Sidley-Austin, the EEOC, and Unintended Consequences

Even the reader acquainted only at the most cursory level with my perspective on the increasingly professionalized management of law firms would know I endorse that trend wholeheartedly.  The question du jour is whether I endorse it without reservation.

Prompting this soul-searching is Sidley-Austin's highly publicized run-in with the EEOC over demoting 32 partners in 1999—all over 40—in order, as the management committee put it, to provide "greater opportunity for younger lawyers down the road."  The EEOC's position is that Sidley's "hyper-centralised" management under which partners almost never voted on anything means the demotees were mere "employees" and thus subject to anti-discrimination law.  Sidley-Austin retorts that they were, obviously, "partners" sharing in profit and loss and contributing capital, and thus outside the scope of anti-age (anti-sex, anti-race, anti-religion, etc.) discrimination law.

As Professor Bob Hillman of UC/Davis Law School, an expert on partnership law, puts it to the FT, "This is a big one."  Not only law firms, but accounting firms as well may be deemed partnerships in name only if the EEOC prevails.  As a securities lawyer and not a partnership or agency lawyer, I have no opinion on whether Sidley or the EEOC has the better of it, but it does present me with a dilemma.

Simply put, as a champion of professional management, I strongly favor decisive, centralized, strategically focused executive bodies.  Not for me the New England town hall model of interminable discussion in search of consensus.  (If you doubt me, just look down one post.)  But the more "hyper-centralised" management is, the more disenfranchised the rank and file partners are, which has a whiff of inhumanity to it and which—worse from the economic perspective—may leave their incentives mis-aligned with the firm's long-term best interests. 

On the other hand, we as a civilized society have developed certain protections against the ruder depradations which an omnipotent management can visit upon its underlings, anti-discrimination law primary among them.  Would I deprive these neutered partners of even that protection? 

In other words, in for a dime, in for a dollar.  If I have the courage of my (pro-professional management) convictions, do I also think Sidley should lose this case?

Yes.  I think they "should."  But, as my first-year Property professor unforgettably screamed at a naive compatriot of mine, "FAIR?!?!  What's 'FAIR' have to do with it?"