A new Law Society study reveals male solicitors' salaries far outstrip those of their female counterparts – so why does the gender pay gap still exist, and are law firms doing enough to tackle it? Caroline Thorpe reports

Lawyers have a problem with equal pay – and it's a big one. More than 40 years on from the Equal Pay Act, women in private practice are paid a startling 26.7% less than their male counterparts.

The finding, from a new Law Society study of solicitors' salaries in 2012, compares badly with the national picture: the law's gender pay gap is well over double the 9.6% difference between men and women's pay across the UK as a whole, as reported by the Office for National Statistics. And although the legal sector pay gap is down three percentage points from 29.7% in 2008, the report describes the drop as 'not statistically significant'.

Drilling down into the data, provided by 633 individuals working full time in private practice in England and Wales, reveals the average salary for a qualified male lawyer of any level was £60,000 in 2012, compared with £40,000 for women. In fact, men earned more than women at every pay grade. In the top quartile of earners, male lawyers received at least £95,000 a year – 46% more than their female counterparts on £65,000. The gap was largest among the very highest earners, where median pay for top-earning male equity partners was £150,000 a year, 50% more than their female colleagues.

The findings follow a Legal Services Board (LSB) report, published in February, which shows male lawyers' average pay first outpaces women's just a year after qualification. The regulator's review of Law Society salary data from 2008 reveals men's pay goes up 5.7% for every year of post-qualification experience (PQE), compared with a 5.1% rise for women. 

The Law Society is now calling for action. "Women lawyers are not going to 'mind the gap' forever. Some firms know this, but others risk losing a lot of talent if they don't tackle this," cautions society president Lucy Scott-Moncrieff. The LSB wants all legal services providers in England and Wales to "undertake and publish equal pay audits" to expose the worst offenders. "Voluntary action is preferred on this but only if it results in the changes needed," it warns.

Yet even firms committed to the cause seem reluctant to act: by the end of 2012 just a sixth of the large firms signed up to the Law Society's 'Diversity Charter' had undertaken a pay review, according to the LSB report. Besides which, for reasons largely unrelated to pay, women are already voting with their feet: while they have accounted for more than a half of new entrants to the profession for two decades, just 25.9% of partners are female (with obvious consequences for women's average pay). So why does the equal pay problem persist, and what are law firms doing about it?

"I firmly believe there's very little conscious bias out there," says Nicola Mumford, a director at Wragge & Co who is spearheading the firm's 'Women' initiative, which aims to increase the number of women in senior positions at the top 50 firm. "There are very few lawyers who say 'oh she's a woman, I'm going to pay her less'. But there's unconscious bias everywhere."

What little research exists on the subject backs her up: 92% of the difference between men and women's pay is down to things like their level of experience, grade or practice area, according to another Law Society study from 2009. The relative rigidity of the PQE pay structure means that any deviation from its strictures such as time out to care for family – work still performed overwhelmingly by women – is quickly reflected in the data. The body's study states that the remaining 8% of the gap is 'potentially' attributable to discrimination. 

Under the microscope

For Scott-Moncrieff (pictured), a pay audit is essential to understanding the exact nature of the problem, and its potential solutions. "Our research suggests that relatively few firms have reviewed their pay policies to ensure they don't have an unaccounted for pay gap," she says. "What we hope to see is firms introducing more transparency in pay structures and, if there is a gender-linked pay gap, concrete action to bridge it." 

"Pay audits are an absolutely intrinsic part [of our compensation process]," says Jane Wilson, head of talent at Addleshaw Goddard, who introduced annual audits when she joined from Pinsent Masons in 2009. The firm does not currently publish the results of its audits, but, says Wilson, "it's certainly something we would be open to".

"We get one of our analysts to look at the data. We'll do lots of splits by gender, age, race," she explains. "They will slice it any way they can to look for anomalies. We would then investigate each one and see if there was a reason for it." 

