Unequal opportunity

Partner Michael Burd of Lewis Silkin explores the requirements and challenges of gender diversity for law firms in Europe

The issue of diversity in law firms has become increasingly topical over the past few years. It is particularly important in the UK in light of the Legal Services Board’s proposals for compulsory reporting of diversity statistics and the Solicitors Regulation Authority’s focus on diversity as part of its upcoming move toward outcomes-focused regulation.

It a common theme across the rest of Europe too – particularly in relation to the representation of women at partner and senior management level in all types of legal practices.

The position with regard to female lawyers is fairly clear. Women make up a large proportion, if not more than half, of both law students and junior associates, but remain disproportionately unrepresented at partner level.

In the UK, only 25 per cent of partners in law firms are female and this percentage falls even further for most large city firms. This is mirrored across Europe: female partner levels range from 25 per cent in France to only 12 per cent in Spain and the Netherlands.

This disparity can no longer be explained by the argument that women are working their way up through the ranks. Female lawyers have been entering the profession in high numbers for many years now, but are not being appointed to senior positions in anything like the same numbers as their male counterparts.

Women are consequently moving to alternate roles or choosing to leave the profession altogether.

Diversity requirements

At the European level, there are various provisions dealing with diversity in general, and gender diversity in particular.

The basic principle of equality between men and women has been part of EU law since the Treaty of Rome was signed in 1957 and has been developed on by a variety of subsequent legislation relating to gender equality.

The Racial Discrimination Directive was introduced in 2000 and the Equal Treatment Framework Directive from the same year introduced Europe-wide protection from discrimination based on religion, beliefs, disability, age or sexual orientation.

This latter directive expressly notes in its preamble that “the right of all persons to equality before the law and protection from discrimination constitutes a universal right”. It notes that employment and occupation are key elements in guaranteeing equal opportunities for all.

The latest move to improve representation of women in senior workplace positions comes from the European parliament.

In July, MEPs passed a resolution on women and business leadership, pushing for EU-wide legislation, setting quotas for female representation on corporate management boards.

In the largest listed EU companies, women currently make up only ten per cent of directors and three per cent of CEOs, with the current rate of increase in female representation being only half a percentage point a year.

The proposed quotas are 30 per cent female representation on boards by 2015, increasing to 40 per cent by 2020.

This is a non-binding resolution and so may not result in legislation. However, it does reflect moves being made in a number of European countries to address the same issue.

Norway has had legislation since 2006 requiring at least 40 per cent of the boards of publicly trading companies to be made up of women. Spain has also introduced a 40 per cent quota, to be reached by 2015. The French parliament recently passed a similar law for large companies, requiring a 40 per cent quota to be phased in over next the six years.

In Germany, under threat of compulsory quotas being imposed, the largest listed companies have committed to introduce voluntary quotas for women at senior management level by the end of this year.

In the UK, moves to improve the representation of women in senior positions have so far stopped short of mandatory quotas. However, the Financial Reporting Council is currently consulting on gender diversity on the boards of listed companies, looking at whether the recently-revised UK Corporate Governance Code needs to be amended further.

Separately, the Department for Business, Innovation & Skills is planning to consult on other recommendations from Lord Davies’ review of gender diversity in the boardroom. In particular, it will consider the suggestion that quoted companies should be required to annually disclose the proportion of women on their boards, in senior executive positions and throughout their organisations.

Legal sector initiatives

All of these laws and proposals focus on the boards of large companies, and public or listed companies in particular, so they do not directly affect the management of private law firms. However, could similar approaches be taken in the legal sector in an effort to improve gender diversity at management level?

In the UK, nothing as radical as quotas for female partners has been proposed, but there are various current initiatives aimed at improving diversity in the legal profession in general.

The Legal Services Board, which oversees the regulation of all lawyers in England and Wales, has been consulting on proposals to increase diversity and social mobility at all levels of the profession. The board’s response to this consultation noted that progress in relation to diversity at more senior levels has been disappointing.

The resulting proposal is a regulatory requirement on all law firms and barristers’ chambers to gather and publish diversity data. This would cover all of the characteristics protected under the Equality Act (including age, sex, race, disability, religion/belief and sexual orientation), plus information about caring responsibilities and socio-economic background.

The new draft code of conduct from the Solicitors Regulation Authority also contains a chapter on diversity. As part of the new approach of outcomes-focused regulation, one of the outcomes to be achieved is: “Your approach to recruitment and employment encourages equality of opportunity and respect for diversity”.

Indicative behaviours which will tend to show achievement of this include having an appropriate written equality and diversity policy and providing both employees and managers with training.

Although most solicitors’ firms will already have some form of diversity policy and training in place, the new code will help to ensure that all firms place sufficient emphasis on these issues.

