Diversity in the workplace is encountering a significant shift from being a moral nicety to a serious threat to profitability and competitive advantage. Whilst very much on the radar, progress has been slow, but with commercial success now at stake, firms really need to start making important changes.
Various reports have highlighted the lack of diversity in our law firms. In a report last year, Women Count found that there had been no progress in gender diversity in the last three years; the percentage of women on executive committees of FTSE 350 companies had remained at 16% and the percentage of female executives on boards had faired even worse remaining at a meagre 7%. To add to this discouraging picture, the 2018 Gender Pay Gap revealed that some law firms had a median pay gap of over 57%. This figure includes partners whose inclusion in the study was initially absent before being pushed for by many of the firms’ clients.
For those trying to achieve a 30/70 split by 2020, a report by McKinsey has shown that for the top 37 firms in the UK, they would need to hire 323 female partners. Their research has shown that while the male to female ratio is approximately 50/50 at associate level, the decline in female representation starts at 7 PQE. This puts most women in their early thirties and while we recognise other factors may be at play, this is also the age where many people choose to start families.
Time to change
This state of affairs is in stark contrast to the diversity demands from clients. More and more clients want to see women on their teams. Clients expect to see women at pitches and often check that they will be working on their cases too.
Lorna Fitzsimons, Co-founder of The Pipeline (a programme helping companies achieve their gender diversity goals) said, “This is an issue of competitive advantage and profitability which is echoed throughout the FTSE 350. Companies who have at least 25% of women on their executive committees have the potential to benefit from 5% greater profit than companies that have no women. This adds up to a £13bn gender dividend for all of Corporate UK performing at the same level on gender diversity”.
What can be done?
The situation is complex and answers are difficult to find. How can an industry where performance and success go hand in hand with long and often unsociable hours be conducive to family life? Some firms have set quotas for female recruitment, but this can often lead to forcing the wrong person into the role or leaving deserving women worrying that they are only there to meet statistics.
There is currently much discussion and good intention, but could
demand for diversity directly from law firms’ clients be a powerful enough
catalyst for actionable change?
We speak with female lawyers in the hiring market every day and the main resounding point of concern is the pressure around business development and entertaining clients during unsociable hours. For many, this would be time outside of their normal working day and when they would want to be at home with their families. The focus on hours extends to expectations of being contactable 24/7, and hours worked being a key performance indicator in reviews.
An industry wide re-think on hours spent in the office or entertaining clients could help address this not only for women but for men. Commitments to what constitutes as an urgent need for out of hours contact, the encouragement of business development during working hours with lunches, set parameters for out of hours entertaining, and focus on performance and efficiency as opposed to hours worked, could support a better work life balance. This would also prevent the burn out and other mental health issues that are becoming more prevalent across both sexes.
Taking time out
When women go on maternity leave, a common concern can be the erosion of relationships with their clients. Could firms address this by giving women more of an opportunity to stay in touch while they are on maternity leave? Sarah Chilton, a partner at CM Murray suggests, “invite them to lunches and events…writing articles is something easy to offer women on maternity leave…it keeps their name in the market”.
This approach may also aid in soothing the concerns of those who choose not to have children, who can feel a certain injustice when their peers are out on maternity leave and they remain working full-time.
Paths for progression
In many firms the philosophy regarding progression is ‘up or out’, and firms are losing talented employees because the current requirements leave them feeling like there is no other option than ‘out’. An idea could be to tackle this early on by setting out clear paths for different types of progression, available to both men and women.
The “Of Counsel” role was introduced as a potential solution as it can offer a senior position without the pressure of business development targets. However, there have been questions around the long-term viability of this role from a cost perspective. Perhaps there could be two separate targets for making partner; with one more focused on the client development side and the other on the management/strategic side, potentially helping to encourage people into the right roles; after all, great billers don’t always make great managers.
In addition to this, a number of firms have led the way in creating mentoring schemes which aim to help develop individuals’ personal brands both externally by encouraging them to be bold with regards to client development and internally by giving them the confidence to put themselves forward for partnership.
Firms have a duty to show women that there are ways to be successful lawyers without having to sacrifice family life, fall into an unfulfilling support role, move to a more flexible in-house position or leave the profession altogether. The knock-on effect of this will be more women in management roles making it work and providing inspiration and empathetic solutions.
We have seen successful examples of partnerships where one side focuses on delivering the work and maintaining existing client relationships while the other courts new clients. We are also seeing much more flexible working, working from home and even examples of part-time partners. One law firm provided the example of one particular partner who “leads from the front” by working one day a week from home even though he has no need to and encourages all of his team to do the same.
Fine-tuning is required but with a combination of addressing hours, maternity leave and paths for progression, with a commitment to making it work, these could prove to be viable solutions.
Law firms could be fearful of the impact these changes would have on their clients, but we know that diversity is becoming increasingly important to them. With the proposed industry wide standards, careful management, cultural acceptance and an understanding of the benefits this change brings, more women will progress in the profession and ultimately provide the diversity demanded.
There are no easy answers but with a greater spotlight on diversity than ever before, to the extent that it is becoming a contributing factor to winning or losing business, now is the time to really shake things up, look at the very composition of the industry and make progressive changes. This will benefit men, women, clients and the next generation of lawyers.
Innovative thinking must give way to old school rigidity in “this is the way we’ve always done it”. These are exciting times; more can be done. The most successful firms will be the ones at the forefront of this movement; attracting talent, retaining talent and giving them competitive advantage and the better quality of work diversity is proven to give.
Diversity is a subject that we as a company are very passionate about. We speak about it regularly, work with our clients to deliver for their firms and instil it in our own culture. If you would like our support, advice or access to our excellent network of lawyers, please do get in touch.