Law firms to have extra year before publishing diversity data as LSB flags concerns over Bar exemptions

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By Legal Futures

31 May 2012

Kenny: regulators have shown progress

Law firms are to have an extra year before they must publish staff diversity data, after the Legal Services Board (LSB) approved Solicitors Regulation Authority (SRA) plans for a delay.

The LSB’s assessments of the diversity action plans submitted by all of the regulators raised only one red flag – over the Bar Standards Board’s (BSB) proposals that chambers with fewer than 10 staff will not have to publish their data, while any chambers with fewer than 10 individuals in a particular category will be able to redact that part of their data.

Under LSB guidance published last year, all of the approved regulators should require firms and chambers to conduct a diversity monitoring exercise, asking every individual in their workforce to self-classify against eight characteristics: age, gender, disability, ethnic group, religion or belief, sexual orientation, socio-economic background, and caring responsibilities.

As well as providing this information to their regulator, the guidance says the regulators should require firms and chambers to publish – from 2012 – an anonymised summary of the findings, except in relation to sexual orientation and religion/belief.

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Yesterday former Labour minister Alan Milburn – updating the progress made since his 2009 Fair Access to Professional Careers report – applauded the LSB’s initiative as “a decisive act of leadership”.

The SRA is proposing to conduct an “equality and diversity thematic pilot” this year involving 100 law firms to obtain a snapshot of the diversity profile of the profession, before rolling it out into the annual reporting cycle from 2013.

It said: “While we recognise and appreciate the LSB’s view that publication at individual entity level could drive through greater transparency for consumers and behaviour change, we feel that in imposing this requirement at a time of huge change for our regulated community would be disproportionate, and may result in resistance to the request and a low response. This would risk jeopardising the whole initiative.”

The LSB assessment accepted this rationale, but warned that it does not expect the timetable to slip any further.

“Due to the size of the SRA’s regulated community and the proposed method for collecting the data (ie, through the annual reporting process), we consider the timetable proposed by the SRA represents a reasonable adjustment to the proposals in the guidance.”

The BSB has proposed the exemptions on data protection grounds – because of the risk of identification of individuals – save where individuals collectively consent. It acknowledged that this is likely to exclude a “significant number of chambers” from the requirement to publish, probably around half of the total of 400 chambers

The LSB said the BSB’s approach would lead to “significant challenges to delivery of the transparency objective”, especially as “the BSB rates the risk of non-compliance from chambers as high”.

It noted that some chambers are already publishing data where there are fewer than 10 individuals in each category, “and we anticipate that these chambers most likely have already made an assessment of the legality of doing so. While the BSB’s guidance makes a clear presumption of publication, there remains in our view a potential risk that the detailed prescription could lead to chambers not making their own decisions about delivering the outcomes the BSB seeks”.

As a result, the LSB warned that when it considers the BSB’s application for approval of changes to regulatory arrangements, “we intend to thoroughly consider the wording of the proposed guidance”.

The Intellectual Property Regulation Board was the only other regulator to raise concerns. While the LSB accepted its phased implementation plan – with firms to start collecting data on the professionally qualified workforce in autumn 2012 and wider workforce in 2014 – it rejected IPReg’s view that only larger entities should be encouraged to publish.

“We are therefore concerned that any guidance provided to firms may discourage the smaller ones from publishing; this could then have a negative impact on the delivery of the transparency objective. Furthermore, we are of the view that the potential risks around data security and potential breaches of confidentiality could be mitigated by the firms themselves.”

LSB chief executive Chris Kenny said: Responding to the LSB’s guidance, the approved regulators have shown progress in developing their approach to diversity data collection…

“Transparency can act as a powerful incentive on employers to consider the impact of their recruitment decisions on retention and progression and we therefore welcome the decisions of the Solicitors Regulatory Authority, Bar Standards Board and the Council for Licensed Conveyancers to require entity level publication.”

Mr Milburn’s progress report found that “overall, law is on the right track but its progress is too slow. It needs to significantly accelerate… The further up the profession you go, the more socially exclusive it becomes. Even more worryingly, entry to the law – and therefore the lawyers of the future – is still too socially exclusive.”

He highlighted concerns over whether the many programmes aimed at outreach and raising aspiration have a clear purpose and are “sustainable and evaluated”.

Mr Milburn added that social mobility needed to be at the heart of the legal sector and organisations, while firms should widen the pool of universities from which they will recruit. “We have heard first hand from some law firms that their clients expect the ‘best’ and that this requires them to recruit from a handful of universities. We do not accept this as an argument.”


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