The opinion of the court was delivered by: CLARENCE C. NEWCOMER
After an eight day trial tried to both bench and jury on November 29-December 8, 1993, and after considering the testimony of the witnesses, the admitted exhibits and the arguments of counsel, the court makes the following findings of facts and conclusions of law.
1. Plaintiff Ellen Masterson is a 1983 graduate of Villanova University Law School. Following her graduation from law school plaintiff clerked for Justice James T. McDermott of the Pennsylvania Supreme Court for approximately fourteen months.
2. Defendant LaBrum and Doak is a partnership engaged in the practice of law. It has offices in Philadelphia, Norristown, Bethlehem, New York and New Jersey.
3. LaBrum and Doak has a five member Executive Committee that is responsible for much of the operation of the firm and carries substantial influence with the partnership as a whole. Some matters within the firm may be resolved solely by the Executive Committee while others require a vote of the entire partnership.
5. In late 1989 and into 1990 Messrs. Ryan and Bechtle agreed with the firm that they would gradually remove themselves from the active management of the firm. Since January 1, 1992, Mr. Estrin has been the Chairman of the Executive Committee and James Hausch has been the firm's Administrative Partner. These two share the duties that Mr. Ryan once performed alone as Managing Partner.
6. Ellen Masterson was hired by LaBrum and Doak in December of 1984. Plaintiff began working in the firm's asbestos litigation department under the supervision of a partner, John Ledwith. Plaintiff continued to work in the asbestos department for approximately one year until the firm lost its principal asbestos client who produced annual billings in excess of two million dollars.
7. Seven to nine other associates worked in the asbestos department at the time plaintiff did.
8. After the asbestos client left the firm the associates in the asbestos department began to work in other departments of the firm. Plaintiff continued to work for Mr. Ledwith. Plaintiff's work for Mr. Ledwith was in the field of general negligence defense litigation, with some exposure to specialized cases (such as architectural liability).
9. In the fall of 1990 plaintiff went "on her own" meaning that she began to take full responsibility for her caseload, rather than working under the supervision of a partner.
10. Plaintiff would have gone "on her own" approximately six months before she did but she was asked to continue assisting Mr. Ledwith because he found the performance of the associate hired to replace Ms. Masterson on his cases to be unsatisfactory.
11. In 1990 and 1991, though she was "on her own," plaintiff performed a substantial amount of her work on cases for a partner named John Seehousen, at his request.
12. Approximately 75 per cent of the cases plaintiff handled "on her own" were to be tried to a jury; 25 per cent were arbitration cases. In her career, plaintiff has tried five jury cases to verdict and conducted many arbitrations. She has examined and cross-examined expert witnesses in both discovery and trial depositions.
13. Plaintiff's performance was reviewed by Mr. Ledwith in 1985-1990 and by Mr. Seehousen in 1990-1992. These performance reviews rated plaintiff highly in terms of her ability as a lawyer and her relationships with clients. Ms. Masterson's performance reviews, while always strong, improved with each year she was at the firm, especially in terms of her legal abilities.
14. The firm kept data on associates' hours, billings, and receipts for each year. These hours reflected the number of hours of associate time billed to clients. Billings were the amount of money clients were charged for the associate's work, calculated by multiplying the total hours billed by an associate times the associate's hourly rate. Receipts reflected the amount of the billings that were actually collected from the clients during the year. Data reflecting hours, billings and receipts were presented to the partnership for consideration for each associate who was eligible for partnership in a given year.
15. Plaintiff consistently met or exceeded 2000 hours per year in billables, the minimum number of hours per year required for admission to partnership.
16. In 1988 LaBrum and Doak retained Hildebrandt, Inc., a management consulting firm that specialized in consulting to law firms. Hildebrandt prepared a report detailing its conclusions which report was not distributed to each partner. In late 1988 the partnership of LaBrum and Doak conducted a "retreat" at Eagle Lodge to discuss the Hildebrandt report. Charles Santangelo, a consultant from Hildebrandt, was present at the retreat. No associates from LaBrum and Doak were present.
18. The report criticized the manner in which the firm's corporate department operated and made suggestions about how the department could be improved. These criticisms and suggestions were raised at the retreat as well. The firm responded by installing Mr. Hausch, a partner, as the head of the department.
19. Other suggestions were presented at the retreat. The firm was advised to upgrade its client base so as to handle more sophisticated work for which higher rates could be charged. Related to this was the suggestion that partners should attempt to develop specialties that would enhance their marketability.
20. The firm was advised to raise its criteria for partnership and apply the criteria rigidly. It was recommended that the firm increase its partner to associate ratio.
21. The firm was also advised to concentrate more on the development of new business.
22. Traditionally, before the firm voted on the admission of new partners the Executive Committee would review the candidates eligible for partnership and then make recommendations to the entire partnership about how to vote on each candidate. These recommendations were generally followed by the partnership as a whole.
23. This procedure was followed in 1990 when four men, David Parcells, Paul Silver, Robert Coleman and Conrad Kattner, were eligible for partnership consideration. The Executive Committee recommended Mr. Parcells and Mr. Silver and did not recommend Mr. Coleman or Mr. Kattner. Mr. Parcells and Mr. Silver were elected to partnership. Mr. Kattner was a skilled lawyer but had not met the minimum billing requirement and was wrongly considered by some partners to have mishandled some cases.
24. In 1991 eight associates were eligible for partnership, seven of them for the first time and one for the second. Of the first time candidates five were male, two were female. The candidate up for the second time was male. Partnership meetings were held before the vote on the eight candidates in which the candidates were discussed and data regarding their hours, billings and receipts were presented.
25. The candidates eligible for the first time were Carl Fogelberg, Jay Gebauer, Douglas Kent, Stephen Kreglow, Ellen Masterson, Lisa Passante and Patrick Vitullo. The candidate eligible for the second time was Conrad Kattner.
26. A dispute arose among the partners about whether the number of partnerships to be offered in 1991 should be limited because of the economic conditions facing the firm. Eventually, no limitation was placed on the number of partnerships to be offered.
27. The Executive Committee was unable to reach a consensus on recommendations to be made to the entire partnership regarding the eight candidates.
28. Each member of the Executive Committee prepared a list ranking the candidates in order of preference. These lists were then compiled into one list and presented to the partnership.
29. Plaintiff was ranked eighth of the eight candidates on the list presented to the partnership.
30. Of the eight candidates for partnership in 1991 five were elected. These five, Carl Fogelberg, Jay Gebauer, Douglas Kent, Stephen Kreglow, and Patrick Vitullo, were all being considered for the first time and were all male. The two women up for the first time, Lisa Passante and Ellen Masterson, were not elected. Conrad Kattner, a male being considered for the second time, was not elected.
31. Conrad Kattner is a highly skilled attorney who concentrated on complex litigation. His work was praised by the vast majority of partners at LaBrum and Doak who had knowledge of his efforts, most notably Mr. Bechtle, who had the greatest familiarity with Mr. ...