As Head of Client Services at plaintiff securities heavyweight Pomerantz, Jennifer Pafiti has her finger on the pulse of what matters to investors. She liaises regularly with influential pension funds and asset managers with investments in all the major publicly traded companies around the globe.
Originally from the UK and now based in Los Angeles, Pafiti has been a part of several groundbreaking and complex securities fraud litigations in her career, including the case against the scandal-ridden Brazilian oil giant, Petrobras, in which the firm achieved a record-breaking $3B recovery for defrauded investors.
When Pafiti joined Pomerantz eight years ago, she set the firm on a new course for marketing and business development. She spearheaded the development of PomTrack, the firm’s proprietary portfolio monitoring program, which uses the latest technology and a team of experts to cross-reference clients’ trading data against current and potential securities class action claims. The program now monitors investment funds with over $8T in assets under management.
Pafiti also undertakes educational initiatives for investors, including organizing an annual Corporate Governance and Securities Litigation conference. This year’s theme was The Collective Power to Make Change, specifically in ESG (environmental, social and corporate governance), with President Bill Clinton as a special guest speaker.
A longtime champion for women and diversity in the legal field, Pafiti is an active mentor, speaker and advocate for increasing representation. She speaks globally and acts locally: Her PomTrack team is 64 percent female and 45 percent diverse.
Her motives are practical: “If you want something done,” she says, “give it to a busy woman with no spare time.”
Lawdragon: Would you say institutional investors are in a uniquely powerful position to challenge bad corporate behavior?
Jennifer Pafiti: While any investor should be able to challenge bad corporate behavior, the reality is that institutional investors carry more weight in this field. Beyond compensation, large investors want to see that the wrongdoings will not be repeated. And the company should absolutely pay attention, to ensure investors remain confident to continue investing in these companies.
Institutional investors are in a unique position where they can encourage corporate boards not only to settle claims financially, but to adopt governance reform. They must use their engagement with a corporation and say, "Okay, we've got the payment now, but how are you going to convince us that this board isn't going to repeat the fraud? What are you going to do to make changes to ensure better checks and balances? What additional promises can you give us to say that this won't happen again? Otherwise we might want to invest elsewhere.”
LD: I understand you helped develop a portfolio and monitoring service, PomTrack. Can you tell me about that?
JP: We use PomTrack to monitor our clients’ assets and let them know when a company they've invested in has suffered some kind of stock price decline due to financial misconduct. It’s a combination of state-of-the-art technology and an incredible team of attorneys, forensic economists, damages analysts, paralegals and professional staff.
We alert our clients at the forefront of the cases that they might want to get involved in. Sometimes it’s a simple restatement of financials, or it could be in the realm of ESG like an environmental event, which clients are increasingly interested in. Either way, we let our clients know about significant loss to their investment due to some kind of financial misconduct so that they can make an informed decision about how to recover.
Doing the right cases is important. Attorneys look at that. If a firm says they don't tolerate sexual harassment or sexual discrimination, then attorneys are asking, 'Can you demonstrate that in some of the cases that you invest time and money in to prosecute?'
We then analyze the case and present our findings to them with a recommendation of whether to move for lead, remain a passive class member or consider an individual action.
In the last few years, we've grown that portfolio monitoring service from about $2.4T to nearly $8T in assets under management.
LD: You’re also the Head of Client Services at Pomerantz. I find that impressive, because it's been noted that it’s often more difficult for women in the legal profession to network and build a book of business.
JP: You have to work twice as hard to prove half as much. I have sat in many scenarios with many bodies but where I am the only female attorney there. It’s still a male-dominated environment, but hopefully that’s changing so that there is more representation generally.
I think it’s empowering for our newer attorneys to come in to see that one of the more senior partners who runs the client services team, is female. There is this pervasive feeling in the industry that you have to choose between being a successful female attorney and being a full and present mother. I don’t know I always get the balance completely right but I hope I am still an example of not having to choose one path over another.
LD: That would go a long way in attracting female talent. How else does Pomerantz support their female attorneys and staff?
JP: It’s a great firm for women. I had two children very quickly after I joined the firm, and I'm a single mom. [Managing Partner] Jeremy [Lieberman] was really great about flexibility. My job involves a lot of travel, and the firm is really supportive about me having control over when those meetings are organized. Flexibility makes such a difference. It really helps me function at my best.
I manage my own teams now with the same flexibility. The PomTrack team is incredible, and they are majority female. I understand that I have to be flexible with them in order to keep them. Covid really showed us that we can work fine remotely. Many of us still like going into the office, so we have that balance now as well.
LD: Was it a deliberate move to have a majority female team for PomTrack?
JP: As they say, if you want something done, give it to a busy woman with no time.
JP: The team happens to be a majority female because the firm is very good about understanding how people work and adapting to what works well for them. Sometimes the best people for the job are women and sometimes those women have kids. Pomerantz is great about supporting the lifestyles of parents, so we can keep those good people on board.
It’s also a very diverse team, again, mainly because we found the best people and figured out how to create an environment that would encourage their best work and keep them around. It’s an important focus as well these days for funds – they want to know how diverse your team is. We do well on our diversity checkpoints on RFPs, but we were also a diverse team before diversity was being measured.
LD: What advice do you have for younger women starting out in the law on how to build their book of business?
