Pinsents senior partner Richard Foley argues the industry needs new benchmarks for success
As Legal Business publishes its LB100, it seems apt to step back and ask ourselves whether the industry is focusing on the right things as it seeks to measure success. It should be uncontroversial to say that if law firms are to work better – for themselves, the wider business community and society – they must be diverse and inclusive of all talents. Measuring that type of success is every bit as important as whether a firm moves up or down a place or two in the financial league table. So, perhaps one measure we should look to in the next year’s LB100 is the progress firms are making in tackling issues of inclusion and diversity?
If that is the way we go, however, I would caution against ranking firms by reference to their gender pay gap (GPG) ‘number’. The GPG regime, for example, is a thoroughly well-intentioned piece of legislation that has shone a spotlight on some of the inherent structural iniquities that exist in the UK workforce – not least within the legal profession. It has sparked debate and raised awareness, and if over time GPG reporting is treated in the right way, I have no doubt it will drive positive change.
If, however, what we see is not meaningful change but a knee-jerk desire to change the ‘number’, or celebrate marginal changes in the gap from one year to the next, the point has been missed. Many believe that if we focus on the right inputs, the right outputs will follow. However, that is where I fear too much focus on GPG numbers may lead us in the wrong direction.
If the aim is to get an output of zero GPG, it requires some inputs that run counter to the spirit in which the regulations were introduced – namely discrimination. Filling the most junior roles in the business with men would narrow the gap in the short term, but it is hardly tackling the underlying issue. Similarly, a series of targeted promotions of talented women could lead to a short-term narrowing of the GPG, but it would not change the underlying operating environment for women.
As a senior partner, of course I am pleased if the gender pay gap narrows, but only if it does so as a trend over the long term and is as a consequence of the other things we are doing. Instead of shining a spotlight on one aspect of diversity and inclusion, we need to turn on the floodlight across all aspects of our business.
We need to ask some deep and troubling questions of our organisations, and identify the underlying factors that are barriers to progression of all the under-represented groups in our firms.
‘Do we really believe clients will think we are doing well simply because we pay our partners more than the next firm?’
Richard Foley, Pinsent Masons
Institutions that genuinely want to make progress need to systematically identify and break down these barriers. Some will relate to gender and others will not, but the point is that if we focus on the inputs properly, a more representative and diverse profession will follow.
If we create a business environment designed to ensure all of our people are being given the opportunity to succeed irrespective of irrelevant characteristics such as gender, race, sexual orientation and more besides, then we will be making real progress.
What are the things that will create such an environment? Our research suggests the following: flexible working arrangements, agile working, mentoring, career planning, tackling bias, output (rather than input) based performance metrics and not as ‘yes, we also do all that’ or ‘yes, we allow things like that’ but as standard behaviours embedded as business norms.
As the market gets better at embracing those ideas, we will see change. It will not be easy, not least because it requires us to identify, measure and then hold ourselves to account by reference to metrics that have not been historically important, using data that can be hard to capture.
Certainly what is clear, though, is that the days are over when growing profit per equity partner and ‘bench strength’ was all that mattered. As Alex Novarese argued in these pages recently, law firms are ‘entreated to do better on all manner of broader concerns one minute’ only to be ‘berated for not driving partner profits up’ the next.
Do we really believe that our clients will think we are doing well or are a good business simply because we are paying our partners more than the next firm, or more than last year? You only have to read that out loud to hear the absurdity of it.
Profit is important as a driver of growth and investment, and the partners, as shareholders, look to market-level rates of returns as part of the picture. However, I believe that what will separate the winners and losers in tomorrow’s legal industry is the ability to build a business that stands for something more, and to be able to measure and communicate true progress.
Richard Foley is senior partner of Pinsent Masons.