Across both the law firm and in-house legal markets there is widely recognised to be an unconscious bias prevalent: senior management recruit and advance people in their own image. This can be detrimental to diversity within the profession as a whole and affects women, individuals from ethnic minorities and different social classes amongst others. In this article, Lucinda Youtan, Senior Manager within SSQ’s in-house team in London, explores gender diversity within the UK commercial legal profession.
Women in law firms
FACT: approximately 60% of City law firms’ new trainees are female
Despite a gender diverse talent pipeline research consistently demonstrates that men are far more likely to obtain the most senior legal roles both in-house and in City law firms.
Approximately 60% of City firms’ new trainees are female, as has been the case for many years. However, there is only one female Managing Partner in the Magic and Silver Circle law firms and amongst the FTSE 100 there are only 21 female General Counsel. Why are there not more woman at the top of these prestigious commercial law firms and in the UK’s biggest listed companies legal teams?
FACT: Women account for fewer than one in five of full equity partners at the City’s top 10 law firms
Over the last thirteen years we have assisted thousands of lawyers in securing new roles and we have identified several factors which we believe contribute to the lack of gender diversity at the top of the profession.
Within the Magic and Silver Circle law firms, over 70% of Managing Partners hail from a transactional law background. Transactional partners have historically driven the revenue within these UK firms and have been “rainmakers” for the wider firm, including non-transactional departments, raising their internal profile and building the business case for the Managing Partner role in the process.
We regularly work on NQ transactional roles and from our experience there are more male trainees qualifying into transactional positions in City law firms than female trainees. Whilst some junior female lawyers are influenced by the compatibility of a particular practice area with a family life, the culture of transactional teams within law firms is sometimes perceived as aggressive and/or male dominated.
We know that fewer women attain partnership than men. Fewer women go for partnership than men, and fewer who do go for it actually achieve it. This may be partly due to law firm culture, and recognition by all involved that undertaking both billing activity and business development activity, both of which are key performance indicators for partnership, is more than a full-time job. Women remain more likely to have to balance professional commitments with a family. Business development activity often spans breakfast through to drinks/dinner. Being available and responsive to clients at all hours is also something that many law firm partners have to fully commit to, to meet the expectations of their clients and their firms; and this too can be impractical to combine with a family. Lady Justice Hallett recently noted that the “frenetic” pace of working life holds women back from reaching top roles in the legal profession (http://www.telegraph.co.uk/women/womens-politics/10078243/Law-firms-have-unconscious-bias-that-stops-women-from-getting-promoted-says-senior-City-lawyer.html).
There is an exodus of women who take time out of the profession after having children. A lack of flexible working and a billable hours focus in many private practice law firms often cause women to conclude that a law firm career is not compatible with being a mother to young children. It is difficult for individuals who take time out from the profession to return to work. It is often viewed as “brutal”, for both men and women, when it comes to returning after time spent out of the law. In our experience, it can be extremely difficult for individuals to secure a permanent role after more than a year or two out of the law, and hiring managers often infer a lack of commitment to a career or express concern over whether an individual has been able to adequately retain their technical skills. At SSQ we do encourage clients to consider a plethora of candidates, including those with time spent out of the profession, but we find that many clients are not open to this. There is however more flexibility in the interim/consultancy market, as may be expected.
Many law firms are adjusting their working practices in order to ensure they retain more women and can demonstrate a gender diverse partnership. Some key areas for consideration include:
1. The way in which revenue is generated. An increased emphasis on quality rather than time spent gives management a tool to push back with clients to achieve manageable deadlines and would therefore encourage firms to move away from a “billable hours” culture.
2. Proactive management of the culture of transactional teams.
3. Encouragement rather than tolerance of flexible working, which encompasses working from home as well as flexibility regarding the time of day work is undertaken, allowing individuals to juggle their time for competing commitments.
4. Drafting and implementation of a transparent policy around flexible or part-time working that is easily accessible and allows women who go on maternity leave to plan ahead and to feel comfortable that the firm too has planned ahead. This will give women encouragement to return after maternity leave.
5. An improved attitude to the recruitment of interim lawyers. We have found that law firms who make use of interim lawyers are able to be agile in meeting peaks and troughs of work and are resilient to flux in permanent staff numbers resultant from maternity leaves.
As discussed, there are a number of law firms actively embracing diversity and using it as a strong part of their marketing strategy. However, there is some way to go for most firms and some commentators have suggested that if law firms do not start to seriously consider the implications of ignoring diversity they will get left behind. Business advisers at Skarbek Associates have said “[law] firms that fail to improve gender diversity risk becoming “out of step with the modern world” and will be in danger of “being overtaken” by competitors with more female leaders (http://www.standard.co.uk/news/london/law-firms-will-fall-behind-if-they-fail-to-promote-women-10103016.html)
Women in in-house legal teams
FACT: Within the FTSE 100 there are 6 female CEOs and 16 female CFOs
The talent pool for FTSE 100 legal teams in the UK is generally top City law firms. It follows therefore that if law firms lack gender diversity, there will be a direct impact on the gender diversity in the legal teams of the FTSE 100.