So far, she says, these probes have always explained any pay gaps – a prolonged spell away from work, for example, or a previous career in a different industry offering skills that command a premium in the firm. "If there was no valid reason, we would flag it," says Wilson. "The concept of equal pay is very much embedded. So when we come to run the pay audit I would be very surprised if any anomalies come up."

Yet Wilson argues that pay audits alone are not enough: "[They] are one of a number of different levers we need to use." Others agree, and top of the list is ensuring that more women make it through to partner – and the accompanying pay packet.

"If you look at salaries in isolation you reach the wrong diagnosis and, moreover, the wrong treatment," argues Mumford. "You need to tackle [gender pay gaps] holistically and realistically by looking at what is behind the pay gap… We've got to look at all the other areas that affect the rate of women coming through to partnership."

Key to achieving this at Wragges is "keep[ing] people in the firm who have juggled a family and a career; for example, someone who has done their part-time bit, taken their foot off the career gas pedal, but remained a very valuable resource… When they are ready to go for partnership we'll support them and I think they will be a fantastic role model."

Mumford adds that the process requires a "small change, big difference" approach. For example, women who wanted to take their BlackBerry on maternity leave faced such a mountain of form-filling that many were left feeling the firm did not want them to remain in contact while they were away. "So we scrapped [the forms]," says Mumford, simply. "A tiny little thing to do, but it made a big difference to the way the women felt."

Off the agenda?

Duncan Ward, operations director for legal at recruiters Badenoch & Clark, agrees that "there is definitely an issue with the number of women partners and that's something that we see some firms are addressing and some seem behind the curve on". He is pessimistic about progress, however. 

"Right now, if I'm entirely honest, the way the market has affected recruitment is it's about the business a partner can bring in. Firms are looking for candidates who can bring a book of business with them… so [gender] policies go out the window a bit. We never get into a conversation with [firms] saying 'we want this background, age, sex, environment or culture'."

While equal pay may be on the backburner for some law firms, clients could prove a different matter. Laurel Bellows, president of the American Bar Association and champion of equal pay at US law firms (see below), sees in-house lawyers as allies in the fight for fairness. 

"General counsel play an extremely important role," she says. "They can choose their team. So when GCs begin to take a role in the diversification of partnership, they're doing it because they're used to diversification of leadership in their corporations and they are placed to diversify their supply chain."

Given the rate of progress to date, whether all UK law firms will prove as enlightened as some of their clients remains to be seen. Even if they do, their response will require effort. "I felt sure this was manageable by putting a few policies in place. Eighteen months later, I'm thinking 'crikey this is a lot more complicated than I thought it was'," heeds Mumford (pictured).

Moreover, Scott-Moncrieff's insistence that "pay equality shouldn't drop under the radar" is eerily reminiscent of Law Society chief executive Des Hudson, who in 2008 called on firms "to work with us to slim the [pay] gap". For the sake of half the lawyers out there today – and those invested in them – let's hope firms listen this time. 

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Money matters: the US example

Laurel Bellows doesn't mince her words. The US gender pay gap, says the president of the American Bar Association (ABA), is "inexcusable".

"We're talking about comparable pay for comparable work here – we have to emphasise that," she says. Last year average compensation was 30% higher for male partners in US law firms than female partners, according to research by Major Lindsey & Africa, a legal services consultancy.

Bellows is driving the ABA's Gender Equity Taskforce, which recently published a toolkit – created by male and female equity partners – for tackling pay inequality.

"We've found it's quite important to emphasise that we have to educate. People are well-intentioned, but may not be aware that a wage gap exists," says Bellows. 

She also calls for recognition of 'implicit bias' – the act of promoting "the person most like you, because that's the person you trust most". In the US, she says, this pattern has seen the most lucrative work concentrated in the hands of richly rewarded 'relationship partners'.

Her advice to those tackling pay inequality includes ensuring women are central to the firm's vision. "Succession planning is extraordinarily important… [M]any partners seek to retire at 60, 65. Who is inheriting their files? That's an extremely important conversation to have early on. Firms [must] seek to address whether there's a pipeline of women to inherit [that work], so that women would succeed as relationship partners."

The bottom line? Money does matter.