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UK Law Firms - Never Mind AI - Watch Out For The Gender Pay Gap

Posted on October 25, 2016 at 5:05 PM

The writing is on the wall for UK law firms - covered by me on Forbes regarding digital transformation and the opportunity as well as the disruption offered by Artificial Intelligence.

But there's another very important transformation they face - meeting demands on gender diversity.

On Page 47 of the latest PwC Law Firm Survey 2016, the report says (my emphasis):

"Diversity continues to be a concern, particularly at partner level. In line with previous years’ trends, the relatively balanced gender diversity of fee earners continues to deteriorate at partner level with only 18% and 17% female full equity partners in Top 10 and Top 11-25 firms respectively. As firms prepare for gender pay gap reporting they will need to consider the flow of diversity through the business to understand where and why females are leaving the business before adopting strategies to mitigate this."

This is of course because as of NOW - October 2016, employers with at least 250 employees in the UK will be required to publish information about their gender pay gap.

As the report points out: "Employers must take a pay data “snapshot” as at 30 April 2017 and publish details of gender pay gaps by April 2018 (and annually thereafter) on both their own and a government website." (my emphasis)

The main point to note is that key information including gender pay, bonus gaps and distribution of male and female employees (including partners) across the salary spectrum will be in the public domain.

"It will therefore be easy to compare firms’ gender pay information. This may give rise to reputational risks, impact on procurement process and present employee recruitment and engagement challenges" says the report.

It lays out the particular challenges for law firms:

The gender pay gap can be influenced by a number of factors and certain pay gaps may be justifiable, it says. And it identifies these areas which may present challenges for law firms:

- pay banding based solely on post-qualified experience or pqe - "any pay gap within a band is diffcult to justify and may give rise to equal pay risk" says PwC

- discretionary bonuses. They can call out the assessment of the fairness of  the assessment process, it suggests.

And, of course: partners.  A high number of male partners will lead to substantial gender pay gaps, it points out.

And in true lawyer-speak, the report suggests:

"It is important that firms understand their current gender pay gap and the underlying causes. This will enable them to identify and start to mitigate risks ahead of disclosure and to prepare a clear explanation of overall pay gaps."


Categories: Appointments, Diversity, Women