Most who work in law firms, in common with people who work for any other employer, whether it be a construction company, an accountancy firm, or in the public sector, know that it is against the law in the UK to discriminate, victimise or harass fellow workers. But what many in law firms, outside of risk and compliance teams, are not aware of (or forget), is that discrimination and diversity are also regulatory issues. In fact, diversity is named as one of the SRA's priority risks in its Risk Outlook.
But in addition to diversity being a legal and risk issue for firms, it is also clearly a commercial one. Increasingly, clients may consider diversity issues when making law firm panel appointments or considering where to send instructions. So what are law firms doing to comply with their obligations? There is certainly a lot of interest in gender diversity, and many firms have highly publicised programmes in this area. But what success have those programmes had? And what are law firms doing outside of gender?
What are law firms required to do?
Lawyers and law firms are required to comply with 10 mandatory principles. These include principles which should hopefully come as second nature such as upholding the rule of law (Principle 1), and behaving in a way that maintains the trust of the public (Principle 6). But how many solicitors have focused on (or treat as "second nature") Principle 9 - encouraging equality of opportunity and respect for diversity?
Of course they should do. And a useful starting point is considering what it means. The Law Society1 explains equal opportunities as "maximising employee potential and ensuring that all employees and job applicants receive equal access in relation to employment, terms and conditions, training, promotion and services" and diversity as "recognising, respecting and valuing the differences between individuals. It means treating people as individuals and accounting for inequalities and disadvantages".
Chapter 2 of the SRA Handbook, meanwhile, expands on Principle 9 and sets out the required outcomes that flow from the principle. Several of these outcomes reflect the duties and obligations of law firms as employers within the UK (which all other employers in the UK have to meet), for example, not to unlawfully discriminate against others and to make reasonable adjustments for disabled employees who are placed at a substantial disadvantage. However, others are broader in content. For example, two key outcomes are to ensure that your approach to recruitment and employment encourages equality of opportunity and respect for diversity and that appropriate arrangements are in place to ensure that you monitor, report, and, where appropriate, publish workforce data. The SRA Handbook sets out possible ways of meeting these required outcomes, including having a written equality and diversity policy and providing employees with training about equality and diversity.
So what are law firms actually doing?
There is little doubt that most law firms comply with the most basic of these requirements by having a written equal opportunities policy and providing training on equality and diversity (perhaps including the more recent trend (important in the authors' views) to including unconscious bias training). It is also now common place for large law firms to have diversity initiatives, mentoring programmes and flexible working policies. Many have also signed up to the Law Society's Diversity and Inclusion Charter which requires law firms to make biennial submissions about their diversity data.
However, the key question is whether these practices and initiatives are doing enough to encourage equality of opportunity and diversity within the workplace and whether they are doing what is required to attract and retain a diverse workforce?
Great strides have most certainly been made in relation to the recruitment process, with 57% of all qualified solicitors below partner level in law firms now female and BAME individuals making up 18% of all lawyers in law firms2. However, a criticism could be that these statistics potentially hide stagnation in diversity at the partnership level, and a lack of diversity at the promotion to partner stage, particularly in large law firms (50 plus partners):
- Female partners make up only 27% of the partners in large law firms;
- Only 4% of partners in large law firms are of Asian ethnicity; and
- Only 58% of partners in large law firms attended a UK state school.
Given that the proportion of economically active people who are women is 47%, of Asian ethnicity is 7% and attended fee paying schools is 7% (according to research by the Independent Schools Council in 2015), there is clear underrepresentation of women, ethnic minorities and state school educated lawyers at partnership level in large law firms when comparing a law firm's make up with the population of the country at large.
Perhaps the most stark issue, given the amount of focus that it has received over the last decade, is the lack of progress in the numbers of female partners. This also no doubt feeds into the gender pay gap of 10.3% for legal professionals4.
Clearly there are many complex reasons and issues which are related to the statistics we see - some of which law firms can influence, and others of which they potentially can't. But in view of these start statistics, what should law firms be doing to comply with their duties to promote equality of opportunity and diversity when promoting individuals?
What should law firms be doing?
The Law Society and the SRA clearly think more should be being done as it remains high on their agenda. The Law Society has published a paper on the business case for diversity and inclusion in law firms, together with guidance on using blind and contextual processes for the recruitment of trainee solicitors.
Blind and contextualised recruitment processes offer very interesting but different strategies for promoting diversity and equality of opportunity. A CV blind process removes information from which a recruiter can make judgements on the basis of unconscious (or conscious) bias including name, date of birth, title etc. This ensures that the individual is judged on the merit of what they have done. On the other hand, contextualised processes ask for more information, such as about the average grades for the school the applicant went to or the postcode they were brought up in so that their performance to date can be put in the context of the support they received at that time.
While many law firms are making moves towards this approach, and this should be encouraged in the authors' view, these processes do not assist when it comes to internal promotions, or managing careers for those who are already in a law firm.
This highlights the need to review (and to keep reviewing) the statistics at all stages of an individual's career in a law firm. And to keep considering what more can be done. There is no simple answer, or solution.
Before turning to promotions within law firms though, it is worth noting that the SRA is looking to assist with diversity by offering an alternative to the current system to qualification whereby an individual completes a qualifying law degree, then does the LPC, then does a block training contract. The SRA is looking to introduce a solicitors qualifying examination (SQE) from 2020 at the earliest, under which an individual is able to qualify as a solicitor by passing SQE stages 1 and 2, having a degree (or equivalent qualifications or experience) and completing two years of qualifying legal work (as well as being judged to be of satisfactory character and suitability). The first three requirements can be met in any order.
As to the impact this may have, we will have to wait and see but any wider assistance given to law firms in relation to diversity is to be welcomed.
Turning to promotions law firms need to look at how statistics change in their organisation through promotions. If there is a "drop off" of people sharing a certain characteristic at a certain level that should be reviewed, with the aim of identifying the reasons for that, and considering what solutions can be put in place.
Maternity leave, and the far higher statistical likelihood of female employees taking time away from work due to child-care, has long been identified as a contributing factor affecting the promotion of female employees. Law firms need to continue to look at ways to reduce this impact whether through proper maternity ramp down and ramp up policies, enhanced flexible working arrangements, or potentially new models of working. Technology is giving more options, and law firms need to look at these options with an open mind, ready to trial them. Not all will work, but the law firm which gets it right first will have a huge potential competitive advantage.
Once a law firm has identified areas for improvement, or where new policies can focus, targets can then be put in place to make sure that the commitment to those policies continues. These may include targets for partner promotions which a law firm can be confident are achievable based on reviews which have been carried out and policies which people are behind.
It will be interesting to see if any initiatives which are currently being undertaken actually do work when the Law Society publishes its next Diversity and Inclusion Charter biennial review for 2017. However, do remember that even if parity or greater diversity is achieved in one area, there can be little doubt that, given the muti-faceted nature of diversity, the focus then simply needs to shift to concentrate on another underrepresented category.