Seven years into mandatory pay gap reporting, Joanna Goodman reports on whether and how large law firms have used the data to narrow the gender divide
The low down
When large law firms were required to report their gender pay gaps for the first time in 2017, some kicked against the directive by leaving equity partners out of their calculations. Such firms were pilloried for the decision and U-turned under pressure. Since then, many are converts to the pay gap data, publishing more detail than needed, and adding other protected characteristics not required by law. Pay gap data for these firms has become vital management information, helping them understand their business and its people, and shaping strategy. But even though the gender divide is narrowing, progress appears slow. Some firms are going backwards.
Law firms with more than 250 staff have been required to publish their gender pay gap since 2017. But with a few notable exceptions, progress has been slow. There are multiple factors in play, and it is clear that rather than framing and explaining the statistics, firms have to make structural changes to bridge the divide and reward men and women equally.
According to the Solicitors Regulation Authority, the proportion of women working in law firms rose from 48% in 2015 to 53% in 2023. But while 60% of solicitors are women, there is still a significant seniority gap, which has narrowed only slightly since 2015: 47% of salaried partners and 32% of full equity partners are women.
Figures released by the Office for National Statistics (ONS) on 8 April show that in 2023/24 law was still lagging, with an overall gender pay gap of 17.6% for legal professionals, compared with 14.5% for the UK overall. Breaking down the figures for the legal sector, the gender pay gap increases with seniority, reaching 29% for barristers and judges (the third highest on the ONS list of occupations), 12% for associates and 10% for solicitors and lawyers.
Law Society president Nick Emmerson says: ‘The gender pay gap and its various causes remains one of the main issues facing women in the legal profession. However, there are positive signs of progress since the implementation of mandatory reporting in 2017. Some workplaces are analysing their pay gap data in greater detail, publishing further data on partner pay and taking action on ensuring the gender diversity of their newly appointed partners through recruitment and promotion targets.’
Most of this year’s published data is not encouraging, particularly at magic circle firms and US firms with London offices. Firms publish mean and median figures. Mean is the average gender pay gap figure for all employees in a firm; median is the employee in the middle of a list ordered from highest- to lowest-paid. According to the ONS, median figures are likely to be typical of an organisation because they are not distorted by very high or low pay or bonuses. However, bonuses are significant in relation to magic circle and other elite firms’ partner remuneration.
Firms are now publishing more detailed gender pay gap reports. Freshfields Bruckhaus Deringer reported a slight increase in mean gender pay gap from 53.2% to 53.5%, and a significant hike in the median from 14.8% to 46.1%. Clifford Chance reported its mean overall pay gap as 58% and its median as 40.7%, with partner pay gaps of 21.4% mean and 43% median.
Allen & Overy’s mean gender pay gap for UK partners and employees was 53.9% and its median was 44.4%. Linklaters appeared to do better, with a mean gender pay gap of 17.8% and a median of 33%, both lower than in previous years. However, gender inequality was exacerbated by bonuses: its mean gender bonus gap was 43%, up from 32.6% in 2022, and its median gap was 56.3%, up from 27.3%. Clifford Chance also reported a high gender gap for bonuses, with 45.7% (mean) and 51.5% (median).
Magic circle firms’ gender pay gap reports explain their disappointing data and trends in terms of the seniority gap – there are more men in senior management and fee-earning positions, and more women in business support, secretarial and other lower-paid roles.
Mid-size firms tend to report a lower gender pay gap, particularly national consumer-facing firms. For example, Leigh Day’s mean gender pay gap is 11.5% and its median is 14.4%. Many firms have made conscious efforts to move toward greater parity.
Case study: The cost of inflexibility
Megan Gray, an ESG knowledge lawyer at Charles Russell Speechlys, has written extensively about returning to her role as a corporate transactional lawyer at a magic circle firm after the birth of her daughter and having her flexible working request refused. In order to achieve an acceptable work/life balance, she left the firm for an in-house role before returning to private practice. ‘How can a firm possibly achieve gender balance at partnership level if it is not willing to make space for women to show up as mothers?’ she asks.
Gray agrees with Dana Denis-Smith of Obelisk Support that the gender pay gap has a disproportionate impact on mothers of young children because it affects their ability to pay for childcare. This catch-22 is exacerbated by law firms’ expectation that fee-earners work long hours, which forces new mothers into lower-paid roles, continuing the pattern of gender disparity.
Gray points to a number of ways in which firms should change to accommodate – and retain – working mothers:
- offer shared/gender neutral parental leave;
- offer, as standard, transparent alternative work models that do not require 24/7 working and provide some predictability in terms of flexibility and hours [to accommodate childcare];
- monitor and enforce reasonable working hours by limiting the number of hours that can be billed over a certain time period, to level the playing field and improve wellbeing;
- encourage non-contactable holidays and periods away from work; and
- normalise career breaks for other life occurrences – not just for parental leave.
Additionally, she suggests reverse mentoring to raise awareness of the challenges faced by mothers returning to work after maternity leave.
Structural change
While publishing gender pay gaps can incentivise change, this is clearly not the case with magic circle and big US firms operating in London. There are initiatives and support groups, but these are clearly not enough to quickly make a significant difference.
