Know The Laws, Know Your Rights: Study

BOSTON — When the members of the Harvard Business School class of 2013 gathered in May to celebrate the end of their studies, there was little visible evidence of the experiment they had undergone for the last two years. As they stood amid the brick buildings named after businessmen from Morgan to Bloomberg, black-and-crimson caps and gowns united the 905 graduates into one genderless mass.

But during that week’s festivities, the Class Day speaker, a standout female student, alluded to “the frustrations of a group of people who feel ignored.” Others grumbled that another speechmaker, a former chief executive of a company in steep decline, was invited only because she was a woman. At a reception, a male student in tennis whites blurted out, as his friends laughed, that much of what had occurred at the school had “been a painful experience.”

He and his classmates had been unwitting guinea pigs in what would have once sounded like a far-fetched feminist fantasy: What if Harvard Business School gave itself a gender makeover, changing its curriculum, rules and social rituals to foster female success?

The country’s premier business training ground was trying to solve a seemingly intractable problem. Year after year, women who had arrived with the same test scores and grades as men fell behind. Attracting and retaining female professors was a losing battle; from 2006 to 2007, a third of the female junior faculty left.

Some students, like Sheryl Sandberg, class of ’95, the Facebook executive and author of “Lean In,” sailed through. Yet many Wall Street-hardened women confided that Harvard was worse than any trading floor, with first-year students divided into sections that took all their classes together and often developed the overheated dynamics of reality shows. Some male students, many with finance backgrounds, commandeered classroom discussions and hazed female students and younger faculty members, and openly ruminated on whom they would “kill, sleep with or marry” (in cruder terms). Alcohol-soaked social events could be worse.

“You weren’t supposed to talk about it in open company,” said Kathleen L. McGinn, a professor who supervised a student study that revealed the grade gap. “It was a dirty secret that wasn’t discussed.”

But in 2010, Drew Gilpin Faust, Harvard’s first female president, appointed a new dean who pledged to do far more than his predecessors to remake gender relations at the business school. He and his team tried to change how students spoke, studied and socialized. The administrators installed stenographers in the classroom to guard against biased grading, provided private coaching — for some, after every class — for untenured female professors, and even departed from the hallowed case-study method.

The dean’s ambitions extended far beyond campus, to what Dr. Faust called in an interview an “obligation to articulate values.” The school saw itself as the standard-bearer for American business. Turning around its record on women, the new administrators assured themselves, could have an untold impact at other business schools, at companies populated by Harvard alumni and in the Fortune 500, where only 21 chief executives are women. The institution would become a laboratory for studying how women speak in group settings, the links between romantic relationships and professional status, and the use of everyday measurement tools to reduce bias.

“We have to lead the way, and then lead the world in doing it,” said Frances Frei, her words suggesting the school’s sense of mission but also its self-regard. Ms. Frei, a popular professor turned administrator who had become a target of student ire, was known for the word “unapologetic,” as in: we are unapologetic about the changes we are making.

By graduation, the school had become a markedly better place for female students, according to interviews with more than 70 professors, administrators and students, who cited more women participating in class, record numbers of women winning academic awards and a much-improved environment, down to the male students drifting through the cafeteria wearing T-shirts celebrating the 50th anniversary of the admission of women. Women at the school finally felt like, “ ‘Hey, people like me are an equal part of this institution,’ ” said Rosabeth Moss Kanter, a longtime professor.

And yet even the deans pointed out that the experiment had brought unintended consequences and brand new issues. The grade gap had vaporized so fast that no one could quite say how it had happened. The interventions had prompted some students to revolt, wearing “Unapologetic” T-shirts to lacerate Ms. Frei for what they called intrusive social engineering. Twenty-seven-year-olds felt like they were “back in kindergarten or first grade,” said Sri Batchu, one of the graduating men.

Students were demanding more women on the faculty, a request the deans were struggling to fulfill. And they did not know what to do about developments like female students dressing as Playboy bunnies for parties and taking up the same sexual rating games as men. “At each turn, questions come up that we’ve never thought about before,” Nitin Nohria, the new dean, said in an interview.

The administrators had no sense of whether their lessons would last once their charges left campus. As faculty members pointed out, the more exquisitely gender-sensitive the school environment became, the less resemblance it bore to the real business world. “Are we trying to change the world 900 students at a time, or are we preparing students for the world in which they are about to go?” a female professor asked.

The Beginning

Nearly two years earlier, in the fall of 2011, Neda Navab sat in a class participation workshop, incredulous. The daughter of Iranian immigrants, Ms. Navab had been the president of her class at Columbia, advised chief executives as a McKinsey & Company consultant and trained women as entrepreneurs in Rwanda. Yet now that she had arrived at the business school at age 25, she was being taught how to raise her hand.

A second-year student, a former member of the military, stood in the front of the classroom issuing commands: Reach up assertively! No apologetic little half-waves! Ms. Navab exchanged amused glances with new friends. She had no idea that she was witnessing an assault on the school’s most urgent gender-related challenge.

Women at Harvard did fine on tests. But they lagged badly in class participation, a highly subjective measure that made up 50 percent of each final mark. Every year the same hierarchy emerged early on: investment bank and hedge fund veterans, often men, sliced through equations while others — including many women — sat frozen or spoke tentatively. The deans did not want to publicly dwell on the problem: that might make the women more self-conscious. But they lectured about respect and civility, expanded efforts like the hand-raising coaching and added stenographers in every class so professors would no longer rely on possibly biased memories of who had said what.

They rounded out the case-study method, in which professors cold-called students about a business’s predicament, with a new course called Field, which grouped students into problem-solving teams. (Gender was not the sole rationale for the course, but the deans thought the format would help.) New grading software tools let professors instantly check their calling and marking patterns by gender. One professor, Mikolaj Piskorski, summarized Mr. Nohria’s message later: “We’re going to solve it at the school level, but each of you is responsible to identify what you are doing that gets you to this point.”

Mr. Nohria, Ms. Frei and others involved in the project saw themselves as outsiders who had succeeded at the school and wanted to help others do the same. Ms. Frei, the chairwoman of the first-year curriculum, was the most vocal, with her mop of silver-brown hair and the drive of the college basketball player she had once been. “Someone says ‘no’ to me, and I just hear ‘not yet,’ ” she said.

After years of observation, administrators and professors agreed that one particular factor was torpedoing female class participation grades: women, especially single women, often felt they had to choose between academic and social success.

One night that fall, Ms. Navab, who had laughed off the hand-raising seminar, sat at an Ethiopian restaurant wondering if she had made a bad choice. Her marketing midterm exam was the next day, but she had been invited on a very business-school kind of date: a new online dating service that paired small groups of singles for drinks was testing its product. Did Ms. Navab want to come? “If I were in college, I would have said let’s do this after the midterm,” she said later.

