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Law firms must not become complacent about gender diversity

The last two years have seen a number of important milestones in the history of women in law. Last year marked the centenary of the Sex Disqualification (Removal Act) of 1919, which paved the way for women to become lawyers. And this year marks 100 years since the first women were awarded degrees at Oxford University: Until October, 1920, women were allowed to study but not admitted as full members and were not entitled to claim the degrees they had earned.

Over the course of the last century, significant progress has been made. Over half of all law school graduates in the UK are now women. Recently, Freshfields became the first Magic Circle law firm to appoint a woman into senior management when its partnership elected Georgia Dawson as Senior Partner. And perhaps more remarkably, the proportion of women becoming partners at British law firms topped 50 percent for the first time, according to a recent Chambers’ annual report on the industry.

While there has been progress, we remain a long way from achieving true gender parity in the business of law. In the UK women are still vastly underrepresented at the highest echelons in the legal industry, accounting for just 20 percent of partners in the top 10 law firms. Male partners still out-earn women by an average of 24 percent.

As we take stock of these milestones, we should proactively consider what else we can do to move the needle. Both law firm leaders and law firm clients can play a role in advancing gender equality in the industry.

Law firm leaders should foster diversity

Studies have shown that women lawyers are subject to a multitude of unconscious biases—given less credit for their ideas, interrupted more often than their male colleagues and given fewer opportunities to influence within their firms. Firm leaders should therefore tailor career development for women lawyers by offering them the tools necessary to be more successful in the workplace, ultimately achieving promotion and seniority.

The Equity Project is an example of one such tool. Burford launched The Equity Project, a ground-breaking initiative designed to close the gender gap in law by providing an economic incentive for change through a $50 million capital pool earmarked for financing commercial litigation and arbitration matters led by women. By providing capital on the proviso that a woman lawyer is receiving origination credit, serving as client relationship manager, or leading the case, law firms and clients are incentivized to ensure that the lawyers working on their matters are being fairly credited and adequately compensated for bringing in new business.

In-house lawyers can use the power of the purse for change

As the clients of law firms, GCs and Heads of Litigation hold a lot of sway over law firm decision-making when it comes to diversity.

Earlier this year, Swiss pharmaceutical giant Novartis launched a new Preferred Firm Program which requires all law firms with whom they work to commit that no less than 30% of billable associate time and 20% of partner time be provided by women lawyers or lawyers who are otherwise diverse. If a firm does not meet the agreed-upon commitment for any matter, Novartis has pledged to withhold 15% of the total amount billed over the life of that specific matter. Some notable big law firms have already been ousted from the Novartis panel as a result. This is a powerful example of an in-house legal department using its considerable economic clout to accelerate the rate of change.

However, the 2020 Equity Project study, published earlier this year, revealed that 80 percent of GCs and in-house lawyers said their companies lacked a formal diversity policy citing bandwidth and internal aversion to policies or quotas as key reasons. This is a missed opportunity to positively impact gender diversity in law.

Why does diversity matter now?

Given the economic fallout arising from the Covid-19 crisis, diversity initiatives have taken a backseat at some law firms and companies. However, it is exactly at times like these that diversity in leadership positions is most critical—for decision making and for diversity of thought.

It is not only the right thing to do; there is a strong business case for prioritizing diversity in a downturn. Studies have consistently shown that companies with greater gender diversity at senior levels and on their boards perform better against every metric.

A recent study released by McKinsey & Company, Women in the Workplace, shows that the pandemic has intensified the challenges that women already face in white collar companies, now that the boundaries between work and home are blurred. An alarming one in four women are now contemplating downshifting their careers or leaving the workforce entirely due to burnout. If companies do not act to combat this, years of progress could be lost as will a substantial portion of the workforce.

Now is the time to keep the foot on the pedal and to keep gender diversity high on the list of strategic priorities.