The IPO Gender Gap

Elite transactional practice drives record-breaking profits for lawyers at top-tier law firms. Lawyers at transactional powerhouses not only stand to gain financially; they also wield significant influence over the broader economy and society. Yet, power dynamics within these firms remain largely unexamined. Over the last two decades, the proportion of women partners in law firms has risen, albeit slowly. Despite some progress, there is a dearth of research focused on specific practice areas that could reveal whether women have achieved substantial gains in the most lucrative practice areas, or if they have secured central roles within the network of lawyers specializing in those fields.

Within the subset of transactional practice, capital markets practice is an especially important and networked system. And the crème de la crème of capital markets practice is advising companies and underwriters in initial public offerings (IPOs). Lawyers representing companies and underwriters are frequently repeat players who gain substantial financial rewards and deep expertise from working on these high-profile transactions. Given the significant public visibility of IPOs, firms and lawyers often build their reputations and brands by being seen as the go-to lawyers for IPOs. IPO practice is particularly fruitful as the lawyers advising on an IPO typically proceed to advise the company on the regulatory and corporate governance complexity of being a publicly traded company. Moreover, firms and lawyers known for advising underwriters in IPOs are turned to repeatedly for advisory engagements by elite investment banks.

This Article presents the first empirical study of the gender gap within the network of lawyers leading IPO advisory work (the “IPO Attorney Network”). Analyzing thousands of lawyers across 8,358 IPOs over a 22-year period, our findings highlight persistent systemic exclusion of women. First, we uncover a dramatically persistent gender gap in the IPO Attorney Network. Our study shows that the gender gap among lawyers advising on IPOs was virtually unchanged between 2000 and 2021—that is a 22-year period with dramatic stagnation. We find a similar pattern when we examine attorneys’ network centrality: over time, far more men become highly connected lawyers in the network than women. Importantly, we find evidence that women in the IPO Advisory Network have inferior access to network resources—e.g., more connections to high degree individuals in the network—than men as their careers progress, suggesting the existence of persistent professional obstacles to career success and advancement. Second, we find that the gender gap differs by the type of IPO. For IPOs of Special Purpose Acquisition Companies (SPACs)—IPOs that have come under heavy criticism by both academics and investors—the gender gap is even greater. Third, we find material differences in gender representation between law firms advising the IPO market. Our study shows that the gender gap is especially pronounced at some of the most elite law firms advising on IPOs. Fourth, we find evidence that the gender gap is larger when lawyers represent underwriters—that is the elite investment banks that themselves are known for experiencing significant gender disparities. Fifth, we find no evidence of correlation between the incidence of women general counsel in an IPO and gender representation among advisory teams. Sixth, we find that geographic location matters in evaluating the gender gap, and that when representing issuers the gender gap is greater for attorneys practicing in New York than those practicing in California.

Amidst growing attacks on diversity and inclusion initiatives across various institutions, including law firms, our findings serve as a crucial warning. First, they raise doubts about the impact of decades-long diversity and inclusion practices at law firms on lowering the gender gap in transactional practice. Second, considering the slow pace of progress over almost two decades, our research suggests that abandoning all diversity and inclusion efforts could exacerbate the gender gap in transactional practice. In a profession that prides itself on fairness and equality, the current debate over law firms’ diversity practices offers a timely opportunity for leaders to develop strategies that genuinely advance opportunities for all lawyers.