But she wanted to meet someone soon, maybe at Harvard, which she and other students feared could be their “last chance among cream-of-the-crop-type people,” as she put it. Like other students, she had quickly discerned that her classmates tended to look at their social lives in market terms, implicitly ranking one another. And like others, she slipped into economic jargon to describe their status.

The men at the top of the heap worked in finance, drove luxury cars and advertised lavish weekend getaways on Instagram, many students observed in interviews. Some belonged to the so-called Section X, an on-again-off-again secret society of ultrawealthy, mostly male, mostly international students known for decadent parties and travel.

Women were more likely to be sized up on how they looked, Ms. Navab and others found. Many of them dressed as if Marc Jacobs were staging a photo shoot in a Technology and Operations Management class. Judging from comments from male friends about other women (“She’s kind of hot, but she’s so assertive”), Ms. Navab feared that seeming too ambitious could hurt what she half-jokingly called her “social cap,” referring to capitalization.

“I had no idea who, as a single woman, I was meant to be on campus,” she said later. Were her priorities “purely professional, were they academic, were they to start dating someone?”

As she scooped bread at the product-trial-slash-date at the Ethiopian restaurant, she realized that she had not caught the names of the men at the table. The group drank more and more. The next day she took the test hung over, her performance a “disaster,” she joked.

The deans did not know how to stop women from bartering away their academic promise in the dating marketplace, but they wanted to nudge the school in a more studious, less alcohol-drenched direction. “We cannot have it both ways,” said Youngme Moon, the dean of the M.B.A. program. “We cannot be a place that claims to be about leadership and then say we don’t care what goes on outside the classroom.”

But Harvard Business students were unusually powerful, the school’s products and also its customers, paying more than $50,000 in tuition per year. They were professionals, not undergraduates. One member of the class had played professional football; others had served in Afghanistan or had last names like Blankfein (Alexander, son of Lloyd, chief executive of Goldman Sachs). They had little knowledge of the institutional history; the deans talked less about the depressing record on women than vague concepts like “culture” and “community” and “inclusion.”

As the semester went on, many students felt increasingly baffled about the deans’ seeming desire to be involved in their lives. They resented the additional work of the Field courses, which many saw as superfluous or even a scheme to keep them too busy for partying. Students used to form their own study groups, but now the deans did it for them.

As Halloween approached, some students planned to wear costumes to class, but at the last minute Ms. Frei, who wanted to set a serious tone and head off the potential for sexy pirate costumes, sent a note out prohibiting it, provoking more eye rolls. “How much responsibility does H.B.S. have?” Laura Merritt, a co-president of the class, asked later. “Do we have school uniforms? Where do you stop?”

A few days before the end of the fall semester, Amanda Upton, an investment banking veteran, stood before most of her classmates, lecturing and quizzing them about finance. Every term just before finals, the Women’s Student Association organized a review session for each subject, led by a student who blitzed classmates through reams of material in an hour. Some of the first-years had not had a single female professor. Now Ms. Upton delivered a bravado performance, clearing up confusion about discounted cash flow and how to price bonds, tossing out Christmas candy as rewards.

Like many other women, Kate Lewis, the school newspaper editor, believed in the deans’ efforts. But she thought Ms. Upton’s turn did more to fortify the image of women than anything administrators had done. “It’s the most powerful message: this girl knows it better than all of you,” she said.

Breaking the Ice

One day in April 2012, the entire first-year class, including Brooke Boyarsky, a Texan known for cracking up her classmates with a mock PowerPoint presentation, reported to classrooms for a mandatory discussion about sexual harassment. As students soon learned, one woman had confided to faculty members that a male student she would not identify had groped her in an off-campus bar months before. Rather than dismissing the episode, the deans decided to exploit it: this was their chance to discuss the drinking scene and its consequences. “They could not have gone any more front-page than this,” Ms. Boyarsky said later.

Everyone in Ms. Boyarsky’s classes knew she was incisive and funny, but within the campus social taxonomy, she was overlooked — she was overweight and almost never drank much, stayed out late or dated. After a few minutes of listening to the stumbling conversation about sexual harassment, she raised her hand to make a different point, about the way the school’s social life revolved around appearance and money.

“Someone made the decision for me that I’m not pretty or wealthy enough to be in Section X,” she told her classmates, her voice breaking.

The room jumped to life. The students said they felt overwhelmed by the wealth that coursed through the school, the way it seemed to shape every aspect of social life — who joined activities that cost hundreds of dollars, who was invited to the parties hosted by the student living in a penthouse apartment at the Mandarin Oriental hotel in Boston. Some students would never have to seek work at all — they were at Harvard to learn to invest their families’ fortunes — and others were borrowing thousands of dollars a year just to keep up socially.

The discussion broke the ice, just not on the topic the deans had intended. “Until then, no one else had publicly said ‘Section X,’ ” Mr. Batchu said. Maybe it was because class was easier to talk about than gender, or maybe it was because class was the bigger divide — at the school and in the country.

That was only one out of 10 sessions. At most of the others, the men contributed little. Some of them, and even a few women, had grown to openly resent the deans’ emphasis on gender, using phrases like “ad nauseam” and “shoved down our throats,” protesting that this was not what they had paid to learn.

Patrick Erker was not among the naysayers — he considered himself a feminist and a fan of the deans. As an undergraduate at Duke, he had managed the women’s basketball team, wiping their sweat from the floor and picking up their dirty jerseys.

But as he silently listened to the discussion, he decided the setup was all wrong: a discussion of a sex-related episode they knew little about, with “89 other people judging every word,” led by professors who would be grading them later that semester.

“I’d like to be candid, but I paid half a million dollars to come here,” another man said in an interview, counting his lost wages. “I could blow up my network with one wrong comment.” The men were not insensitive, they said; they just considered the discussion a poor investment of their carefully hoarded social capital. Mr. Erker used the same words as many other students had to describe the mandatory meetings: “forced” and “patronizing.”

That week, Andrew Levine, the director of the annual spoof show, was notified by administrators that he was on academic and social probation because other students had consumed alcohol in the auditorium after a performance. (His crime: dining with visiting family instead of staying as he had promised in a contract.) He was barred from social events and put on academic probation as well.

That was just what students needed to believe their worst suspicions about the administration. Ms. Frei had not made the decision about Mr. Levine and worked to cancel his academic probation, he said later, but students called her a hypocrite, a leadership expert who led badly. Hundreds of students soon wore T-shirts that said “Free Andy” or “Unapologetic.”

“Daddy, why are the students hating on you?” Mr. Nohria’s teenage daughters asked him, he told students later.

A few days before commencement, Nathan Bihlmaier, a second-year student, disappeared while celebrating with classmates in Portland, Me. He had last been seen so inebriated that a bartender had asked him to leave a pub. When the authorities told students that Mr. Bihlmaier’s body had been dredged from the harbor, apparently after a fall, Mr. Nohria and Ms. Moon were standing beside them.

