Law Firms Need to Increase Numbers of Senior Women to Stay Competitive

Women Count 2018 found that in the last three years there has been no progress on gender diversity in senior roles in the FTSE 350 – and by some measures, it is going backwards. Women Count is the third annual report by The Pipeline, that tracks and analyses the number of women on Executive Committees of FTSE 350 companies. The report found that:

• The ratio of women on Executive Committees of FTSE 350 companies has stayed the same at only 16% since the first report three years ago.
• 95% of all P&L roles on Executive Committees are held by men and just 5% by women, a decrease on last year – most women instead perform ‘functional’ roles such as HR, marketing, legal or compliance.

• The percentage of women executives on main boards has flatlined at 8% between 2017 and 2018. This means 92% are still held by men.

Despite these shocking statistics, British businesses expect firms providing professional services to be more gender diverse. With the service sector delivering 79% of UK GDP, this points to a growing issue for the legal sector.

It is becoming the norm that businesses purchasing services from other businesses expect, as a bare minimum, to see women on the presentation team that is attempting to win the work. In response to this, it has become an unwritten rule that organisations pitching for services present gender diverse teams. This is particularly true amongst the larger firms providing professional services such as legal advice, accountancy support and consultancy.

The Pipeline is now also seeing that firms pitching for services are being closely questioned on whether the same women presented in the team will also actually be delivering the work. The high standards business expect law firms to demonstrate, was also seen earlier this year by business’ response to gender pay gap data law firms released. The FT reported on 23 March 2018 that some of the top law firms had come under pressure from their clients to include partners in their gender pay data.

It goes without saying that those firms with greater numbers of senior women will have a competitive advantage over their peers. However, this won’t be an easy task. A 2017 PwC report, highlighted that leading firms have significant imbalance at equity level where 80% of partners at the top 50 law firms are men.

Laura King, Partner, Global Head of People and Talent, Clifford Chance: “Gender balanced teams are better for our clients, better for our business and better for our people – so ensuring our pitch teams are representative of society is our goal. We (and our clients) know that diversity leads to better service and problem solving, and clients and prospective clients have expressly requested that we field diverse teams when pitching to them. It’s not just the right thing to do, it’s a wise business decision.”

Lorna Fitzsimons, Co-founder of The Pipeline said: “This is an issue of competitive advantage and profitability which is echoed through FTSE 350. Companies who have at least 25% of women on their Executive Committees have the potential to benefit from 5% greater profit than companies that have no women. This adds up to a £13bn gender dividend for all of Corporate UK performing at the same level on gender diversity.

We’ve already seen that hundreds of US corporates signed the call to action on diversity set out by the General Counsel of Sara Lee. This confirmed their commitment to only procure services from diverse law firms. With UK companies starting to pay closer attention to the diversity of law firms, it’s just a matter of time before considering diversity before buying services becomes the norm on this side of the pond.

Since our poll confirmed that 59% of young people believe all male or male dominated workplaces should be a thing of the past, law firms that increase the number of women in senior roles, will stay ahead of the pack.”

(Source: The Pipeline)