JP: I would say, first of all, nobody is going to look out for your career except you. Find yourself a really good mentor. I have been incredibly lucky – I have had two strong mentors who happen to be male, and who are very encouraging about me being a full-time mother and a full-time, successful attorney. Find someone you admire, get in touch with them and ask them to mentor you. When I've had people reach out to me about being their mentor or for career advice, there is no greater compliment.
If you want something done, give it to a busy woman with no spare time.
Also, always give yourself options, whatever options look like to you. Negotiate your terms from the outset. Perhaps you want to have a couple of days a week when you come in late to work, after dropping your kids off at school. Say that when you first come in because it’s harder to start and then renegotiate.
And realize that these days, you don't have to choose. So don't feel that you do, because you can find good workplaces that want you for your skill and in exchange, they'll make some adjustments for you.
LD: That’s so empowering. How do you think law firms can encourage more women into leadership positions? Because that's another bit of a hole that we have.
JP: It's the same problem across the board, not just law firms. If you look at the way companies are structured, they lack female leadership at the top. Yes, there are a few female CEOs to speak of, but overall, the percentage of women in leadership roles isn't high enough.
So how can we fix that? There should be a better ladder of progression that utilizes, builds and identifies rising pools of talent. When considering how you can progress at a place of work, ask about the leadership structure of the company. Ask about career progression. Not just the time spent at a firm, but what indicators does this firm use to promote an associate to a partner, for example. And of course, asking how diverse the partners are is also a good indication of how that's put into practice.
The future of companies and law firms is going to hinge on really good, structured management. The structured management should represent the clients, the customers, just like the leadership of this country should look like the people that it represents.
LD: This would also apply to having more people of color in the legal field.
JP: Absolutely. You have to reflect what you're trying to attract. If you want more women of color, how can you outreach in that respect? You should have women of color high up in your firm. Outreach amongst peers, word of mouth, that’s crucial too. So you want to make sure you have a supportive environment. Diversity of color, sex, gender, educational background – what these really bring is diversity of thought to the table and that is what I want to see far more of.
Doing the right cases is also important. Attorneys look at that. If a firm says they don't tolerate sexual harassment or sexual discrimination, then attorneys are asking, "Can you demonstrate that in some of the cases that you invest time and money in to prosecute?”
LD: Your firm must do well in that regard. You do so much ESG work these days, especially.
JP: Yes, and our current case against Deutsche Bank is a good example. We’ve brought an action against the bank for their failure to keep proper tabs on their customers, which enabled the actions of people like Jeffrey Epstein and damaged the status of the bank.
The case is really striking a chord with a lot of us. I’m female, and I’ve got an 18-year-old daughter. The bank knew what Epstein was doing. They didn’t question his payments to these young women, all these red-flag payments. They didn’t do their due diligence. It really becomes personal. Those are the cases that keep us on our toes and keep us interested as attorneys. You need that passion and that fire to go after them.
LD: I can certainly understand that. Some lawyers really want to change the world and make a difference, and this is the kind of work that really does that.
The bank knew what Epstein was doing. They didn’t question his payments to these young women, all these red-flag payments. They didn’t do their due diligence.
JP: Exactly. And sometimes you can make such a small difference, but the impact is really large.
LD: How did you first decide you wanted to be a lawyer?
JP: I sort of fell into the law. At first I wanted to be a doctor, an anesthesiologist, but I didn’t get into my medical school of choice in London, so I changed course and went to law school. I worked for some really good firms in the UK and then was ready for a new challenge, something completely different. So I quit my job and came to Los Angeles with my then six-year-old daughter, the two of us. I said, if I pass the bar, I'll stay for a year. Then I said, if I get a good job, I'll stay for another year. It's been 12 years.
LD: How did you decide on this practice of protecting investors' rights? Or did that sort of come about as well?
JP: I did not know what securities fraud was probably 14 years ago. It’s a completely different system in the UK; there are some financial marketing acts, but it's not the same protections afforded by the U.S. class action system. So I had no real knowledge of securities fraud class actions before I joined my first firm here in the U.S. I started out in general litigation and moved into securities. I love the complexity of it, and the power it has to make change. At some point, I was asked to cover for someone at an event with clients and we quickly realized I had a knack for it and enjoyed it. So now I have a nice balance between client-facing work and my litigation practice.
LD: You mentioned the firm’s Managing Partner, Jeremy Lieberman, earlier. Can you tell us what you admire about him?
JP: Jeremy is a fairly young leader, comparing him to some other successful firm managing partners. With youth, he has brought a very positive leadership attitude. As I mentioned, he’s allowed me to work on the terms that have made me able to be a mom and an attorney. And I'm very grateful for that. He is also very good at listening to ideas. He's not set in his ways, he wants to hear other people's opinions. That's very important, because if a leader of a firm is only interested in his own opinion, then what's the point in having other attorneys?
Jeremy really appreciates diversity of thought. That is really, really important when you're strategizing about a case. You never want to exclude an important perspective. Jeremy’s truly skilled at listening to the views of the associates, of the partners and taking them on. He hasn't got that ego that you see with a lot of lawyers. He’s a genius in terms of how he prosecutes cases, he knows every detail about every case, which is amazing. But he still doesn't have an ego about it. He wants to hear what others have to say, he wants your opinion. It makes for the best kind of leader.