Gender pay gap: reporting is vital in the fight for equality
Pay transparency should not be limited to the early years of lawyers’ careers but apply right through to partnership, argues Dana Denis-Smith
L ast month saw UK companies with over 250 employees required to publish figures detailing their gender pay gaps. This includes large law firms, many of whom don’t come out of the process terribly well, particularly once partner figures are included. The likes of Freshfields Bruckhaus Deringer reported a combined median pay gap of 57.6 per cent, Baker McKenzie, 39 per cent and Ashurst, 40.7 per cent. Such discrepancies show there is still considerable work to do in the fight for equality. There is a great deal of scepticism about the value of these statistics, not least because firms argue they are skewed by the fact firms employ far more women than men in lower paid, nonmanagerial roles and have partnerships dominated by men, particularly at the very top. This makes it harder to compare like with like. There really shouldn’t be any excuses made for such large differences between men and women working in the legal profession. These arguments simply highlight the deep-seated problems we face. Firms are trying to address the lack of female partners in their ranks, but they also need to get to grips with the problem of pay inequality, reviewing their pay structures to ensure that everyone at the same level is paid the same. I was pleased to see that, having resisted last year, law firms are choosing to include partners in their statistics even though they are not legally obliged to do so. A lack of pay transparency is one of the main barriers for women and gender pay gap reporting at all levels is vital in the fight for equality. For lawyers in private practice there is a high level of transparency at the beginning of their careers, particularly when compared to other industries. Everyone knows the salaries each firm pays to trainees and how this increases each year post-qualification. Given the structured nature of legal careers you would expect this to continue to senior levels but this is exactly where the pay gap widens. Getting the figures out there puts businesses on the spot and gives visibility to the problem of pay disparity. We saw last year how the intense scrutiny placed on the BBC after it published its pay gap figures has driven change at the broadcaster, with more women promoted to top jobs. Reporting gives firms an incentive to change and gives employees and clients the knowledge they need to make informed decisions. With this knowledge, action must follow. It is not good enough to say that a woman who has been recruited was paid less in her last role so should start at a lower salary than male colleagues. CEOs and managing partners must have transparent pay structures that ensure they pay everyone equally if they have equal value to the business. I would also like to see the results of pay gap reporting drive client buying decisions – that is how we will see real change. While senior inhouse lawyers have publicly stated they will insist on diversity from the law firms they instruct, on gender pay gaps many find themselves in companies that also face this problem. This means they are less likely to put their heads above the parapet to demand change from their suppliers. The publicity generated by reporting also raises awareness amongst women of what their rights are and how their own firms perform. Women at poorly performing firms need to speak out and demand equal pay when they know they are being paid less than men – it is after all against the law. If they see they are being undervalued they should consider looking elsewhere. In the short term, there is a financial incentive for paying women less. Accessing the same skills at a lower cost makes for larger profits. Long term however, firms need to wake up to the fact that ensuring equal pay will benefit their businesses. It means attracting clients who want to see gender equality at their chosen law firms and attracting and retaining talented women who, if they see they are not being remunerated as well as the men doing the same job as them, will vote with their feet.