Strategic equality: Fixing the 'male problem' in law firm partnerships

Why are many law firms still failing to develop gender-balanced partnerships and senior management teams? Manju Manglani reports on the findings of Managing Partner's roundtable

Many law firms have strong pipelines of female talent, to the point that women regularly constitute more than half of their trainees and associates. However, the majority continue to record low gender diversity levels in their partnerships.

At international law firms, women often make up less than 20 per cent of the partners. Women in London, regional and national firms fare somewhat better, at about 25 per cent of the partners on average.¹ However, female representation is significantly lower at equity partner level; among the UK's top-25 law firms, women make up between 15 and 17 per cent, fractionally up from the 14 to 15 per cent recorded in 2008, according to PwC data.

Managing Partner's roundtable on gender diversity considered the impact
of firm culture and working practices on talent retention, the effectiveness of quotas
and targets, and the approaches which
are most effective in developing and retaining female lawyers.

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Culture and strategy

Manju: Why do you think diversity levels continue to be low in many partnerships and senior management teams?

Lauren: We have to look at law firm culture. I think a huge part of the problem is that law firms separate their strategic initiatives from their diversity and inclusion efforts. As long as these two stay separate, I think that we
will continue along the same path.

If you look at any strategic planning process or conversation firms have around their future direction, the focus is on revenue, on lateral hires or mergers, on clients, on sectors for client development - it's about the economic issues. But it's generally not about diversity and inclusion issues.

The general sense is that diversity and inclusion are not part of the management focus; it's left to other people outside the structural management of the firm. I think this has a tremendous impact on why the numbers have remained stalled. It is not a strategic priority, and diversity and inclusion are not recognised as factors affecting the firm's bottom line.

Manju: Kate, you've done some research on gender diversity trends in the UK legal market. What did you uncover?

Kate: If we look back to 2008, 15 per cent of equity partners were female in the top 10 UK firms; in 2014 it was 17 per cent. And, in the next tier down - the top 11 to 25 firms - back in 2008 it was 14 per cent, while in 2014 it was 15 per cent. So the statistics are showing that there's not much headway being made. And that's from a trainee intake of more than half.

If you look at the engine room of the law firm, around the one to five years of post-qualification experience, again you've got a majority of females, so it's really once you get to the very higher echelons that you start to lose that representation.

In terms of PwC's own results, we
now have 17 per cent of equity partners, so we are mirroring the top 10 law firms. The difference I think, for us, is that in 2005 we were at eight per cent, so we really had a shift of the dial over the past ten years. I think that has been very much led by a shift in the tone from the top.

As Lauren said, it is down to trying, as much as we can, to really frame this as a business issue, rather than as an HR or equality issue. I think the more it can be framed as an absolute compelling business issue, the more traction you get.

Gina: A significant reason for the plateau in the number of women partners is the culture issue and the fact that discussions about law firm strategy and growth have not coalesced with those about diversity and inclusion.
I don't know that we'll ever be able to get to 50 per cent diversity until the business of law as practiced by large law firms
today changes.

Manju: Cyril, it's been a quite different experience at your
Indian law firm, hasn't it?

Cyril: Yes. We have a very different sort of statistic for gender diversity. Across the
firm, that is including all employees, we
are roughly just a little less than 60 per cent. At the partnership, which includes non-equity, we are a little over 50 per
cent and, at the equity level, there are
40 per cent women.

I think this also reflects what's happening at the campuses as well,
with a large number of women coming
into the law. In some colleges, the statistic is very startling; they have almost 90 per cent representation of women.

I think there is something fundamentally socially changing in India as women are becoming self-employed and are also pursuing independent professional careers, like the law, which is seen as a very safe profession.

Kate: I wonder if there's something interesting in there about you being less hampered by tradition and by traditional firms? I think a lot of our ingrained problem is a lack of role models and a bit of the 'mini-me syndrome' and unconscious bias, where inevitably, if you've got a partnership of males, where they tend to see the potential is more likely to be in people they have an affinity with.

There's a lot of hard work, I think, that needs to be done to overcome that unconscious bias. And I think the same
is true in the PwC network, where we've seen that some of our emerging markets have firms that have got the best female partner representation.

Cyril: I think that we've been a
bit of an outlier in the Indian context but, that being said,
even other law firms seem to have a fairly high proportion of women; maybe not as much as us, but not too far behind us either.
There may be social and professional reasons, one of which I think is the family system works differently here, as many families stay together as joint families,
which provides a support structure.

