Lies, damn lies and the gender pay gap statistics - what do the figures really tell us?
The pay gap reporting requirements have presented a unique PR challenge for law firms - so who came out best?
April 09, 2018 at 05:26 AM
6 minute read
The deadline has passed, the data is in and the dust has settled. But while the gender pay gap figures do offer some new insight into the make-up of the UK's largest law firms, does the data really tell us anything of value?
The new disclosure requirements have presented a unique challenge for law firms – how to dress up figures which, on the face of it, do not look good, while also preserving their credentials as progressive employers.
This has come with the added dilemma of whether to go the extra mile and include partners in the figures, with firms weighing up the PR win for selfless transparency against the negative headlines featuring much less flattering figures.
But despite appeals from a clutch of firms for industry-wide transparency, less than a third of the UK top 50 included any information about partner pay, and just seven gave a combined pay gap figure for all partners and employees.
This lack of consistency – combined with firms cherry-picking various fee-earner groups to present the smallest possible pay gaps for discrete groups – means many questions remain about what meaningful conclusions can be drawn from the figures.
Almost all firms took great pains to explain that the pay gap is an entirely different issue to equal pay, and that their figures were skewed by large numbers of women in support roles. But these points should be self-evident.
One thing the data has provided is concrete proof of the scale of female overrepresentation in lesser-paid roles, with women on average making up about 75% of the lowest-paid quartile at UK top 50 firms.
Only two UK top 50 firms – Travers Smith and Freshfields Bruckhaus Deringer – have less than 66.6% women in their lowest-paid quartile, while five have more than 80% – CMS (83%), Simmons & Simmons (83%), Kennedys (82%), CC (81.5%) and Ashurst (81%).
This imbalance is likely to shift as new technology enables more firms to scale back their secretarial ranks and more men take up flexi-working and parental leave, but the size of the task is highlighted by the fact that even without partners, the UK top 50 average median pay gap of 29% is almost three times that of the overall median for UK companies of 9.7%.
Law firms are more than keen to tout their countless diversity initiatives (which the pay gap reports gave them the opportunity to do, at great length) but the question now is whether they can prove that these efforts are making a tangible difference.
While this first round of figures has provided some interesting findings, some of which are listed below, the real conclusions will come next year when the next round of figures show us which firms are making the most progress towards gender pay parity.
What the figures tell us
Pay gaps
- The average pay gap for the UK top 50 law firms is 20.5% (mean) and 29% (median) – significantly higher than the 9.7% median pay gap for all UK companies, even without the inclusion of partners.
- Fifteen of the UK top 50 included partners in their reporting – Clifford Chance (CC), Linklaters, Hogan Lovells, Norton Rose Fulbright, Eversheds Sutherland, Pinsent Masons, Osborne Clarke (OC), Withers, Holman Fenwick Willan (HFW), RPC, Trowers & Hamlins, Weightmans, Mills & Reeve, Irwin Mitchell and Ince & Co.
- However, only seven of those firms – CC, OC, Linklaters, Pinsents, Norton Rose Fulbright, Gateley and RPC – provided a combined pay gap figure for partners and employees, and among this group, a variety of different calculation methods were used, making a meaningful comparison difficult.
- The UK top 50 firm with the smallest mean pay gap is Irwin Mitchell (12.8%), while the firm with the largest mean pay gap is Womble Bond Dickinson (29.3%).
- The UK top 50 firm with the smallest median pay gap is DLA Piper (12.2%), while the firm with the largest median pay gap is Ince & Co (42%).
Bonus gaps
- The UK top 50 firm with the smallest mean bonus gap is Kennedys (13.9%), while the firm with the largest mean bonus gap is Hill Dickinson (69.3%).
- Four UK top 50 firms have zero bonus pay gap on a median basis – Kennedys, Shoosmiths, Fieldfisher and DLA Piper, while Gateley has a median bonus pay gap of 32.4% in favour of women. The firm with the largest median gender bonus gap is Travers Smith (78.4%).
- Seven UK top 50 firms pay bonuses to more than 90% of their staff, with Mills & Reeve top for both men (97.3%) and women (94.9%), followed by Watson Farley & Williams, Macfarlanes, Trowers, HFW, Slaughters and Shoosmiths.
- Two UK top 50 law firms pay bonuses to less than 15% of both men and women – TLT and Weightmans – while Berwin Leighton Paisner (BLP) pays bonuses to just 11.5% of women.
- The firms with the biggest disparities in bonuses for men and women are Stewarts Law, where 84.3% of men receive a payout compared to 62.9% of women; BLP, where 30.3% of men get a bonus compared to just 11.5% of women; and Womble Bond Dickinson, where 34% of men and 23% of women receive a bonus.
US and international firms
- Twelve US and international firms with more than 250 UK employees reported their gender pay gaps – White & Case, Reed Smith, Baker McKenzie, Kirkland & Ellis, Dentons, Weil Gotshal & Manges, Mayer Brown, Squire Patton Boggs, Latham & Watkins, Dechert, Shearman & Sterling and Jones Day.
- Latham has the largest mean gender pay gap of those firms and all of the UK top 50 (39.1%), while Kirkland has the largest median gap (68.2%).
- The average mean and median pay gaps for non-UK firms (28.2% and 38.3%) are significantly wider than the equivalent figures for the UK top 50 (20.5% and 29%).
- Six US firms – Latham, Weil, Shearman, Dechert, Kirkland and Jones Day – have wider pay gaps than any of the UK top 50.
- Jones Day was the only law firm to report which does not pay a bonus to any of its staff.
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