City law firms using diversity schemes for “reputation laundering”

Ashley: Institutional inertia

The efforts of City law firms to become more diverse and inclusive are a form of “reputation laundering”, offering only the “illusion of change”, an academic and diversity specialist has argued.

Dr Louise Ashley, associate professor at Queen Mary University London, said the “passionate commitment” of some individuals within firms to change could not match “institutional inertia”.

Dr Ashley spoke to 400 City professionals, around a third of them lawyers, for her book Highly Discriminating: Why the City isn’t fair and diversity doesn’t work.

In an article published last week, Dr Ashley said the efforts of professional services firms in the City to become more diverse and inclusive had not worked “because they were never meant to”.

She went on: “Instead, they are a form of ‘reputation laundering’, offering only the illusion of change in order to protect their privileges and rewards.”

She said City firms used “class-based recruitment strategies” which sustained “the impression of status and prestige” while helping “justify the high fees they charge, and the exceptional profits they generate”.

At entry level, City firms battled to attract graduates from the UK’s most elite universities.

“This ‘war for talent’ is largely phoney – in reality, the skills the firms need are available from a much wider cohort of graduates – but it has helped convince both City firms and clients of these employees’ exceptional worth.”

Explaining why his law firm preferred to appoint “polished” candidates from elite universities, one partner said: “From a business perspective, you can’t afford to have people in meetings who will not look good to the clients, [even if] some might be very, very bright.”

A Black corporate lawyer told her: “Their dream scenario is to try and find a nice, uncontroversial way to try and ‘do diversity’ without having to change much of anything else.”

Dr Ashley told Legal Futures that the culture of law firms was “a little less extreme” than those of the banks: “Because they’re in the law, they must have some commitment to the public good. It’s a question of degree.”

But despite putting the focus on gender for the past 20-30 years, City law firms “had not made the progress we expected”.

Dr Ashley said the “passionate commitment” of some individuals within firms to change could not “match institutional inertia”.

While client pressure on law firms did “drive some change” and made “an incremental difference”, clients “did not always hold firms accountable”, leading to “cosmetic changes without fundamental change”.

Dr Ashley said: “It’s not that client pressure does nothing, but you have to understand what it does. Many City law firms are not remotely diverse, but extremely profitable. The urgency for change is not that great.”

In her article, Dr Ashley said that if any unfair recruitment practices or treatment of employees came to light, City firms typically employed the shield of ‘unconscious bias’ to explain away discrepancies.

“This response can suggest a sort of ‘no-fault discrimination’, where since everybody is to blame, nobody is.”

Dr Ashley said there was “no evidence” that unconscious bias training delivered significant improvements for under-represented groups.

Despite this, the training had become “incredibly fashionable” and “once one organisation takes it up, the others do”. However, it was “very difficult to de-bias individuals and it probably won’t work”.

She added: “The City as a whole needs to much more open and reflective on who benefits from inequalities and why. It is not a coincidence that the City is beset with inequalities. It is founded on them.”

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