We see nearly equal numbers of men and women who are seeking to move in-house, yet there are so few female lawyers in the role of General Counsel within the UK’s leading businesses. Traditionally, the executive management of FTSE 100s have hired transactional lawyers into the role of General Counsel. This is because M&A/ financing work is amongst the most high profile work and strategic in significance, therefore high priority for the management of the company. This allows the transactional lawyer to “stand out and be seen” amongst their peers. If there are more male than female transactional lawyers in private practice, it therefore follows that men will comprise a greater proportion of a shortlist for any recruitment, and therefore it is more likely that a man will secure these high profile in-house roles.
Within the in-house General Counsel market, employers hold exposure to different businesses in high regard, and it is important that senior individuals are able to demonstrate significant momentum in their careers. A very large proportion of women who either work part-time or are bringing up families remain with the same employer throughout this period, often because they have few external opportunities to consider on a part-time basis or because they are worried about moving to a new employer that might be “less understanding” than a current employer on their need for flexibility. This may prevent them being able to accumulate the experience required to differentiate themselves in an increasingly competitive environment, in order to attain senior level roles.
Another way in which individuals are able to differentiate themselves is through international exposure and relocation. Many of the FTSE 100 require lawyers (along with other business professionals) to relocate in order to progress within the organisation. It is a profile raising tool and valued way of getting to know the business culture and ethos. For men and women without personal commitments relocation is a realistic option. However, if there are children/elderly parents for whom women generally take primary responsibility, it becomes a much more difficult decision. Whilst nowadays there is increased prevalence of both partners having a career, it is still a rarity that husbands take a back seat to their wives’ career and it remains a relatively frequent occurrence the other way around. Therefore we tend to see a relocation as part of a man’s career rather than a woman’s.
The introduction of a quota system is something that is now widely discussed, but it can be seen as insulting to both men and women as it means that promotion is not based on merit. However, countries with a clear political commitment to change, who do instil the use of specific quotas and targets, are achieving significant results. For example, a study in Australia revealed that Norway, Iceland, Finland and Sweden nearly doubled their average number of women on boards as a result of imposed quotas (http://www.psychologicalscience.org/index.php/news/minds-business/putting-corporate-quotas-to-work-for-women.html).
Through our work with FTSE businesses we know that they are mindful of diversity and eager to influence change, but there is still more to do. Some of the proactive steps being taken include:
1. Applying pressure on law firms at panel review stage to encourage and demonstrate diversity, therefore widening the talent pool for General Counsel to recruit from
2. To continue applying pressure on law firms to field deal teams with more women
3. The encouragement of genuinely flexible and part-time working
4. Drafting and implementing a transparent policy so that individuals are comfortable that when they do become a parent, should they choose to work part-time, or delay going for a promotion, or cannot relocate, the management will be supportive
5. Adapting a business to attract and retain the best female talent and consider offering:
o Crèche facilities;
o Career breaks; and
o Career pause/go-slow policies.
6. Educating senior management that individuals with a variety of skill sets can be successful in a General Counsel role.
7. Considering shortlists comprised of women who have had career breaks and those seeking to work on a part-time basis, thereby diversifying the talent pipeline for the role of General Counsel and facilitating momentum in the careers of female lawyers.
Many of the issues around gender diversity begin in law firms. The fact that so many female junior lawyers are choosing to steer clear of transactional departments makes it difficult to expect an equal number of men and women in the roles of Managing Partner in a law firm and of General Counsel within the FTSE 100. It will be interesting to revisit our data in a few years’ time, as it is worth noting that in a world of increasingly stringent regulation, litigation and competition controls we are seeing an increased prevalence of litigators, competition lawyers and commercial lawyers secure the top legal roles, in-house and in private practice, which might create more opportunities for women.
There are key junctures in a career cycle which cause women to fall behind their male peers and in some cases women remove themselves from the legal profession altogether. In order to encourage diversity of ideas within the legal profession, law firms and companies must do all they can to promote opportunities for both men and women and show a commitment to helping women in particular during these key junctures.
Importantly women too must be mindful to proactively push their own career forward, and should recognise their own value, be confident in their abilities to do a good job despite managing competing priorities. In addition, women and men alike are empowered to influence positive change for themselves and for gender diversity as a whole. Many successful senior women have normalised female success in the organisations in which they work but they are not always as mindful as they could be to actively encourage change in order to provide opportunities for other female colleagues.
With a new female Prime Minister, a female German Chancellor and possibly the USA’s first female President on the horizon, now is the time for “gender bias” to become a term no longer used within the legal profession.