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Upping the ante: City Law feels pressure on transparency as Big Four includes partners in gender pay stats

The Big Four accountancy firms have set a precedent for their legal counterparts by disclosing updated gender pay gap figures that include equity partners.

The result is a substantial increase in the pay gap between men and women, adding pressure on law  firms to follow suit and reveal the disparity in remuneration  at the top.

PwC, KPMG, EY and Deloitte all updated their figures amid increasing calls from city leaders to provide a complete picture of gender inequality across UK businesses. PwC saw its mean gap increase from 13.7% to 43.8%. Deloitte, meanwhile, had its mean gap increase from 18.2% to 43.2%, while the gaps at KPMG and EY increased from 22% to 42% and 19.7% to 38.1% respectively.

Under The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, businesses with 250 employees or more must report gender pay gap figures by the 4 April. Until last week, both legal and accountancy firms had legitimately excluded equity partner drawings on the grounds they are owners, not employees, and attempts to compare their earnings would be unreflective as they are based on the distribution of firm profits.

The accountants, however, have analysed total earnings – including salary and bonus figures together with earnings for equity partners – before applying the gender pay gap calculation. On whether this model could be adopted by law firms, a spokesman for Clifford Chance told Legal Business: ‘The firm is still looking at what it would include in the report and has not decided yet whether partners will be part of it.’ CC’s figures are expected to be released later this month.

The decision by accountancy firms may signal wider changes. Kevin Ellis, chairman and senior partner at PwC said in a statement: ‘We recognise the strong public interest in equality and diversity and therefore the greater need for transparency on all matters relating to gender and ethnicity. In the spirit of the government’s regulations, we’ve now included total earnings of partners and staff to give the most rounded picture of our firm’s gender and BAME pay gaps.’

This move by the Big Four will do little to alleviate pressure on law firms, which face continued criticism regarding the treatment of women. However, there is little indication law firms will look to emulate the accountants in the near future.

Linklaters, which revealed stark gender pay disparity in its report in February, said it had no intention of revising  or updating its figures to include partners.
Slaughter and May declined to comment. A&O was contacted for comment.