LSB calls for equal pay audits amid worries about gender and race disparities

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By Legal Futures

1 March 2013


Equal pay: need to hold law firms and chambers to account, says LSB

All legal services providers should undertake and publish equal pay audits, the Legal Services Board (LSB) has suggested – this would ideally be voluntary, “but only if it results in the changes needed”.

It came in an LSB review of the evidence on equal pay, which indicated that gender and race pay gaps are greater in the law than in the wider economy.

The board recommended that regulators need to hold law firms and chambers management to account so that diversity policies have a credible impact.

Potential extreme measures include gender quotas, mandatory pay audits and procurement policies – although the LSB pointed to research showing the drawbacks of such direct action.

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It said the Office for National Statistics found that the gender pay gap was 9.6% for all jobs and 21.7% for legal professionals in 2012; the LSB highlighted the fact that the last comprehensive piece of research into the equal pay gap in legal services was conducted by the Law Society in 2008 and that more up-to-date and comprehensive data is needed.

The Law Society research identified gender and race pay gaps of 29% and 18% respectively in the earnings of solicitors in private practice.

The LSB is currently examining gender balance at different levels of seniority in the top ten law firms to test whether the picture in these firms corresponds with those earlier findings: Allen & Overy, Clifford Chance, DLA Piper, Eversheds, Freshfields Bruckhaus Deringer, Herbert Smith Freehills, Hogan Lovells, Linklaters, Norton Rose and Slaughter and May.

The research is ongoing, but initial findings show a significant imbalance between men and women at partnership level, with an average of four male partners for every one female partner.

This is despite a much more even spread of men and women at solicitor and trainee level. It said the pattern so far suggests firms have no problem finding suitably skilled women, but that these employees are not necessarily seen as appropriate candidates for partnership level roles.

The LSB review also observed that of the 177 firms signed up to the Law Society’s Diversity Charter, only a sixth of the large firms have undertaken an equal pay review and appropriate further action.

The review highlighted problems which are “not new”, the LSB acknowledged, but that a number of initiatives and legislative requirements have been introduced in an attempt to address them – without the desired effect.

It concluded: “To really tackle these problems action is required right across the legal services sector with the managers and owners of law firms and chambers being held to account on the diversity of their workforce by fully informed regulators, clients, consumers and the public.”

The LSB called for the Law Society’s research to be “repeated and expanded” so that the impact of discrimination on earnings is taken more seriously and becomes part of a “regular programme of research” to identify areas of concern.

Last year, a group of law firms and professional services providers called The 30% Club, suggested that the slow pace of change in promoting more women to senior positions could be addressed with ‘talent strategies’ rather than diversity programmes.

One option could be to take advantage of the annual practising certificate fee process to collate crucial data at minimal extra cost – mapping earnings by region, entity and practice area as well.

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