Non-compliance with diversity data collection is not an acceptable option

The deadline for law firms to report their aggregated diversity data to the Solicitors Regulation Authority (SRA) was 31 January 2014, but by that date only four out of five firms had done so. Those that have not lodged their data are putting themselves at risk of being found in breach of Principle 9 and chapters 2 and 10 of the SRA Handbook. So why has there been such an apparent hesitancy to engage with the survey process?

For the majority of firms, the collection of diversity data is still a relatively new experience and some have not taken to it kindly, with some taking to social media and blog sites to express their concerns and opposition.

Data collection

The requirement to collect, report and publish diversity data came about after a consultation process that was undertaken in 2011 by the Legal Services Board (LSB). The stated aim for collecting and publishing workforce diversity data from firms is to "gather evidence about the composition of the legal sector workforce across a wide range of diversity indicators, to enable firms and regulators to make informed decisions about actions needed to encourage greater diversity in the legal profession and to achieve transparency about the workforce diversity of individual firms".

When the LSB diversity consultation was undertaken, many organisations provided responses and raised concerns over the process and how the published data could be misinterpreted by those who would use it to make regulatory and consumer decisions; others felt that the survey process would be seen by employees as an invasion of privacy and that their diversity information should be of no concern to others.

In reply to some of the concerns raised during the consultation process the LSB said that although firms would be obliged to offer a survey, and to report and publish the aggregated data, employees would not be forced to complete the survey and would be able to choose 'prefer not to say' if they so wanted.

The concern for many firms came about when the LSB said that a lack of employee responses or too many employees choosing 'prefer not to say' could be taken as an indication that the firm had a questionable diversity culture. Many firms said that it was not their culture that would lead to the non-engagement of their employees, but their employees choosing to exercise their human rights not to disclose sensitive personal information.

The new regulatory requirement to collect diversity data was eventually implemented by the LSB and was left to the underlying regulators, including the SRA, to ensure their regulated communities complied in an appropriate manner.

Diversity compliance

Firms should not just see the diversity survey as 'ticking' a compliance box, they should also be looking at the wider benefits an effective equality and diversity strategy can bring, but when a report talks about "holding firms to account" for something that is optional for their staff to complete, it should not come as any surprise if some firms then see this as just a compliance issue.

When looking at the various survey completion rates quoted in the LSB's 2013 report detailing regulators' progress against its guidance issued in July 2011 under section 162 of the Legal Services Act 2007 (five to 56 per cent), there is clearly room for encouraging more staff to complete surveys, but many could say that trying to hold a firm accountable for the personal choices of their employees is not the way to do it.

One of the key issues firms have to consider when looking at the publication of their aggregate diversity statistics is data protection, especially where the publishing of such data could lead to the identification of staff, even from anonymous responses.

Many firms, in their rush to comply with their SRA obligations, have published their data without realising that they also have obligations under the Data Protection Act (DPA) and have published their data without carrying out a risk assessment first.

The SRA has stated that the DPA takes priority over its requirements in relation to publication and that if a firm is of the view that there is a risk of staff being identified it can take steps to avoid this, including not publishing the data.

Firms should do what they can to encourage engagement with the survey process but, if after this, staff still choose to exercise their right not to complete the survey, or select 'prefer not to say', then at least they can show they have done their best to "encourage an independent, strong, diverse and effective legal profession", which is what the regulators are trying to achieve.

It is clear some firms are unhappy with the requirement to survey their staff, but whether they like it or not they must comply with their regulatory obligations or face the consequences. At the start of this year, the SRA said that 2014 would be the year for enforcement, it also indicated that it would consider making examples of non-compliant firms; with such warnings being given it is clear non-compliance is not an acceptable option.