Should all law firms be compelled to reveal pay-gaps?
Ever since the BBC published details of the salaries paid to its top people earlier this summer, pressure among other sectors has been mounting to do the same. Now it’s the turn of the legal profession.
The furore that enveloped the broadcaster had the effect of bringing the issue of gender pay into the mainstream, but new government proposals could soon see Britain’s biggest law firms compelled to reveal the salaries of their highest earners.
As it currently stands, the proposals only apply to publically listed companies. However, the Financial Reporting Council (FRC) has been asked to draw up a “voluntary set of corporate governance principles” for privately held businesses. According to the Law Gazette, law firms will be “encouraged to sign up to the code”.
This has to be good for the sector. Women make up half (50.2%: The Law Society) of all legal practitioners in the UK, yet they are paid an average of £23.29 an hour. Their male colleagues are paid an average £25.99 per hour – approximately 10.3% more. While this is still below the national average (18/1%), the gap still exists but law firms could narrow this even further by following the lead taken by the Nordic states.
According to the 2016 Global Gender Gap Index, Iceland, Finland, Norway and Sweden top the table when it comes to promoting greater equality in the pay stakes. And the way they do it is by ‘accountability’.
Indeed, Sweden and Iceland, for instance, require all companies of 25 or more employees to collect data on pay levels each year, with those companies failing to take appropriate steps to close the gaps even further at risk of facing steep fines. Iceland is actually preparing to take things even further.
In April, the government in Reykjavik proposed a bill mandate equal pay for both the public and private sectors and irrespective of gender, ethnicity, sexuality, or nationality. It may be some time before other nations make similar calls, but the code being drawn up by the FRC would certainly be a step in the right direction even if it is only applied to larger practices in the first instance.
According to the FRC, “Irrespective of who owns a company, this is about large employers recognising their responsibilities. Large law firms may wish to consider this…It is right that we develop a set of corporate governance principles to enhance confidence that they act in the public interest.”
Of course there is no silver bullet to in the elimination of the gender pay-gap. Biases, whether unconscious or otherwise, that favour men over women for certain roles will still exist as will issues of childcare, maternity and paternity. But transparency in pay is a great start and like all good starts, momentum soon follows which can lead to greater strides being made.