A merit-based promotion system can increase gender diversity in law firms

Recruiting and retaining the best talent in law firms is one of the most challenging management conundrums for the managing partner and the wider management team. Last year, women accounted for only 17.6 per cent of partners in the UK legal profession (up just 1.6 per cent from 2006) and only 13 per cent of equity partners in the top 20 firms (with some of these firms at less than 10 per cent). Regardless of gender, the wealth of talent within law firms should be encouraged and developed. How this is best achieved is the subject of intense discussion.

In 1987, we appointed our first female partner; Figure 1 shows the progress we have made since then. In terms of remuneration there is, admittedly, a small gender pay gap – in favour of the female partners. We are one of many firms making progress in gender equality, but more needs to be done across the profession.

Increasing diversity

From a management perspective, it is good business sense to have more women in senior positions within law firms. Research by the Norwegian School of Economics found that having more women on the board makes for a more profitable business, resulting in greater sales growth, return
on equity, assets and invested capital.¹
Similar results were found by Thomson Reuters, which found that the average
stock price of gender-diverse corporate boards outperforms that of boards with
no women.²

Various firms have created targets for female representation at equity partner and/or board level to be achieved over the next four years and, in some cases, an indeterminate period. Targets rather than quotas seem to be preferred – perhaps because the latter connotes inflexibility and a consequent reduction in the relevance of individual merit in the promotion process.

Survey results suggest that quotas are far from being universally supported by female solicitors. No one, male or female, wants their promotion to result from or to be regarded as resulting from anything other than their own merits and effort. This is a real factor which managing partners will be aware of if they are considering setting targets or quotas; they want those targets to be filled based on merit, not simply for appearances. That’s why, at our firm, we advocate and utilise a purely merit-based system, which has served us well.

The setting of targets does, however, make a public declaration of an intention to change. For firms whose statistics are currently less than flattering, that must surely be a good thing. If nothing else, it creates some form of public accountability. Public comparison must also play its part – law firms like to do well in league
tables and in the legal press.

The future

Not all of the delay in progress can be blamed on individual law firms or the profession as a whole. But, the pace of change is substantially slower than it
should be and the profession and
individual firms must take responsibility
for the current situation.

We should encourage more women partners at board level to mentor and encourage younger women entering the profession and their firms. It would then become a natural part of the culture of the profession and law firms to see younger women rising to the top and, importantly, wanting to stay in the law. This is the kind of culture we have built and continue to build at my firm, without any need for
formal quotas or targets.

Managing partners must have a 360-degree view of what is happening around them, as outside changes will impact on what is happening within the firm. Flexible working and implementation of good policy are vital to advancing this objective. Increased female representation at partner and board level will result in a virtuous circle and a world where targets are no longer necessary: the playing field will be as level as it reasonably can be and the rewards will go to the people who most deserve them.

Martin Arnold is managing partner at Wedlake Bell (www.wedlakebell.com)

Endnotes

1. See ‘Research shows profitable companies have more women on the board’, Charlotte Clarke, Financial Times, 25 July 2013

2. See ‘Gender diversity in boardrooms improves financial performance’,
Manju Manglani, Managing Partner, 13 July 2013