The first year of their experiment was ending with a catastrophe that brought home how little sway they really had over students’ actions. Mr. Bihlmaier had not even been the drinking type. In the spirit of feminist celebration, Ms. Sandberg gave a graduation address at the deans’ invitation, but during the festivities all eyes were on Mr. Bihlmaier’s widow, visibly pregnant with their first child.

Amid all the turmoil, though, the deans saw cause for hope. The cruel classroom jokes, along with other forms of intimidation, were far rarer. Students were telling them about vigorous private conversations that had flowed from the halting public ones. Women’s grades were rising — and despite the open resentment toward the deans, overall student satisfaction ratings were higher than they had been for years.

A Lopsided Situation

Even on the coldest nights of early 2013, Ms. Frei walked home from campus, clutching her iPhone and listening to a set of recordings made earlier in the day. Once her two small sons were in bed, she settled at her dining table, wearing pajamas and nursing a glass of wine, and fired up the digital files on her laptop. “Really? Again?” her wife, Anne Morriss, would ask.

Ms. Frei been promoted to dean of faculty recruiting, and she was on a quest to bolster the number of female professors, who made up a fifth of the tenured faculty. Female teachers, especially untenured ones, had faced various troubles over the years: uncertainty over maternity leave, a lack of opportunities to write papers with senior professors, and students who destroyed their confidence by pelting them with math questions they could not answer on the spot or commenting on what they wore.

“As a female faculty member, you are in an incredibly hostile teaching environment, and they do nothing to protect you,” said one woman who left without tenure. A current teacher said she was so afraid of a “wardrobe malfunction” that she wore only custom suits in class, her tops invisibly secured to her skin with double-sided tape.

Now Ms. Frei, the guardian of the female junior faculty, was watching virtually every minute of every class some of them taught, delivering tips on how to do better in the next class. She barred other professors from giving them advice, lest they get confused. But even some of Ms. Frei’s allies were dubious.

At the end of every semester, students gave professors teaching scores from a low of 1 to a high of 7, and some of the female junior faculty scores looked beyond redemption. More of the male professors arrived at Harvard after long careers, regaling students with real-life experiences. Because the pool of businesswomen was smaller, female professors were more likely to be academics, and students saw female stars as exceptions.

“The female profs I had were clearly weaker than the male ones,” said Halle Tecco, a 2011 graduate. “They weren’t able to really run the classroom the way the male ones could.”

Take the popular second-year courses team-taught by Richard S. Ruback, a top finance professor, and Royce G. Yudkoff, a co-founder of a private equity firm that managed billions of dollars. The men taught students, among other lessons, how to start a “search fund,” a pool of money to finance them while they found and acquired a company. In recent years, search funds had become one of the hottest, riskiest and most potentially lucrative pursuits for graduates of top business schools — shortcuts to becoming owners and chief executives.

The two professors were blunt and funny, pushing a student one moment, ribbing another one the next. They embodied the financial promise of a Harvard business degree: if the professors liked you, students knew, they might advise and even back you.

As Ms. Frei reviewed her tapes at night, making notes as she went along, she looked for ways to instill that confidence. The women, who plainly wanted to be liked, sometimes failed to assert their authority — say, by not calling out a student who arrived late. But when they were challenged, they turned too tough, responding defensively (“Where did you get that?”).

Ms. Frei urged them to project warmth and high expectations at the same time, to avoid trying to bolster their credibility with soliloquies about their own research. “I think the class might be a little too much about you, and not enough about the students,” she would tell them the next day.

By the end of the semester, the teaching scores of the women had improved so much that she thought they were a mistake. One professor had shot to a 6 from a 4. Yet all the attention, along with other efforts to support female faculty, made no immediate impact on the numbers of female teachers. So few women were coming to teach at the school that evening out the numbers seemed almost impossible.

As their final semester drew to a close, the students were preoccupied with the looming question of their own employment. Like graduates before them, the class of 2013 would to some degree part by gender after graduation, with more men going into higher-paying areas like finance and more women going into lower-paying ones like marketing.

Ms. Navab, who had started dating one of the men — with an M.D. and an M.B.A. — from the Ethiopian dinner, had felt freer to focus on her career once she was paired off. She was happy with her job at a California start-up, but she pointed out that she and some other women never heard about many of the most lucrative jobs because the men traded contacts and tips among themselves.

This was the lopsided situation that women in business school were facing: in intellectual prestige, they were pulling even with or outpacing male peers, but they were not “touching the money,” as Nori Gerardo Lietz, a real estate private equity investor and faculty member, put it. A few alumnae had founded promising start-ups like Rent the Runway, an evening wear rental service, but when it came to reaping big financial rewards, most women were barely in the game.

At an extracurricular presentation the year before, a female student asked William Boyce, a co-founder of Highland Capital Partners, a venture capital firm, for advice for women who wanted to go into his field. “Don’t,” he laughed, according to several students present. Male partners did not want them there, he continued, and he was doing them a favor by warning them.

Some women protested or walked out, but others said they believed he was telling the truth. (In interviews, Mr. Boyce denied saying women should not go into venture capital, but an administrator said student complaints prompted the school to contact the firm, which he had left decades before.)

The deans had not focused on career choice, earning power or staying in the work force; they felt they first needed to address campus issues. Besides, the earning gap posed a dilemma: they were hoping fewer students would default to finance as a career. “Have the courage to make the choices early in your life that are determined by your passions,” Mr. Nohria told students.

Plenty of women had taken Mr. Ruback and Mr. Yudkoff’s classes on acquiring and running businesses, including Ms. Upton, who had delivered the crackerjack finance presentation. She counted 30 to 40 classmates planning search funds, all men except for a no-nonsense engineer named Jennifer Braus. The professors eventually decided to finance and advise Ms. Braus, hoping other Harvard women would follow.“Nothing succeeds like success,” Mr. Ruback said.

Ms. Upton decided to take a far lower-risk job managing a wealthy family’s investments in Pittsburgh, where her fiancé lived. “You can either be a frontier charger or have an easier, happier life,” she said.

Looking Ahead

Of all the ceremonies and receptions during graduation week, the most venerated was the George F. Baker Scholar Luncheon, for the top 5 percent of the class, held in a sunny dining room crowded with parents who looked alternately thrilled and intimidated by what their offspring had achieved.

In recent years, the glory of the luncheon had been dimmed by discomfort at the low number of female honorees. But this year, almost 40 percent of the Baker scholars were women. It was a remarkable rise that no one could precisely explain. Had the professors rid themselves of unconscious biases? Were the women performing better because of the improved environment? Or was the faculty easing up in grading women because they knew the desired outcome?