The position in law firms across Europe is similar. There are no specific legal requirements in relation to women in senior management positions or law firm diversity generally.

As in the UK, developments targeted at increasing female representation on corporate boards have not been extended to law firms or other professional services firms. However, regulatory bodies in several countries are looking at the issue.

For example, the Swedish Bar Association is working on a number of projects to assist female lawyers, including networking events, conferences and mentoring arrangements.

The French National Council of the Bars, which represents the legal profession both nationally and globally, has created a study group to share ideas and best practice on the role of women in the profession.

In Spain, many law firms have implemented an ‘equality plan’ containing measures to effect the principle of equal treatment and outlaw discrimination against women, including through negotiation with workers’ representatives. This law dates back to 2007 and is only compulsory for companies with over 250 employees, but 44 per cent of Spanish law firms have implemented an equality plan for their workplace.

Self-employment issues

One limiting factor in some European countries is that lawyers may be self-employed rather than employees. In the UK, this is often the case for partners. However, discrimination law under the Equality Act specifically applies to partners, as well as employees.

UK firms will tend to target both diversity policies and training at all members of the workforce, irrespective of employment status. In contrast, the self-employed status of lawyers in some other continental jurisdictions means there is a reluctance to apply diversity policies in those workplaces.

For example, in Italy, all lawyers are legally required to be self-employed. This tends to make it difficult to establish formal diversity policies, as lawyers work together in a professional association, rather than being employed by the law firm.

Similarly, all Belgian lawyers have to be self-employed under the relevant bar rules, so firms are reluctant to impose rules which could undermine lawyers’ independence and autonomy, including implementation and enforcement of formal diversity policies.

As mentioned above, there are no current moves within either the UK or Europe to introduce quotas for female partners in law firms or anything close to that. The various initiatives relating to quotas on company boards are focused on large companies and, in most cases, only those which are publicly listed. Imposing quotas on wholly private law firms would be far more controversial and there is an understandable reluctance to depart from appointing partners purely on merit.

In countries where all lawyers are self-employed, the practicalities of imposing quotas at any level within a firm are particularly difficult. In addition, it is unclear how a quota system would address the underlying issues which prevent the progression of women to senior levels. The problem is not simply a case of overt discrimination or prejudice, but a much more complicated mix of factors.

Inhibitions to partner diversity

In the UK, there has been considerable debate about the reasons why women do not progress to partnership in the numbers that would be expected.

Research carried out by the Law Society has identified a number of key themes that potentially limit the progression of women.1 These include inflexible working practices, organisational culture, firm infrastructure, the way in which professional achievement is measured and perceptions of women.

Many of these are connected with the fact that women tend to take on family burdens outside the workplace, including childcare and elder care responsibilities. The lack of flexible working in law firms was identified as the single most significant obstacle to women reaching senior roles.

Truly flexible working remains difficult to achieve in the face of client demand and a long-hours culture. Other aspects of firm management and reward structures exacerbate this, such as a focus on winning new clients through efforts outside of working hours rather than existing client management and the use of billable hours as the key measure of success.

Although many firms do now have flexible working policies, taking up the option of flexible working is still often seen as a step off the career track which damages the individual’s future prospects. There is also a lack of multiple entry points which would enable an individual to rejoin the partner track after taking time out for family reasons.

Again, the UK situation is mirrored across Europe. Lack of part-time and flexible working seems to be the main reason why female lawyers fail to progress to senior positions within law firms.

Despite the EU’s history of legislation ensuring equality, women continue to take primary responsibility for family and household issues, particularly childcare. In practice, this tends to be incompatible with the demands of work as a senior lawyer.

This remains the case even in countries which explicitly encourage shared parenting, such as Denmark and Sweden. Law firms in these and other European countries have been introducing some flexible working initiatives, but as yet they have been insufficient in generating significant change.

Flexibility and acceptance

It appears that flexibility and real acceptance of different ways of working is the key to improving the representation of women at senior levels in law firms – at least while women continue to carry the main burden of caring responsibilities.

Some aspects of client demand may actually assist with this, as clients start to use diversity records as one of their measures for choosing legal advisers. This has become increasingly common in the United States, where many corporate counsel have been requiring law firms to provide diversity statistics for a number of years.

In the UK, the new public sector equality duty under the Equality Act is likely to add to the existing pressures to show a good diversity record when tendering for public sector work.

However, the fact is that, in an age where instant communication is possible, pressures from clients who increasingly expect 24/7 services make it more rather than less difficult to foster flexible working arrangements.

 

 

The author gratefully acknowledges the contributions of Hazel Oliver to this article.

 

michael.burd@lewissilkin.com

Endnote

1 See Obstacles and Barriers to the Short- and Long-term Career Development of Female Lawyers, Insight Oxford, March 2010