Gender pay: a common cause

Two bowls of similar-sounding alphabet soup have dominated legal news in recent months: GDPR and GPGR. There probably isn’t a solicitor in the country who hasn’t undertaken a CPD event on the coming data protection revolution, but GPGR (or gender pay gap reporting) has kept many lawyers busy and many law firm PR teams awake.

A number of firms employing solicitors in Scotland reported. The trend was as per the wider economy: the average woman working in the legal profession earns less than the average man does.

This is a common problem across the sector and not just for organisations employing 250 or more people. While it is positive to see each firm propose solutions they think will work for them, surely a common problem would be more easily solved together? If something works for one firm, let’s shout about it and share it: a more equal and diverse profession benefits us all, and benefits clients and the public too.

Our caveat to begin with

We are both in favour of gender pay gap reporting, but we also recognise that the GPGR should never be the sole measurement of equality within an organisation. However, it is a very important starting point.

The care sector, for instance, has a negligible pay gap because it is female dominated. That does not mean that it should be seen as being at the vanguard of equality. Neither should the financial services sector be seen as underperforming on equality simply because its pay gap sits at 39%, given the wide range of equality initiatives that the sector is involved with.

When you drill down into why a pay gap exists, the most commonly used justification by employers is the distribution of women in their workplace. Drill deeper and there are many reasons why women are failing to progress to senior management, or cluster in lower-paid jobs in the caring, cleaning or catering sectors. The discussion then becomes about the problems with progression (and its pace for men and women), expectations of genders, how we accommodate motherhood and gender stereotypes of roles.

Turning to a non-legal example, most people understand that an airline might have a gender pay gap because men are more likely to be pilots (a higher-paying role) and women more likely to be cabin crew (a lower-paying role). Similarly, looking through the reports that law firms filed, there are frequent references to their pay gap existing in part due to those in lower-paying administrative or paralegal roles being women. Part of the reasoning behind gender pay gap reporting is to prompt a discussion. Why, when we think of a pilot, do we think of a man? Why do we think of administrative staff and paralegals as women?

Here’s what we think we know

It is widely acknowledged that law firms in Scotland (and beyond) have a progression problem with women. Women are under-represented at senior levels, accounting in Scotland for 28% of partners despite having significantly outnumbered men into the profession at entry level for more than a decade. But is it really as simple as that?

Here’s what we really don’t know

The elephant in the room is partnership. The regulations did not require partnerships to report earnings, although some firms across the UK chose to. The decision by EY and Deloitte to republish their figures to include partner earnings prompted others to republish theirs. Comparatively few published their earnings in a way where readers could see the total pay gap in the profession. In Scotland, only Thorntons did. We have no sense of what the true picture really is regarding gender representation in the top quartile of earners, and no real picture of the pay gap taking into account the full distribution of earnings. When it comes to the top quartile figures, these reports generally include senior associates and the senior people in business support roles.

Looking at Thorntons, its figure increases from 37.2% to 55.2% when partners are included. It is likely other firms would see similar movement and it is possible that the Government will change the regulations. In March, the Law Society of Scotland wrote to all law firms operating out of Scotland suggesting they voluntarily publish their partner figures. It will continue to ask them to do so. If corporate clients are publishing a pay gap figure that includes their top earners, why should the operating model of a law firm preclude a similar approach to transparency? It is a reputational issue.

Let’s talk solutions

In our view, the more important discussion is not about the size of the gap, but rather why there is such a poor rate of female progression in law firms, and what firms will do next to narrow their pay gap. It was heartening to see so many positive solutions being mooted by firms:

• Burness Paull committed to an “initial target of 30% of the partnership being female by 2020”.
• Pinsent Masons will investigate whether the structure of its bonus scheme is unintentionally contributing to its gender bonus gap.
• Shepherd & Wedderburn intends to undertake a survey of all colleagues to identify and address professional and personal barriers to progression.
• Thorntons is planning to develop the role of the promotions board to ensure there is clear guidance, and to have greater transparency in salary structure for all employed roles.

The following common themes emerged from reviewing the gender pay reports across the profession:

• promoting the importance of gender equality to all staff;
• improving their agility and flexibility of working;
• undertaking leadership development training for women at associate and senior associate level; and
• developing unconscious bias training and/or a mentoring network. 

Practical steps?

One solution to which all firms should give serious consideration is adopting the Society’s 10 equality and diversity standards. It was great to see one firm (Thorntons) highlight that this was an ambition for the next year.

These standards were produced a number of years ago by the Society. It would be fair to say that takeup from the profession has been lower than we might have liked. Looking at those standards, in light of the stories that have come out of gender pay gap reporting, it is clear they help form a clear pathway for practice units to improve equality, diversity and inclusion. They are scaleable (not just for big firms), and the Society is very happy to advise on how you can comply.

As well as the standards, the Society has an equal pay toolkit that is really worth a look at. It was developed to look at the unique issues that exist in private sector pay and individual rates of pay, since many of the existing audit materials focus on pay grades and tend to have more of a public sector focus.

Is this the start of a cultural shift?

In our view, how we balance work, family and caring is at the heart of solving this issue. Wholescale change of this nature will involve seismic shifts in shared parenting and childcare. These are long-term issues and not within the gift of one law firm alone. For those firms that provided the information, the gender balance of part-timers working in law firms was a stark reminder of how reduced hours, often for caring reasons, disproportionately fall on women.

In our 2013 Profile of the Profession, 9% of men worked part-time whereas 24% of women did. We think there needs to be movement on these figures on both sides. At the same time attitudes toward the commitment of part-time workers need to change. Research carried out in 2015 on patterns and perceptions of working patterns in the Scottish legal profession suggested a strong overtime and presenteeism culture. The authors reached the following conclusion:

“The results of this research would suggest that the culture of extensive overtime has become endemic across the profession. This is having a detrimental impact on the work-life balance of practitioners and has also led/contributed to presenteeism.”

We would like to see firms address these issues at a structural level. While huge steps have been made in relation to flexible working, it is often below partner level or at the expense of promotion. There needs to be a cultural shift to recognise that part-time lawyers (largely female) are just as committed as their full-time colleagues, and equally worthy of promotion.

Whatever reason works in terms of driving change in law firms, whether the social justice argument, the economic case for diversity, the need to be an inclusive profession or a client pushing for change, we would say that all of these are valid.

At its most basic level, this is about common sense and decency. The “leaky pipeline”, where women jump ship because they are not being promoted to partners, means firms are losing valuable talented women who are not operating at their full potential.

See also this month’s Employment briefing.