Marco Cillario rounds up the latest stats as the April deadline looms
And so it begins. The first gender pay gap reporting season has kicked off and for many Legal Business 100 law firms (and indeed all British companies with 250+ people) there is an early April deadline to disclose how much they are paying their UK-based female employees compared to men.
Employees? In the case of law firms, The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 includes support staff and associates but leaves partners out.
Even with the most gender-imbalanced component removed from the equation, it is no surprise to find that, on average, men are paid more than women overall at all top firms that have disclosed their numbers at the time of writing – sometimes significantly more.
Among the most striking results so far, Linklaters revealed that as of 5 April 2017 the average bonus for its male staff was nearly 60% higher than for women. The gap was 62% taking into account the more reliable median figure, less affected by particularly high or low earners. As for hourly pay, the median gap was 39%.
Linklaters is performing worse than two other Magic Circle rivals that had released their numbers as we went to press. Slaughter and May did slightly better on hourly pay (with a 38.5% median gap) and bonuses (55%), while Allen & Overy (A&O)’s gap was lower both when it came to salaries (27%) and bonuses (23%).
Outside the Magic Circle, Ashurst had the highest bonus gap among the UK top ten firms – 60% when considering the median figure – twice that of CMS Cameron McKenna Nabarro Olswang (30%).
The picture will become clearer when more firms release their numbers ahead of the deadline of 4 April. In the meantime, observers can compare the figures above with the estimated hourly median gap across all professions, which the Office for National Statistics puts at 9%.
‘The fact is that disclosing figures has raised awareness to a higher level.’
Melissa Fogarty, Clifford Chance
Firms were understandably at pains to justify their gaps. The explanation was broadly similar for all of them: they profess confidence that they are paying male and female employees the same for equivalent jobs (failing to do so would be illegal), but point to the fact that they have more women in less well-paid roles and a higher number of part-time female lawyers. This is reflected in the attribution of bonuses, with senior male staff dominating large payouts.
At Linklaters for example, women made up 79% of staff in the lowest-earning quartile, which includes secretarial and junior business team positions. In this quartile, the pay gap was 6% in favour of women. But in the upper quartile of earners at the firm – which includes senior associates – women accounted for 45% of the staff and earned 6.5% less than men.
At Slaughters, the pay gap was in favour of women in almost all salary quartiles and among associates, but female employees made up the vast majority of the staff in the lower quartile (72%) and less than half (47%) of the upper quartile.
To cut a long story short: behind the pay gap there is a seniority gap. In the words of Reed Smith’s Tamara Box: ‘It is not an attrition problem; it is a promotion problem.’
In this context, there is no doubt that leaving partners out of the reporting limits its significance, as firms have been able to duck the main issue – gender pay imbalance among their most senior talent. Still, many welcome the publication of these statistics as an initiative that might help speed up change in the industry.
‘The fact that disclosing figures is obligatory now has raised awareness to a higher level about the importance of greater diversity and progression of women,’ says Clifford Chance corporate partner Melissa Fogarty, whose firm had not released its figures at press time.
Linklaters’ co-head of restructuring and insolvency, Rebecca Jarvis, adds: ‘It will make people think more about how they award bonuses – am I paying that person more because they are better or because they are male? It is more of an issue when it comes to bonuses because they tend to be more discretionary, while salaries tend to be based on seniority.’
Narrowing the gap will take time. Many law firms have a long list of initiatives in place to promote the progression of women, from mentoring and agile working to unconscious bias training. Yet the vast majority of senior roles are still occupied by (and associated with) men.
As Box puts it: ‘It has a lot more to do with challenging ourselves in our culture and practices and seeing what is holding women back. This mandatory reporting will force us to do that.’
marco.cillario@legalease.co.uk
Gender pay gap in the Magic Circle (at press time)
| Linklaters | Hourly pay | Mean:23% | Median: 39% |
|---|---|---|---|
| Bonuses | Mean:58% | Median: 62% | |
| Allen & Overy | Hourly pay | Mean: 20% | Median: 27% |
| Bonuses | Mean: 42% | Median: 23% | |
| Slaughter and May | Hourly pay | Mean: 14% | Median: 38.5% |
| Bonuses | Mean: 33% | Median: 55% |