“To my head, all three happened,” Professor Piskorski said. But Mr. Nohria said he had no cause to think the professors had used the new software, and the subjective participation scores, to avoid gender gaps. “Sunshine is the best disinfectant,” he said, a phrase that he said had guided him throughout his project.

One of the Baker scholars was Ms. Boyarsky, the classroom truth-teller. Two hours after the luncheon, she stepped up to a lectern to address thousands of graduates, faculty members and parents. Of the two dozen or so men and only 2 women who had tried out before a student committee, she had beaten them all, with a witty, self-deprecating speech unlike any in the school’s memory.

“I entered H.B.S. as a truly ‘untraditional applicant’: morbidly obese,” she said.

The theme of her speech was finding the courage to make necessary but painful changes. “Courage is a brand new H.B.S. professor, younger than some of her students, teaching her very first class on her very first day,” she said. “Courage is one woman” — the one who reported the groping episode — “who wakes the entire school up to the fact that gender relations still have a long way to go at H.B.S.”

And, Ms. Boyarsky continued, she had lost more than 100 pounds during her final year at Harvard. “Courage was then me battling the urge to be defensive — something I believe I had been for a long time about this particular issue — and taking a hard, honest look within myself to figure out what had prevented change,” she said.

Even before she finished, her phone was buzzing with e-mails and texts from classmates. She was the girl everyone wished they had gotten to know better, the graduation-week equivalent of the person whose obituary made you wish you had followed her work. She had closed the two-year experiment by making the best possible case for it. “This is the student they chose to show off to the world,” Ms. Moon said. For the next academic year, she was arranging for second-year students to lead many of the trickiest conversations, realizing students were the most potent advocates.

The administrators and the class of 2013 were parting ways, their experiment continuing. The deans vowed to carry on but could not say how aggressively: whether they were willing to revise the tenure process to attract more female contenders, or allow only firms that hired and promoted female candidates to recruit on campus. “We made progress on the first-level things, but what it’s permitting us to do is see, holy cow, how deep-seated the rest of this is,” Ms. Frei said.

The students were fanning out to their new jobs, full of suspense about their fates. Because of the unique nature of what they had experienced, they knew, every class alumni magazine update and reunion would be a referendum on how high the women could climb and what values the graduates instilled — the true verdict on the experiment in which they had taken part.

As Ms. Boyarsky glanced around her new job as a consultant at McKinsey in Dallas, she often noticed that she was outnumbered by men, but she spoke up anyway. She was dating more than she had at school, she added with shy enthusiasm.

“I am super excited to go to my 30th reunion,” she said.

Brent McDonald and Hannah Fairfield contributed reporting.

Wednesday, August 28, 2013

Bits Blog: How Surveillance Changes Behavior: A Restaurant Workers Case Study

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Saturday, August 24, 2013

Economix Blog: Study Suggests Shift in Fed Bond-Buying

Sunday, August 18, 2013

Wheels Blog: The Rich Drive Differently, a Study Suggests

Thursday, July 11, 2013

Case Study: A Social Entrepreneur’s Dilemma: Nonprofit or For-Profit?

Matthew Staver for The New York TimesSaul Garlick, founder of Student Movement for Real Change, considered closing the nonprofit and starting a for-profit venture after missing a few payrolls.

In 2002, at the age of 18, Saul Garlick started a program to fight poverty by building schools in rural South Africa. By 2004, his vision had broadened and he started an organization, Student Movement for Real Change, to encourage entrepreneurship in third world communities. Through this organization, he sent students to live with local families, hunt for water sources, farm alongside villagers and absorb the day-to-day nuances of life in a developing country with the goal of building social businesses along with the local residents.

The time and effort spent on fund-raising for a nonprofit has left its founder debating whether it is worth it to change the group.s business model.

Over the last two years, Mr. Garlick and his team have produced some 50 such “microenterprises” — including one that finances water projects in Kenya, one that sells charcoal and stoves in Rwanda and a cocoa nursery in Ghana.

THE CHALLENGE By 2009, Mr. Garlick’s social enterprise, renamed ThinkImpact, was raising about $400,000 a year to support the cause. But along with running the enterprise, it had to raise funds, monitor and evaluate programs, and provide transparency. Its employees were paid below-market wages, the hours seemed endless and the organization would soon be missing payrolls. “Nothing about that scenario was sustainable,” Mr. Garlick said. “And scale depended solely on fund-raising ability.” He was convinced there had to be a better way.

THE BACKGROUND In 2007, Mr. Garlick started taking a salary. He was 23, out of school and working full time for his organization — mostly to find supporters for the cause. The workload grew and he hired another recent graduate to run daily operations.

“I thought that was going to make everything easier, but it didn’t,” said Mr. Garlick, expressing a common frustration for nonprofits: the endless pressure to raise funds takes away from time spent doing the organization’s work. “Many of the aspirational young nonprofit employees become beggars. They are seeking a way out of a tortuous financial reality where they are building the plane while flying it.”

Adding to the pressure was the way Mr. Garlick and his team were encouraged to raise funds. They were advised not to “place all their eggs in one basket,” by relying on a sole funder or a single government agency. Instead, ThinkImpact diversified its reach and sought donations in smaller denominations. Eventually, Mr. Garlick realized that trying to please hundreds of stakeholders was a rather chaotic way to raise money and run a business. “In actual fact, unless you’re running for president, or have a team that exists to raise small dollars, you can’t meet payroll that way,” he said. “People give $20 and think they own your decision-making.”

On the ground, ThinkImpact broadened its reach. More than 100 young people worked with the organization in Africa, primarily in South Africa and Kenya, where they established a strong presence. In addition to developing a curriculum for social enterprise educational experiences, they were adapting to local needs, providing health workshops that reached hundreds of villages in Kenya, and building more than 50 homegrown development projects with the participation of the local community.

But in 2010, after attending a weeklong workshop where he met fellow social entrepreneurs and investors, Mr. Garlick started asking serious questions about his own business model. The questions included: What is our specialty? What value do we produce in people’s lives? How big can we get? How do we arrange for sufficient financing to let us focus on our real work?

THE OPTIONS After missing a couple of payrolls in 2010, Mr. Garlick concluded he had three options.

Option 1: Remain a nonprofit. With contracts from two universities for about $50,000 and funds from donations, grants and foundations expected to bring in $25,000 to $100,000, Mr. Garlick felt constricted. To really grow, he estimated that he would need $200,000 to $250,000 more. But raising that money would be exceedingly difficult using traditional methods and would keep the company almost endlessly locked into fund-raising mode.

Thursday, June 20, 2013

Wheels Blog: Porsche and GMC Rank Highest in New Version of J.D. Power Initial Quality Study

Porsche The 2013 Porsche 911 50th Anniversary Edition. Porsche received top marks in J.D. Power’s revised Initial Quality Study.