Flexible working

Manju: How important is flexible working for increasing gender diversity at the top levels?

Kate: The more we work with technology, the more flexible working will become accepted as a norm. Firms may have a much more mobile workforce and a much more contingent workforce that can be flexed up and down to meet key demands.

That may be driven by recognition that it's more acceptable for people to work remotely and not have that constant culture of presenteeism and long hours that I think is fairly ingrained at the moment. All of that may make it a little easier to manage some of the work or parenting issues I think some people face, particularly working mothers.

Manju: Do you think then it's a question of work-life balance?

Kate: No, actually. It does quite irritate me when people equate a diversity issue with work-life balance issues. I think it's clear that many of the same issues in promotion and retention apply to women who don't have children, and there are plenty of men working who do have families. I think that the underlying problem exists regardless of that.

Lauren: I think that is such an important point to emphasise.
The data simply does not support that the reason for the low numbers of women in the equity partnership is due to work-life issues. The fact is, when women leave large firms, the data supports they're going somewhere else where they're working very hard.

We really have to start looking more internally as to the root causes. We have
to focus our lens at the firm's culture,
at unconscious bias, at the kind of training and development that is provided and the tone that is set for full inclusion. It's very easy for law firms to say 'this is a very highly pressured environment and we understand that women have a lot of pressures, a lot of pulls on their time, and will therefore leave at some point if they don't feel that they can balance this time well'. That misses the point; the data doesn't support that at all.

Gina: I think flexibility is part
of it, but, ultimately, too much connectivity and access is also negative. I think it leads to a lot of long-term stress in both men and women and it's the inability to shut off the work that is less compatible with long-term happiness. It's
a line that people are trying to navigate. Right now, it's not only about flexibility and it's certainly not about serving only women with families. I think it's the long-term issue of being able to live your life when work is omnipresent.

Manju: Do you think senior
female lawyers leave law
firms and join in-house legal departments because they are seen
to provide better working environments
and career prospects?

Kate: I suspect that 'always on' culture is less prevalent when you're not client-facing. I'm sure it's still a highly stressful environment and there is undoubtedly a desire to remain connected at some times, but I suspect
that 'always on' culture is slightly less
once you go to an in-house role.

Gina: The perception of having limited long-term career prospects at the law firm may or may not be accurate - the culture of a particular law firm may give women the view that they cannot do well. I also think, with some women, that they look at those in charge and they either don't feel a connection
with those individuals or don't think they want the life of those individuals.

Some women have the idea that, in an in-house role, you might have a certain amount of control that is lacking in law firms and, at a company, you may have the ability to manage your life as a whole - whether it is because you have children or parents or just interests outside of the law firm. I think it's a driving factor and that it will become more pronounced with the younger generation. I think they have more acute ideas of what it is they want in life and maybe less interest in making the kinds
of sacrifices that sometimes come with
law firm life.

Lauren: I think millennials coming into the workplace are being mischaracterised and misjudged and it is important to look behind these perceptions. The data on this generation shows that young men and women expect to do a better job than their parents and other adults in their lives at integrating their work demands and their family demands,
as well as their desire for health and wellness and a personal life.

Although the data skews a little more heavily from the women respondents, you see a trend that is relatively gender neutral. This suggests that leaders in any business organisation, but particularly in law firms, who are thinking about succession and future leadership roles, have a huge challenge ahead in trying to bring into the fold young people falling into the workplace with very different views of what they want their life to look like.

Kate: One of the reasons we see women leaving is as a result of an ambition gap, or a preconceived idea that actually the life of a partner won't suit you later in life when you might have children. I think we see people half making that decision before they've even got to that stage and it's a dilemma that may never actually materialise.

The more we can encourage women to 'lean in' rather than 'lean out' too early, to use Sheryl Sandberg's terminology, the better. We want to foster ambitious women who have the aspiration to make partner rather than opting out too soon in case the lifestyle doesn't suit them later - that could make quite a significant difference.

Leadership development

Manju: Do you think women need dedicated leadership development programmes to help them to progress to equity partner and senior management level?

Kate: We have a very successful women's leadership programme called 'Breakthrough', which is for our most talented women with director and partner potential. A key aspect of our programme is that each of the participants gets a sponsor - and whilst it doesn't need to be a male sponsor, a lot of the sponsors are male.

We draw a distinction between the role of a sponsor versus the role of a mentor. I think we've found that women are quite good at seeking mentors, but that can be quite touchy-feely and doesn't necessarily help them through the promotion process. It's important to have a sponsor who truly believes in your potential and is therefore helping you to carve your way through some of the politics and to push you forward and to help promote you - that's actually quite
a valuable differentiator.