Emmerson acknowledges the problem: ‘There is still work to be done as women continue to face bias, the prospect of an unachievable work/life balance in exchange for senior progression and the challenge of navigating often male-oriented promotion paths while facing a lack of support around maternity leave, return to work, flexible working and shared parental leave.’
Dana Denis-Smith, founder of equality for women in law campaign group Next 100 Years, and founding CEO of resourcing platform Obelisk Support, says that focusing on data rather than strategy is one reason why the median gender pay gap has not narrowed. She references research conducted by Obelisk Support and Gapsquare in April 2022, which estimated that at the current rate of change it would take 86 years to close the mean gap and 40.6 years to close the median.
Looking at this year’s figures, Denis-Smith comments: ‘The trend is that not enough is being done – some of the big firms are going backwards, and discretionary pay is used to create a wider gap.’ One reason for this, she alleges, is that the bigger firms are focusing on explaining away their gender pay gap rather than making the structural changes needed to address it.
Denis-Smith highlights three barriers to change that were identified in the 2022 report:
- Lack of transparency in areas of reward and career progression (for example, how bonus payments are an additional source of inequality);
- Preoccupation with experience rather than work rate when making promotion decisions (which penalises mothers for taking time out to raise children); and
- The position of senior leadership (making the gender pay gap a priority for senior management).
While mandatory reporting forces at least an element of transparency, ‘again we are distracted by monitoring and fiddling with percentages’, Denis-Smith says. ‘Ten years ago when I started First 100 Years [the initiative that preceded Next 100 Years], firms were talking about having 1% more women partners, whatever that meant. Now we are in the same place with the gender pay gap. This kind of historical problem isn’t addressable through this kind of micro fine-tuning; it needs a big structural shift.’
'How can women be tomorrow’s leaders when they don’t have a fair chance of promotion? There is some kind of assumption that because women are the majority of lawyers it will happen organically – but it won’t'
Dana Denis-Smith, Obelisk Support
But, she says: ‘When you ask firms what they plan to do about the underlying structural issues that are causing this [inequality] they say things like “we need more women leaders”. If you need women leaders, you need to give female partners the meatier clients and a career path to show their full worth, instead of finding ways to clip their wings. Firms are in a vicious circle of explaining gender inequality away.’
Gender inequality is exacerbated by law firm structure and culture. Denis-Smith is concerned that junior lawyers are afraid to speak up, and women leaders are not as vocal as they could be. ‘How can women be tomorrow’s leaders when they don’t have a fair chance of promotion? There is some kind of assumption that because women are the majority of lawyers it will happen organically – but it won’t,’ she says. She adds that the danger of letting things evolve organically is that eroding women’s pay and the value attached to women lawyers will diminish the status of the profession.
Promote the right people
While there is much focus on careers being damaged by taking maternity leave (see box, above), Denis-Smith believes that women lawyers should be paid what they are worth so that they can afford childcare. This, along with introducing flexible career structures that enable mothers to work towards partnership if they want it, will help to improve retention, reduce inequality in partner promotions and develop future female leaders.
However, this vision of a rosier future is jeopardised by promotion strategies and career paths that continue to direct women returners towards support functions. ‘For example, when firms announce that they promoted a woman professional support lawyer (PSL), who recently returned from maternity leave, to of counsel or something, when a man was promoted to partner, I wonder how that sits with the women associates who work through until 5am but are not promoted to partner, and a PSL is promoted to a higher role than the women who are making the firm the money to pay her. Promoting women into stereotypical support roles rather than promoting women lawyers into the crucial roles that create the business case and the track record that they need to be considered for partnership.’
A low bar: barristers
New research from the Bar Council reveals that the gender pay gap for newly qualified barristers with up to three years’ post-qualification experience is 13% – a divide unrelated to caring responsibilities. Analysis by practice area shows some variation, ranging from 4% in family to 17% in crime and personal injury/professional negligence. Women account for 50% of pupils and 38.7% of barristers, and about 80% of barristers are self-employed and work in chambers.
The report, New practitioner earnings differentials at the self-employed Bar, follows last year’s Gross earnings by sex and practice area at the self-employed Bar 2023. The latter found that the gender pay gap is evident at the beginning of barristers’ careers. It combines analysis of gross fee income data with in-depth interviews to understand the factors behind the gap, and explores how to help newly qualified barristers actively manage their practice.
The gender pay gap can be linked to a series of obstacles to women’s career development, including work distribution, client briefing practices, returning to work after maternity leave and retention. The report’s purpose – and the challenge for the Bar Council – was ‘to identify ways… to support women’s career progression and development in a majority self-employed profession, and within the chambers model’.
Key recommendations for barristers and chambers involve actively managing practice and career development through earnings data analysis, having policies in place to monitor ‘led’ work, and undertaking regular practice reviews. The Bar Council provides an earnings monitoring toolkit and a practice review guide to support these activities.
Sam Townend KC, chair of the Bar Council, said: ‘The earnings gap between men and women at the self-employed bar is a structural problem that presents a collective challenge for the bar… All the evidence we found suggests that positive practical and evidence-based conversations need to happen right from the start of a barrister’s career to support the development of a thriving practice.’
