they make up only 15% of the populace of M&A attorneys. That data was from 2014. In 2016, the percentage was 16%. In 2018, also 16%. Not a lot of movement. 

This is down from the roughly half of law school students that are women and the 40% that are women as first- or second-year associates working in M&A. By the time women reach that highest rung, where they own relationships and are the ones putting together the deal teams, there just aren’t many left. 

There’s a woman in the room

According to the attorneys interviewed for this piece, when they walk into a conference room for deal negotiations, they are often the only woman, or one of a few, in the room. 

Barbara Becker, co-chair of the mergers and acquisitions practice group at Gibson, Dunn & Crutcher, said she was often the only woman in the room making her way up the M&A ladder. It sort of became a game for her to count them. 

“Where I sat in our office, I was near the conference room, and I would always count the number of women in there,” she quipped. 

Becker now staffs her own teams, and is aware of the inequity she saw as she came up. 

“How I make up for that is in staffing my team: I often have a fully female and diverse team, even if my client isn’t. And that includes pitches. And you know what? We can still do the work.”

And there it is. While societal standards have continued to evolve, and most people want to believe their implicit bias is under control, one need only look at the persistence of various elements during a negotiation that a woman has to deal with that most men don’t. 

Multiple women interviewed for this piece reported that they still encounter interruptions, reiterations of what they just said by a man in the room and, of course, “mansplaining.” 

While not quite the feral jungle of the 1980s, or as Becker put it the “aggressive, pound-the-table” negotiations that seemed more prevalent back then and were almost exclusively populated by men, there is still a concerted effort that needs to be made by women in order to be heard in the conference room. 

“I encourage my associates to speak up,” said Elizabeth Cooper, partner in the corporate practice at Simpson Thacher & Bartlett and one of The American Lawyer’s Dealmakers of the Year in 2019. “They are sometimes hesitant, and I have seen this more with women associates. They don’t want to be wrong. I try to motivate them to be confident and affirmatively reach out to a client. That sort of initiative, we need to encourage it in all of our associates, but especially our women associates. And that goes back to working with partners who help you build skills and confidence.”

Pipeline and the broader ecosystem

Which brings us to how associates build confidence and skills. They are mentored, of course. But they also need to be given the reps to develop. And those reps can be facilitated not just by mentors, but driven by other actors in the M&A environment. 

Ann Beth Stebbins, partner at Skadden, Arps, Meagher, Slate & Flom and a 2020 The American Lawyer Dealmaker of the Year, said that development process needs to start early and continue all the way through the attorney’s career, especially if they are getting “close” to the experience level required of a first chair. 

“The client handoff often favors men,” she said. “At most firms historically the most powerful partners were white men, even here at Skadden. A lot of times the handoff is to a partner that the relationship partner feels is most like them, and thinks the client would be most comfortable with them.”

Stebbins advocated for strategic succession planning to combat this. 

“Firms should think about a mandatory succession planning that begins five years before retirement,” she said. “The existing succession process in the industry tends to favor male partners, and again, I don’t think the motives of the male partners are improper, I think they are doing what they think is best for the client. But that thought process might change if the client is able to get comfortable over a period of time [with the female partner and the prospect of her taking the relationship over from her male partner].”

Clients, their boards, and financiers play a role as well. 

“My biggest client is a private equity sponsor,” Stebbins said. “I was the second partner on a deal with them over 10 years ago, and I got very friendly with several of the investment professionals on the deal team. And lucky for me, they all progressed in their careers and three of them have now made partner at the PE firm and they have known me for 10 years. They trust me and trust my judgement and have been a great source of work for me.”

As clients’ leadership makeups change to more accurately reflect the demographic makeup of their locale and boards advocate for more diversity in their legal teams, the opportunity for women to lead deals should increase. 

“When I represented Blackstone when they entered into a partnership with Thomson Reuters for Refinitiv, I would say there were maybe four women out of the 40 people in the room,” said Cooper, of Simpson Thacher. “When we negotiated the stock exchange (London Stock Exchange’s purchase of Refinitiv from Blackstone and Thomson Reuters, where Cooper was the deal lead for Refinitiv), a third of the key group were women, which was wonderful to see.”

While client behavior, boards and the like all play a part in creating opportunity, Becker of Gibson Dunn said if you want to control your fate, have your own clients. 

“The way you get to lead your own deals is to have your own clients,” she said. “I don’t play golf, and I prefer to get home to my family rather than dine out with clients. So, I figured out how to develop relationships in a way that fits with my lifestyle. The way women can become leaders in the field is to develop clients.”