Legal Business Blogs

‘Still much progress to be made’: Freshfields reveals modest improvements in pay gap stats

Freshfields Bruckhaus Deringer is the first of the Magic Circle to share its pay gap statistics for 2021. Despite steady improvements, the firm acknowledges there is still much more to be done.

The report revealed that on average men are paid 52% more hourly than women, on a median basis the difference is 13%. This is a modest improvement from a 55% mean and 17% median gap in 2020.

Bonus pay gaps have slipped in the wrong direction however, with men on average receiving bonuses 12% higher than women, which is considerably higher than the 2% disparity in 2020.

At partnership level, there has been a shift with women now being paid 3% more on average than their male counterparts, with a median difference of 13%. However, the fact that women still only make up 24% of the partnership is perhaps more telling.

That said, the firm has implemented several recent policies to action its gender balancing strategy, including adjustments to family leave policies, a pregnancy loss policy and a menopause policy. In its 2021 promotions round announced in April 2021, half of the 22 new partners promoted globally were women.

The report also investigated ethnicity pay gap data, finding that on average staff who identify as part of a minority ethnic group are paid on average 51% less than those who do not, representing a decrease from 60% the previous year. The mean difference in pay was 7%, down from 13%. Meanwhile the ethnicity pay gap decrease for employees was more notable, falling to 4% from 16% in 2020.

The firm’s 2021 ethnicity pay data is based on voluntary reporting by 93% of its staff, up from a 79% participation rate last year. Based on this data, 19% of partners and employees in the UK identified as part of a minority ethnic group. At partnership level this number falls to 7%.

In recognition of a lack of diversity, particularly at senior levels, the firm launched its Future Leaders Programme in 2021 aimed at supporting black and ethnically diverse colleagues. It is also a founding member of Legal CORE (Collaboration on Race and Ethnicity) alongside Magic Circle contemporaries Allen & Overy, Clifford Chance, Linklaters and Slaughter and May as well as Herbert Smith Freehills, Macfarlanes and Norton Rose Fulbright. The group, which launched in 2020, is aimed at tackling the underrepresentation of ethnic minority groups in the legal sector.

In March 2021, as part of its new five-year global diversity and inclusion commitments and targets, the firm announced a new ambition to double the number of black associates in the firm by 2026.

For a second year, the report also recorded the firm’s disability pay gap based on voluntary reporting by staff. The data indicated that employees and partners who identify as disabled are paid on average 53% less than non-disabled colleagues, down from 65%.

In a statement, London managing partner Claire Wills said: ‘We are pleased to see continued improvements in reducing pay gaps, yet there is still much progress to be made. We are building a focus on measurable change and our targets include shining a light on leadership and representation at different levels. This will aim to ensure a more balanced representation across seniority levels at the firm, which will in turn have a positive impact on pay gaps. We also recognise the significance of creating a culture where everyone feels they can belong, and there’s a sense of purpose and values.’