J.D. Power released the results of a new version of its Initial Quality Study on Wednesday at a news conference with the Automotive Press Association in Detroit. The 2013 study was redesigned to measure better the quality of new technology that is becoming common in vehicles – including features like voice-recognition, blind-spot-monitoring, lane-departure-warning and self-parking systems.

The study scores automakers by brand and by model on the number of problems per 100 vehicles, or “pp 100.” A lower number signifies a better rating, indicating that owners have reported fewer problems for that brand or model.

The top scorers in the brand rankings were Porsche at No. 1 with a score of 80 problems per 100 vehicles, followed by GMC (90), Lexus (94), Infiniti (95), Chevrolet (97), Acura and Toyota (tied at 102), Honda (103), Jaguar (104), Hyundai, Kia and Mercedes Benz (all tied at 106). Because of the changes in the study’s methodology and content, the pp 100 scores cannot be directly compared with scores from previous years. But it is still possible to compare the brands’ relative rankings.

The redesigned study found that nearly two-thirds of the problems that owners experience with their new vehicles in the first 90 days are related to design and not manufacturing. In some cases, a component may be working as it was designed to, but can still pose a problem for the owner because it is difficult to understand or operate.

While this may seem like good news – because it involves fewer breakdowns – it is actually bad news because design-related problems are more difficult, if not impossible, to resolve.

Because design problems are not the result of breakdowns or malfunctions, the study found that just 9 percent of the problems are taken to a dealership within the first 90 days of ownership. And when they are, the problem is fixed only 13 percent of the time, whereas in the case of an actual defect or malfunction, the problem is fixed 42 percent of the time.

Many of the problems owners had with a vehicle were related to the driver’s interactions with it. These interface problems often involve voice recognition or hands-free technology, Bluetooth pairing for mobile phones and navigation systems.

What was J.D. Power’s takeaway message for consumers? When test-driving a vehicle you intend to purchase, spend as much time evaluating the technology and how easily you interact with it as you spend evaluating how well the vehicle drives, David Sargent, vice president for global automotive at J.D. Power, said in a telephone interview.

The study also found that initial quality had decreased from last year and that the decline was due mostly to technology design issues, Mr. Sargent said.

General Motors made a strong showing in this year’s survey. “GMC is second; they haven’t been anywhere near that before,” Mr. Sargent said. “Chevrolet is fifth; they’ve not been near that before. Buick and Cadillac were above the industry average.” Mr. Sargent added that they G.M. had worked “incredibly hard” to overcome its problems, noting that its recently introduced models included some, like the Buick Encore and Chevrolet Malibu, that score well on quality.

Indeed, at the news conference Mr. Sargent said that if the rated brands were combined under their parent corporations, G.M. would have a better score than any other company in this year’s study. G.M.’s trucks scored particularly well, he said.

Conversely, Nissan fell conspicuously and is now 30th out of 33 brands because of problems with three major new models — the Altima, Pathfinder and Sentra. “The competition is so tough these days, you don’t have to get much wrong to fall down in the rankings a long, long way,” Mr. Sargent said.

Ford remained in relatively the same position it has occupied for the last two years when it was hit hard with complaints about its MyFord Touch driver interface. Ford was 27th out of the 33 rated brands. Even though the interface is improving as Ford brings out updates, Mr. Sargent its inclusion in more vehicles has resulted in continued complaints.

As in years past, the Initial Quality Study surveys the owners and lessees of new vehicles after the first 90 days of ownership. This year it was based on responses from more than 83,000 owners of new 2013 passenger vehicles. Owners were asked whether they had any of 233 possible problems, which included mechanical defects and malfunctions, as well as design issues.

In this year’s redesigned study, design problems accounted for two-thirds of the total number of questions. Previously, design issues accounted for about half of the survey. For the first time, the study is conducted online, which allowed J.D. Power to get more detailed feedback on each of the problem areas.

This is the fourth generation of the study, which was begun in 1987. It was also updated in 1998 and 2006.

Sunday, May 19, 2013

British Study Raises Warning on Scottish Banks

LONDON — An independent Scotland could find its banks too big to rescue in the event of another crisis, according to a British government report that compares the Scottish financial sector to those of debt-laden Iceland and Cyprus.

The document, to be published Monday, is the latest of three studies by the British government meant to sway opinion in Scotland ahead of next year’s planned referendum there on independence.

Last month the British government suggested that an independent Scotland would not be able to keep the pound sterling and would have to either adopt its own currency or embrace the euro.

The new study, a summary of which was made available ahead of publication, highlights the size of Scotland’s banking sector — much of which had to be rescued by British taxpayers after the financial crash — relative to the rest of the Scottish economy. The sector stands at 1,254 percent of Scotland’s gross domestic product, compared with banking assets in Britain worth 492 percent of G.D.P., the Treasury document says.

“By way of comparison, before the crisis that hit Cyprus in March 2013, its banks had amassed assets equivalent to around 700 percent of its G.D.P. — a major contributor to the cause and impact of the financial crisis in Cyprus and the ability of the Cypriot authorities to prevent the systemic effects when it hit,” the study says.

The document adds that by the end of 2007 Icelandic banks had amassed consolidated assets equivalent to 880 percent of Icelandic G.D.P.

It cites the verdict of the Organization for Economic Cooperation and Development, which said that “the banks grew to be too big for the Iceland government to rescue.

“Banking in these circumstances became very dangerous when the global financial crisis deepened,” it said.

The study says that “a serious banking crisis in an independent Scotland could pose a significant risk to Scottish taxpayers,” with the potential economic fallout amounting to about 65,000 pounds ($98,600) per capita.

The paper concludes that Scottish banks could either have to accept higher risks and costs associated with volatility or restructure and diversify their assets.

John Swinney, finance secretary of the Scottish government, which supports independence, dismissed that document as “a discredited, feeble attempt to undermine confidence in Scotland’s ability to be a successful independent country” adding that “it will not work.”

Mr. Swinney said that he had viewed a leaked draft of the paper and that much of it “seems to be based on a flawed, outdated view of the world which takes no account of the substantial banking reforms which have been ongoing across Europe since 2008.”

The Treasury’s study counted Scottish banks as all those registered in Scotland, including the Royal Bank of Scotland — but excluding NatWest, which is part of the group but is registered in London, and excluding assets of RBS’s foreign subsidiaries.

Bank of Scotland, which is part of the Lloyds Banking Group, is included as a Scottish institution as it is registered in Scotland.

Untangling Scotland’s banks from the broader British financial sector would be a highly complex task were Scots to vote for independence, because both RBS and Lloyds Banking Group were bailed out by British taxpayers after the financial crash.

The British government owns 80 percent of RBS and 40 percent of Lloyds, which are both run from London. That would almost inevitably require some changes in ownership in the event of independence.

Nevertheless the Treasury’s study argues that the total support provided to RBS in 2008 would have been the equivalent of 211 percent of Scotland’s G.D.P. By contrast the total British interventions across the whole banking sector were 76 percent of the country’s G.D.P.