What we've found is that, by getting a whole range of our senior male equity partners involved in that programme in a sponsorship capacity, it has opened their eyes quite a lot to the issues around gender diversity. They go back into the business more evangelical about really seeing the business and commercial benefits of a more diverse partnership.

I think it's fairly well documented in gender research that women tend to focus on the bits of the job they can't do, rather than the bits they can do well. So it's actually really about identifying where women's strengths are and, at the same time, how they could be better at articulating what they want from their career and actually pushing themselves forward
a little bit.

Some of the parties are reluctant to go on a course that's specifically for women, because there's absolutely no desire to be given an unfair advantage. The way we've positioned this is actually as a levelling of the playing field, so we're not seeking to give an unfair advantage to the women coming through this programme; rather, we're trying to address an unconscious
bias that currently exists.

Lauren: I agree that leadership development programmes for women at particularly important stages of their career can be extremely helpful based on some of the research which shows, for example, that women tend to be very hard on themselves. It's important to implement leadership programmes and help women to focus on their internal strengths and develop strategies for moving forward.

But my own feeling is that it should also be coupled with unconscious bias training, generally within the firms. Because, even when you have strong, capable, talented women at all levels,
there are still institutional practices that continue to impact their advancement.
A lot of that is embedded in unconscious bias - the things that everybody brings to the table with respect to how they judge and evaluate others.

Kate: Yes I would absolutely endorse that. At PwC, we've now got three generations of unconscious bias training, which has won a number of awards and is a mandatory e-learn for everybody in the firm. That flows through to really embedding diversity considerations into all of our processes and initiatives. So, for example, we look at it from a recruitment perspective and we look again from a performance management perspective.

Whenever we're doing a promotion interview - at various gateways through the firm there will be interview panels - we will always make sure there's at least one female on the interview panel. So this is really embedding diversity awareness throughout the process. Similarly, before we do our staff moderation meeting where we're grading different staff on performance, we will read a statement to formally remind everybody about unconscious bias and diversity considerations at the beginning of that meeting just so that it is front of mind
for everybody. And then it's a case of calling out bad behaviour when you see it.

I think certainly our culture has changed in that respect very much through our open-mind training, which looks at unconscious bias. So many things now are no longer acceptable which previously would have been acceptable.

Gina: Creating more collaborative environments for business generation can be important. This means devising incentives for partners to introduce not just the female associates who they're sponsoring but also their female law partners to their clients as potential opportunities.

The extent to which women partners can develop those clients and relationships can be key to women partners' ongoing success. It's not a question of being able to do the work; it's really being top-of-mind so that partners make those introductions of their female partners and associates. It goes together with the other things we talked about, such as programming to ensure women have the leadership and client development skills to take the business even further, which is often coupled with unconscious bias training. So I think all these different things are needed, particularly in law firms, where the metric is money and client revenue generation.

Lauren: What I often hear in law firms is that men have better business development and client origination numbers, so therefore they're paid more and they are elevated more quickly. But the piece of it that is very clear anecdotally but lacking in data is that men also inherit substantially more origination points for client matters than women, and that impacts the numbers significantly. If women are not included in that informal process of inheriting work and origination credit, then the playing field is not level for them in that very important metric when it comes to being considered for partnership, as well as when it comes to their compensation.

Kate: The more women leave to take up in-house roles, the more they will rise to the top of their in-house professions and be the buyers of legal work. Certainly what we see, and what we get direct feedback on when we're pitching for work, is that there is a real business imperative now to field a diverse team when you're pitching for work. All-male teams aren't well received by clients, who are often much more diverse on their side than we are on ours. I think once you can link diversity to a real business imperative and a commercial
win, it's much easier to get traction within the partnership.

Quotas and targets

Manju: Looking now at quotas and targets, research has shown that they have been effective in helping to increase gender diversity in corporate boardrooms. Often, there's a link between greater diversity and better financial performance in listed companies. So, there seems to be a business case for quotas and targets but, at the same time, it raises the question of whether women need special treatment to get ahead. What would be your view on this?

Cyril: Ironically, what's worked for us is the fact that we don't do anything specific for women, because I think they're very proud and they want to be treated equally. It's only during the time when they are starting a family that they require special treatment. Other than that, I don't think the women in our firm expect anything different from the men. They really want to be treated just like men, as the moral basis of which they would then see that they are entitled to an equal opportunity, as their career could rise to the highest position. We have many women who are heads of practice areas and practice groups and, had we treated them as women separately, I think they would have resented it.