Partnership
Promotion to partnership depends on the power structure within the business, Denis-Smith explains: ‘It’s not just about economic value – whether you will be allowed to build enough business to be considered for partnership – but to get to that point, you’ve got to go through the stages of junior and mid-level associate, where you depend on the partner feeding you the work, on their view of you, how they work with you and whether they want to work with you. At the end of the day that’s where the pay reviews and discretionary bonuses are.’
Emma Wright, head of Harbottle & Lewis’ technology, data and digital group, leads investHER-UK, which highlights gender inequality in tech and finance. She agrees that a firm’s gender pay gap is heavily influenced by where power is concentrated. This is not always apparent from pay gap data. ‘A firm might have a lot of female partners, but if they are all junior partners, the power could still sit with a group of men.
‘I have been practising law for nearly 25 years and I haven’t encountered a law firm which doesn’t have a group of men holding a lot of power.’ Wright says that changing law firm culture will require critical mass. ‘One woman at the boardroom table cannot effect change – you need at least three.’
Another issue is that senior associates and junior partners have very little control over their practice and thus struggle for recognition. ‘For example, Chambers’ list of global AI lawyers doesn’t include one woman,’ says Wright. ‘And the legal directories are one way of growing your practice. As you get more senior you get more control – there is an inflection point to get over at about eight years’ PQE.’
Wright believes the gender pay gap is partly a generational problem: ‘I wonder whether we will see a change when the older generation of partners retire. Flexibility is already a bit more intrinsic. If [my team is] involved in cutting-edge work with tight timeframes, I swap people in and ensure we have enough resources to allow flexibility, but that means you have to be willing to write time off, so the problem goes back to the billable hour.
'I have been practising law for nearly 25 years and I haven’t encountered a law firm which doesn’t have a group of men holding a lot of power'
Emma Wright, Harbottle & Lewis
‘In my experience of young mothers returning to work, none of them want to work less, but childcare means they have a hard stop at 6pm, for example, and that brushes up against law [firm culture] because law is traditionally a long-hours profession.’ This impacts on the retention of female lawyers, as illustrated by Megan Gray’s experience.
What is the answer? Female leaders have to set an example. ‘Female equity partners and heads of teams are role models,’ says Wright. ‘If I have to leave at 5:30pm to catch a train, I say goodbye. I want people to know when I am leaving.’
Denis-Smith believes that succession-planning will help larger firms close their gender pay gap. ‘Change will only happen if the people leading firms commit, and we all work together to make law a better, more equal place. It’s about trusting women with big clients and work, and including them in the bigger conversations so that they can own the next power round, because this is all about power alignment.’
Women also need to be strategic about the future of the profession. ‘Some [women] opt out of the traditional [law firm] model, and create a peripheral economy. But you can’t change the system from the outside,’ Denis-Smith warns. ‘I want women to be strategic too. Let’s define what “good” looks like and ask for it, otherwise we will always be setting up our own firms that don’t scale. Systemic change requires multi-pronged approaches and the big firms have to be part of that.’
What does ‘good’ look like?
It is unclear whether Wright Hassall in Leamington is the only UK firm with a negative median gender pay gap because firms with fewer than 250 employees (it has 178) are not obliged to publish gender pay gap data. In the past four years, Wright Hassall has focused sharply on equal pay and recognition. In that time the firm’s median gender pay gap went from 40% to -22%, its mean to just 2.2%, while its leadership team and partner group have attained gender equality.
The firm’s chief people officer Mark Shrimpton explains that this involved keeping the gender pay gap at the forefront of the firm’s priorities. ‘We have regular meetings so that we understand where we are, and make sure our recruitment is on track in terms of gender and salary,’ he says. ‘We have two promotion rounds a year, and part of our calibration is to ensure consistency across different roles and genders.’
As well as closing the gender pay gap, Wright Hassall transformed its gender profile by leveraging lawyer turnover. When longstanding partners retired, the firm was able to recruit and promote strategically to ensure a representative gender split. The continuation of flexible/hybrid working following the pandemic supported these efforts.
‘Although we expect people to come into the office, and we don’t want anyone working completely remotely, we can be flexible and that has allowed us to retain talented people and promote female partners,’ Shrimpton explains.
Another critical success factor was developing a culture of openness and communication between lawyers, partners and management. Measures included implementing clear, objective career and promotion structures, new bonus schemes, family-friendly working policies and publishing an equality, diversity and inclusion charter to ensure that the firm’s commitments remain top of mind and gender pay gap ratios are maintained.
Wright Hassall’s approach embodies the Law Society’s strategy and guidance on gender equality. ‘Organisations that embrace… non-male-oriented methods of working are being rewarded with increased employee retention, enhanced productivity and greater diversity at all levels, including at partner level,’ Emmerson concludes. ‘We urge our members to sign up to our Women in Law Pledge under which signatories commit to a range of things such as senior-level accountability for progressing gender equality, setting targets for women at senior levels and creating a culture that is inclusive and free from bias.’
Joanna Goodman is a freelance journalist
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