The document also adds that any attempt at shared regulatory arrangements between an independent Scotland and the continuing United Kingdom would be “significantly more complex than those that currently exist” and would be likely to increase the costs for firms of complying with this regulation.

Thursday, May 2, 2013

Study Finds Health Care Use Rises With Expanded Medicaid

New results from a landmark study, released on Wednesday in The New England Journal of Medicine, go a long way toward answering those questions. The study, called the Oregon Health Study, compares thousands of low-income people in Oregon who received access to Medicaid with an identical population that did not.

It found that those who gained Medicaid coverage spent more on health care, making more visits to doctors and trips to the hospital. But the study suggests that Medicaid coverage did not make those adults much healthier, at least within the two-year time frame of the research, judging by their blood pressure, blood sugar and other measures. It did, however, substantially reduce the incidence of depression, and it made them vastly more financially secure.

“There was this view that Medicaid coverage would not do much for the low-income uninsured, either because they had access to charity care or because Medicaid is not good insurance,” said Amy Finkelstein of the Massachusetts Institute of Technology. “This rejects that notion entirely.” Her work on the Oregon study contributed to her receipt last year of the John Bates Clark Medal, a laurel for younger economists considered second only to the Nobel Memorial Prize in Economic Science for those in the profession.

Currently about 50 million Americans, nearly all them poor, receive health care coverage under Medicaid, a federal program administered by the states. But most states do not provide Medicaid coverage to adults without disabilities or dependent children, no matter how poor they are.

Health economists anticipate that new enrollees to the Medicaid program will swell the country’s health spending costs by hundreds of billions of dollars over time. In 2014, at least 18 states and the District of Columbia will provide coverage to all adults with incomes below 133 percent of the federal poverty line. That currently would translate to coverage for all individuals with incomes below about $15,000 and for households of four people receiving less than about $31,000.

Many more states might join in the expansion in the coming months or years. The Affordable Care Act, President Obama’s health care law, has the federal government pay for a large majority of the increased Medicaid costs in perpetuity, making the financial burden on states much smaller.

The unique Oregon study came about when the state found itself with enough money to provide additional Medicaid coverage to about 10,000 low-income adults. Many times that number qualified.

Rather than deny coverage to all Oregonians, the state established a lottery, to distribute coverage randomly. That gave economists and other social scientists a once-in-a-lifetime chance to perform a randomized control experiment — the gold standard in medical and scientific research, but a rarity in much of social science — isolating the effect that coverage had on health and broader well-being.

An earlier round of results from the Oregon Health Study analyzed assessments of health and well-being reported by study participants, as well as data from hospitals and credit agencies. This second major set of results stems from biometric data collected at in-person visits with participants. A huge team of researchers collected blood samples, blood pressure readings and weight measurements from thousands of Oregonians; about half of them had won access to Medicaid in a lottery and half had not.

The researchers found that Medicaid coverage did not significantly affect the prevalence or diagnosis of hypertension or high cholesterol, or the use of drugs used to treat those conditions. It significantly increased the probability that a person would receive a diagnosis of diabetes and be treated, though it did not reduce blood sugar levels noticeably.

Where Medicaid seemed to have the strongest measured impact was on depression. Getting Medicaid coverage reduced the probability of a positive screening by more than 30 percent.

“The authors are almost tilting the spin on the story to be a little more pessimistic than I would have been,” said John Holahan of the Urban Institute, responding to the new findings.

“There are some positive effects on health,” he said, calling the effect on depression “especially strong.”

Confirming previous findings released by the researchers, the new round of results found that adults covered by Medicaid increased their use of a broad number of health services, like mammograms and cholesterol tests. That increased their medical spending by about 35 percent, compared to adults who did not win Medicaid coverage in the lottery.

Some researchers had theorized that getting Medicaid coverage would lead to a spike in use of medical services by low-income adults. Once covered, they might visit the doctor, have conditions checked out and treated, then stop using medical services as much.

But the second set of results from the Oregon study shows that is not the case. There is no spike in use of health services, nor is there any decline later on. Rather, use of the health system increased, and that increase persisted between the first year and the second year of the study.

“They go to the doctor more often, they visit the hospital more often, they use more prescription drugs, they are more likely to use preventive care,” said Katherine Baicker, a Harvard professor, co-author of the study and former economic adviser to President George W. Bush. “There is no evidence of a spike of utilization from pent-up demand.”

Wednesday, February 27, 2013

Midsize-Firm Study Suggests Culture Is a Big Selling Point

By Leigh Jones All Articles

The National Law Journal

February 22, 2013

Maintaining a collegial culture is the key advantage that midsize law firms believe they enjoy in recruiting lawyers, according to a study by Georgetown University Law Center.

The study, a collaboration between the law school and law firm referral network TAGLaw, revealed that 70 percent of midsize law firms ranked having a strong culture as the first- or second-best way to woo prospective hires.

"Midsize firms are really seeing that as a competitive advantage -- particularly as large firms are having a lot of challenges managing their cultures," said Lisa Rohrer, director of executive education and a research fellow at the Center for the Study of the Legal Profession at Georgetown University Law Center.

The survey results, released Tuesday, were provided by leaders at 68 law firms with between three and 500 attorneys. The median size was 40 attorneys. Of those responders, about half were located in North America and one-quarter each in Europe and Latin America.

Culture can mean different things to different firms, Rohrer said. In general, it means the glue that holds a firm together, she said. "It's how they treat each other, how they think of themselves separately from their own individual books of business."

Among other findings, the firms tended to avoid relying on lateral hires and especially mergers as growth strategies, with 90 percent citing organic growth as a major future revenue driver. Some 57 percent planned to rely on lateral hires; only 19 percent expected to expand through mergers.

That lack of interest in mergers was partly due to a desire to remain independent, with many respondents citing preserving culture as an important reason not to merge.

Asked what measures they had taken since 2007 to improve profitability, 14 percent of the firms with revenue increases of 10 percent or more had done so by freezing or cutting associate pay. Of the firms that had increased revenue by 10 percent or less, 40 percent had frozen or cut associate pay. Ninety-two percent of the firms reported that most of their lateral hires lived up to expectations.

The strategic issues of the greatest concern to the firms was aging or retiring partners, particularly at firms with 10 percent growth or less since 2007. Of those firms, 45 percent reported that issue as the most worrisome.

Thursday, January 3, 2013

Case Study: A Start-Up’s Dilemma: A Lack of Capital, or Lack of Control

THE CHALLENGE Running low on inventory early in 2011 and lacking the money for another production run to fulfill orders to her Web site and restock her Manhattan retail accounts, Ms. Rosshandler feared she would have to shut down her start-up. She had been rejected by bank after bank (some citing her lack of American citizenship). She had decided against asking friends for money — or her parents, who had already helped at the outset — and she had come up dry with venture capitalists. As her prospects dimmed, she started interviewing for jobs.