Kate: We've steered very much away from quotas, but we will absolutely have targets that we hold various levels of management responsible for on a 'comply or explain' basis. So, for example, we will look at how the performance ratings across a grade fit with the gender split across that grade.

From my perspective, I would certainly not be in favour of quotas. I think there's a risk that they become detrimental; you might have some very talented women who would have come through on their own right and people would then think they've only come through because they're part of a quota. I think you breed discontent amongst the male population, because then you make it much more divisive.

If you look at where quotas do exist around the globe, territories only ever hit their quotas, they don't ever tend to exceed the quota, which is probably speaking volumes in its own right as to whether the quotas are any good at shifting culture and behaviour or whether they're just there for a tick-box exercise.

Lauren: What if the question was reframed away from the word quota and more to a focus on metrics? Just as firms have set metrics and goals around business development targets, billable hour targets, the whole range of direct economic issues, how would you feel if we talked about whether firms should be setting goals in developing metrics around diversity and inclusion for women and other minority groups?

Kate: Yes, absolutely, I think that's imperative. That's a very different position to be in, I think; ideally you set targets and give recognition if targets are achieved, or hold people to account if targets aren't achieved and should have been - but recognising that they shouldn't be achieved at all costs, if you haven't got the right skill set and the right pipeline. You need a target and you need to be able to measure how you're progressing towards that target, otherwise I think it's very hard to shift the dial.

We also see the benefit of that in pipeline planning. So, our chairman has spoken very passionately about diversity although, when he first took on the role, he had no females on the executive board, which caused quite a few ripples in the firm. We're now at a stage where we've got 25 per cent females on the board - and part of what I think the leadership programme provides is visibility to the board of who the longlist of potential partner candidates are. Our executive board now personally review that partner longlist and track the progress of people on there, so it's not possible for there to be a female on our longlist who just disappears because she hasn't been given the right opportunities or the right mentoring or sponsorship.

So, I think having a target and then working out what you're going to do to try and get yourself closer to that target is a really powerful tool. And I think that's much more palatable to all than a quota.

Gina: My law firm recently announced that we have a target of 30 per cent women partners and women in our management committees by 2020. This is a global target, so every region has been given this target, as well as the firm's global management, which is already at 30 per cent. But, the goal is for all regions, as well as the global unit, to be at that 30 per cent or above. So, we hope to reach the target and then go beyond that targeted percentage.

What I find helpful, especially in my role as chief diversity officer in the US, is that it gives me the rationale to do these other things our panel has been talking about and that are going to be necessary. Because we all understand it's not just about setting the target and then letting the system run the way it's always been run. It's about putting in place all these other pieces that are going to be critical for making this a successful initiative. Ultimately, I think it can be very, very powerful in changing the culture at
our law firm.

Lauren: To the question of whether anyone should feel uncomfortable accepting
a position under a target, I think that's
a false choice, because it's as important
to set metrics around inclusion as it is
to set metrics around economic success.
It's not like people are setting targets
that exceed the number of women in
the profession, or exceed the number of women in the pipeline. You're still setting targets that are important, but are not at
all out of step with where women are.

Based on data alone, women should have achieved nearly 50 per cent parity as partners at the turn of the century. So, the fact that we're not there suggests that these measures and other types of metrics are really important to make a difference.

Diversity or equality?

Manju: Do you think this should be reframed as a gender equality issue rather than as a gender diversity issue? It's like using the word 'tolerance' instead of 'acceptance' - it implies you have to put up with it, rather than doing that which is expected as
a minimum standard, which is ensuring equal rights.

Lauren: I like to think of it as
an inclusion issue and I also
like to think of it as an equality issue, and I think both concepts are really important. I think people want to feel that they are part of a respectful and inclusive workplace. People want to feel that they make fair decisions and that equality is an important goal worth achieving. So, I think they both are important words in this conversation.

Gina: I don't disagree with Lauren; I think that the word 'equality' will appeal to some people in different ways than the word 'diversity' will. I think, to the naysayers, neither will necessarily get you there.
I think that there's a benefit to qualifying
it in both ways because people may be more responsive to one versus the other.

Manju Manglani is editor of Managing Partner (www.managingpartner.com)

Endnotes

1. See 2014 Gender in the Law Survey, Chambers Student UK

2. This is an edited copy of Managing Partner's roundtable discussion on gender diversity, which was held on 25 November 2014