Examining Gender Pay Gaps in Law Firms - PUSTAKAGAYO

With the increasing focus on diversity within the legal profession, a growing number of firms are now openly addressing their gender pay gaps. Let's delve into this matter further.

Background

Historically, the legal profession has lacked diversity, and major UK law firms, along with other large businesses, were obligated to publish data on gender equality for companies with 250 or more employees. Unfortunately, the initial findings from these publications were disheartening.

However, in recent years, there has been a shift as firms have started setting concrete goals to enhance diversity, particularly among senior lawyers. Though achieving complete equality or equity is still a work in progress, the data indicates a gradual but positive trajectory in the right direction. Nevertheless, it's crucial to acknowledge that most reports continue to adhere to a binary gender classification, despite the importance of recognizing and discussing genders beyond this binary system.

While solicitor salaries remain notably high overall, with an average of £50,000 per year (nearly double the UK's average salary of £26,000) and reaching six figures for NQ levels in large City firms, it's intriguing to examine how these salaries are distributed, especially among senior ranks.

The Statistics

The Law Society has taken over the responsibility of producing the annual overview report on the gender pay gap in the legal industry, which was previously handled by the SRA (Solicitors Regulatory Authority). Here are some key findings from the latest report:

• The mean gender pay gap has reached its lowest point in recent history, standing at 11.3%.
• The median gender pay gap is now at 4.7%, significantly lower than the UK average of 14.9% across all industries.
• A higher percentage of female lawyers (89.3%) received bonuses compared to male lawyers (84.1%).
• The number of women in the legal profession has slightly decreased.
• Women still tend to occupy lower-paid roles in the industry more than men.

It's essential to consider the variation in gender pay gaps between firms, particularly with larger firms showing larger pay gaps, especially at higher levels such as partnership. Here's the latest data available for the Magic Circle firms, ranked from best to worst based on mean gender pay gaps:

• Clifford Chance: 63.5% (decrease from last year - 64.9%)
• Linklaters: 60.1% (decrease from last year - 61.7%)
• Allen & Overy: 55.7% (decrease from last year - 59%)
• Freshfields: 53.2% (increase from last year - 52.1%)
• Slaughter and May: Data currently not available

Comparatively, these gender pay gaps are relatively low compared to the banking industry but quite high when compared to the big four consultancy firms, as reported by the Financial Times in a detailed statistical comparison among comparable industries.

It's important to note that mean and median gender pay gaps are distinct concepts – for median gender pay gaps, Freshfields historically touched 0% last year. The presentation of this data is increasingly important to scrutinize.

How to Increase Gender Diversity in Law Firms

Various strategies are being implemented to narrow the gender pay gap in the legal industry.

Start at the top

In the legal profession, women are frequently overrepresented in lower-paid positions, such as paralegals or personal assistants. While pay for trainees and associates is standardized regardless of gender, using the lockstep model, salaries at the partnership level exhibit more significant disparities – leading to a decline in female salaries. Addressing this issue at the partnership level becomes crucial as it represents the primary area where action is needed to tackle the problem effectively.

Change attitudes

Initiating change must begin from the highest level – according to a recent survey, 62% of employees expressed that senior management at their firms do not prioritize addressing the gender pay gap. Industry leaders must take the lead in steering their organizations toward the right direction and fostering a culture of equality across all staff.

Increase transparency

The greater the number of conversations people engage in regarding the gender pay gap, the more progress we can make in resolving it. The legal industry is often not transparent about salaries at the highest levels, and bonuses add further complexity. Encouraging open discussions, both within the workplace and in public gender pay gap reports, will always be beneficial in advancing towards a positive change.

Performance over experience

Focusing solely on years of experience can provide insights into a lawyer's expertise based on their deal history. However, it can also result in wider gender pay gaps, as female lawyers tend to experience reduced work hours during pregnancy, maternity leave, and subsequent part-time arrangements. Although the outdated notion of choosing between motherhood and a legal career is mostly in the past, salary discrepancies often persist and reflect these historical patterns.

Diversity amongst practice areas

Certain practice areas, like family law, have a higher representation of women, while others, such as financial and banking law, have a higher representation of men. The practice areas with higher salaries often exhibit a more male-dominated workforce, likely stemming from outdated attitudes.

Future Outlook

The overall statistics show a positive shift in the right direction. However, more decisive actions are still necessary. Notably, the disparities among senior staff are significant, and there are concerns regarding how firms present their data, sometimes using mean and median statistics in a way that may not accurately reflect the true situation. It is essential to delve into these discussions by considering factors like practice areas and firm types. By implementing appropriate measures, such as promoting changes in senior management attitudes and enhancing salary transparency, the gender pay gap in the legal profession is likely to continue decreasing.