THE BACKGROUND Ms. Rosshandler was working at a Manhattan events and interior design company when, on New Year’s Day in 2007, she decided that like her father, a successful plastics industry entrepreneur in Australia, she would prefer to work for herself. Her idea: to improve upon a South African product called Odor-Go that she had seen in her native country but nowhere in the United States. Her product would have gel caps to be swallowed, similar to Odor-Go, but it would package them with follow-up mints to be sucked. Plus, her breath-freshening duo would be gluten-free and vegan. “I wanted to be able to take my own product,” she said, explaining that most gel caps are made using meat byproducts. She filed to trademark the name Eatwhatever.

It was her understanding that the way to vanquish bad breath caused by oniony, garlicky foods was to go to the source of the problem, the stomach. Having studied acting and law, not chemistry, Ms. Rosshandler left the product formulation to a contract manufacturer. “Parsley has been used for generations to freshen breath,” she said. “People know, just from everyday life, that freshening the mouth only — especially after consuming pungent foods — doesn’t get rid of the smell that comes from within the stomach. We found that the combination of concentrated organic peppermint and parsley oils, when dissolved in the stomach, provides this fresh feeling from within. Your breath actually smells good, from deep inside, not just superficially from the mouth.”

She hired a package designer and prominently displayed the tagline: 2 Steps to Kissable Breath. Also on the packaging was a cheeky instructional mash-up of the two operative steps (swallow and suck). She was, after all, seeking a young demographic. “I had no idea what I was doing,” said Ms. Rosshandler, laughing.

She began her sales efforts in 2008 by walking into the C.O. Bigelow flagship apothecary store in Manhattan and asking, “Who does the buying here?” She left with a sale. A month or so after Eatwhatever’s debut, a friend in public relations helped her get a mention on DailyCandy’s main page. That brought $20,000 worth of orders to her Web site in 12 hours and generated plenty of buzz. With the help of a distributor, Eatwhatever soon cracked New York retail outlets like Ricky’s, Joe Coffee and Zitomer, a specialty department store; Ms. Rosshandler even opened retail beachheads in Paris and Sydney.

But lacking contracts with mass merchants, sales volume remained low. The company’s annual revenue failed to top $40,000 in 2008, 2009 and 2010. Squeezed for cash, Ms. Rosshandler could not pay for marketing or, eventually, even for her next production run. That is when she interviewed for a job selling high-fashion hair accessories.

THE OPTIONS And then in rode her white knight. Or was he? She had networked her way to Arthur T. Shorin, an investor and former chief executive of the Topps Company, a confectionary company known for its baseball trading cards, who promised candy industry expertise and contacts and an immediate infusion of $250,000, with more to come if justified. But Mr. Shorin’s nonnegotiable terms were stark. In return, he wanted 75 percent of the enterprise. Ms. Rosshandler would retain 25 percent with the opportunity to earn back another 15 percent should certain benchmarks be met. The offer included a salaried job in Mr. Shorin’s New York company, Artuitive, an incubator for start-ups.

Friends advised Ms. Rosshandler against the deal, citing the tough terms, even if she were to rebuild her stake to 40 percent. But Mr. Shorin had impressed her in their exploratory meetings, and she asked herself this question: Isn’t 25 percent of something better than 100 percent of nothing?

WHAT OTHERS SAY Steve Schuster, founder of Schuster Products in Milwaukee, maker of Blitz mints: “Ms. Rosshandler finds herself in a precarious cash-flow position and — typical of many start-up entrepreneurs — may not completely grasp how much money she actually will need to grow her brand to a reasonable level of distribution. Arthur Shorin presents a very shrewd and unique proposition. Basically, he is her lifeline. Shorin, who made a staggering amount of money selling Topps to Michael Eisner’s private equity company, has great knowledge of the candy industry. It is imperative for Ms. Rosshandler to move forward with this proposition.”

Josh Kopelman, a partner at First Round Capital, Philadelphia: “I believe that entrepreneurs, not investors, create great companies. In my experience, if a founder doesn’t retain meaningful equity at the seed stage, it greatly reduces their motivation and creates a real misalignment between investor and entrepreneur. I’d encourage Ms. Rosshandler to keep looking for alternatives, including the possibility of raising money from her friends. If she believes the company is going to create value and be successful, then she is actually doing her friends a favor by letting them invest — assuming she is candid about the extreme level of risk and that they don’t invest money they aren’t prepared to lose. I’d encourage her to consider tweaking the branding to make it more PG-13 than R-rated, as it might reduce some investor’s unease. I know it’s hard to turn down money — especially when a company really needs it.”

Adeo Ressi, founding member of TheFunded and head of The Founder Institute, an early stage business accelerator based in Silicon Valley: “Ms. Rosshandler should definitely not take this deal. First, she loses complete control of the company, and she can be removed or wiped out of her equity at any moment without notice. Second, the deal is very unusual, so she will never be able to attract other investors again. Third, the round values the operating business under $75,000, around two times revenue. As the terms indicate, she will be an employee of Artuitive, so this deal resembles a generous employment offer rather than a viable investment. This is an angel investment opportunity, and there are the largest number of angel investors in history. The volume of investors is both good and bad. On the positive side, if Ms. Rosshandler dedicates four months and meets with a lot of angels, she will raise $500,000 with a seven-figure valuation. On the negative side, she will need to meet with over 150 angels and waste a lot of time pitching to people that will try to take advantage of her, like Arthur Shorin.”

THE RESULTS Offer your thoughts on the You’re the Boss blog at nytimes.com/boss. Next week, on the blog and on this page, we will give an update on what Jacqui Rosshandler decided to do.

Saturday, November 24, 2012

Case Study: Family Farm in California Confronts Reports of Arsenic in Its Rice

THE CHALLENGE In mid-September, Consumer Reports published the results of independent lab tests that found inorganic arsenic, a carcinogen, in rice and many rice products. This came on the heels of a study by Dartmouth, released in February, that showed inorganic arsenic in brown rice syrup. Tim Schultz, 51, part of the third generation of Lundberg Farms’s family owners, said the company’s response was evolving. Because there is no federal safe standard for inorganic arsenic in food, Lundberg has struggled to make sense of the information for its customers, who greeted the news with panic.

THE BACKGROUND The farm was founded by Albert Lundberg, a Nebraska wheat and corn farmer who came to California in 1937 to escape the Dust Bowl. He, his wife, Frances, and their four sons grew rice and sold it to the local co-op until the late 1960s, when they became part of the nascent organic farming movement. They built a small rice mill and began selling organic short-grain brown rice.

The farm grew steadily — an average of 11 percent a year — and never needed outside investment. In the 1980s, sales grew much faster than land could be acquired, so the company decided to contract with other growers. Its leaders chose family farms that shared their view of sustainable farming, which Mr. Schultz said was to “leave the land better than you found it.”

In the early 1990s, leadership of the farm moved from the second generation to the third, with the grandchildren of Albert and Frances (and in some cases their spouses, like Mr. Schultz) taking over. Two fourth-generation Lundbergs recently became involved.

Seventy percent of the farm’s sales are organic products and the other 30 percent are “eco-farmed,” meaning no fumigants are used and the company limits the use of herbicides and pesticides, Mr. Schultz said. But that did not insulate the company against the arsenic findings.

Although the government regulates the amount of inorganic arsenic in drinking water, there are no standards for food. “The jury is still out on what levels may cause health problems,” Mr. Schultz said, “but the federal standard for drinking water is 10 parts per billion. Tests on our rice show 95 parts per billion.” Consumer Reports’ tests found levels in rice ranging from about 24 to 214 parts per billion.

With its customers looking for answers, the company worried about how and what to communicate. “One of our biggest challenges is that this is a very technical issue,” Mr. Schultz said. “It’s not a 30-second conversation.”

THE OPTIONS The family’s first response was to play defense. Because many studies have documented the health benefits of eating rice, especially brown rice, Mr. Schultz said, “We were thinking, if this was really causing problems in the population, wouldn’t it have shown up in data somewhere before this?”

Dismissing the new information, however, was not consistent with the business’s culture or the family’s belief system. “We are a company that is always open to new information and ideas — like growing organic,” Mr. Schultz said. “That’s one of the reasons we’ve been successful.”

The farm’s leaders also considered not addressing the issue at all, because the studies and tests were not targeted specifically at Lundberg Family Farms. Mr. Schultz said they discussed letting the industry take the lead and following in the steps of research organizations and industry groups like the USA Rice Federation. “This was a bigger issue than us, so we thought maybe we shouldn’t try to handle this as an individual company,” he said.

But in March, the company posted a video on its Web site in which its chief executive, Grant Lundberg, acknowledged the news and talked about the family’s efforts to keep its products safe and healthy. The decision to post the video was not easy. “Some family members were concerned that we were making this the focal point, rather than stressing all the good things about rice,” Mr. Schultz said. “But we thought this was a way to show that we really do care.”

The farm’s leaders also began intensively studying arsenic and its relationship to rice. They were quickly overwhelmed, however, by the volume of information, much of it contradictory. “We put all the papers and information we were reading online in real time for consumers so they could read what we were reading,” Mr. Schultz said. That proved to be a mistake — too much information and not enough analysis. Not every consumer wants that level of detail, he said: “Many of them just want to know, ‘Will eating rice kill me?’ ”

Thursday, November 22, 2012

Diversity Is Still a Challenge for N.Y. Firms, Study Finds

By Christine Simmons All Articles

New York Law Journal

November 21, 2012

Despite law firms' efforts to promote diversity, results of a new survey of women and minorities at New York firms "paint a picture of stagnation," according to the New York City Bar's sixth Diversity Benchmarking Report. The study, which reported data for 2011, is based on the responses of 74 law firms that were signatories to a city bar statement of diversity principles.

"While new hires across levels are more diverse than attorneys at signatory firms, elevated turnover for women and minorities continues to erode the gains," the report said, noting there are higher turnover rates at every level for women lawyers compared to men and higher turnover for minority attorneys compared with whites. "Elevated turnover rates contribute to the creation of a 'leaky faucet' of talent for diverse attorneys."

Women continue to improve their representation at the partner level, reaching a new high of 18.3 percent in the 2011 results, while simultaneously declining among associate ranks. The study found that firms with more women on their management committees are generally more diverse firm-wide.

Minority attorney representation at the firms rose slightly in 2011, to 17.2 percent from 16.6 percent in 2010, but failed to reach the 2009 high of 18.1 percent, the report said. In particular, the percent of Hispanic and Asian attorneys increased in 2011 after declining from 2010. Meanwhile, the representation of black attorneys declined last year.

"The numbers presented in this report demonstrate a slow rate of change and indicate that many firms may need to reassess how they go about creating a workforce that better reflects our society," Carey Dunne, the city bar's president and a partner at Davis, Polk & Wardwell, said in a statement.

Thursday, October 4, 2012

Hip Resurfacing Draws Warning After Study Published in Lancet

A major study released on Monday urged women to avoid an alternative hip replacement procedure known as “resurfacing” and also recommended against its use in smaller men.

The study reflected the experiences of some 32,000 patients followed by the National Joint Registry of England and Wales. The report was sponsored by the British registry and published in a medical journal, The Lancet.

The researchers, headed by Dr. Ashley W. Blom of the University of Bristol, concluded that resurfacing had an “unacceptably high” early failure rate in women when compared with traditional hip replacement. The early failure rate was also higher in smaller men.

Traditional hip implants are supposed to last 10 years or more before requiring replacement. But the only class of patients in which the durability of a resurfacing was on a par with a traditional plastic-and-metal implant was middle-aged men of larger stature, the study found.

The new report is in keeping with earlier findings about resurfacing, a procedure that preserves more of a patient’s thigh bone than a conventional hip replacement.

Some device makers and surgeons heavily promoted the technique as a breakthrough that would allow younger patients to remain more active. But the procedure’s popularity has fallen in recent years as concerns about it have grown.

Resurfacing devices belong to a class of products know as metal-on-metal implants in which both the cup and ball of an implant are made of metal. Over the last two years, the use of all-metal implants has largely ceased because of evidence that they generate metallic debris as they wear, damaging tissue and muscle.

In a commentary accompanying the new report, an expert in this country, Dr. Art Sedrakyan, noted that the apparent failure of resurfacing devices raised questions about how such products were reviewed by the Food and Drug Administration.

“If hip resurfacing devices are found to be unsafe, then the implications are grave,” wrote Dr. Sedrakyan, a researcher at Weill Cornell Medical College of Cornell University.

While traditional all-metal implants were marketed in this country with little testing, the F.D.A. required producers to run clinical trials of resurfacing implants before they were sold here. As a result, patients who got traditional metal hips that failed can sue their manufacturers, while those patients who got a resurfacing that failed are barred from doing so.

Companies that market resurfacing devices such as Smith & Nephew, which sells a product known as the Birmingham implant, have repeatedly argued that the devices are not prone to the same problems as traditional all-metal implants. And some patients who got a resurfacing have also said that it has allowed them to participate in more physically demanding activities, like skiing.

In a statement, Smith & Nephew said that the new report underscored the company’s longstanding position that “patient selection” is important to the success of the Birmingham device.

“In the right patients, it has a record of superior clinical performance,” the company said.

Dr. Blom, the British researcher, reported that data showed the Birmingham device was used in about 50 percent of all resurfacing procedures captured by the registry.