Legal firms in London are divided over gender pay gap.

by Hudson Mckenzie Lawyers and Solicitors who understand you

As companies raced to report gender pay gap statistics in recent times to fulfill with new U.K. laws, an unanticipated issue unfolded. While most banks published gaps of more than 40 percent, law firms appeared to fare much better. That was until it emerged they were excluding partners -- their best-paid tier -- from the data.

Under new legislation in Britain, legal firms in London with 250 employees or more must report the hourly wage and bonus pay gaps between men and women. While it’s illegal to pay people in the same role different amounts, the new legislation reveals a different problem: Men generally monopolize the best-paid roles and women remain at the bottom.

For law firms, the issue has long been emphasized by a lack of female partners, with rarely more than a fifth of partnerships made up of women. But in a move unexpected by lawmakers, most law firms haven’t included their partners in the data because they’re paid from profits, and as such considered shareholders rather than employees.

A number of the big accountancy firms also excluded partners from their reports before restating their figures in response to pressure from lawmakers. Deloitte’s average gender pay gap jumped from 18 percent, excluding equity partners, to 43 percent, while Ernst & Young went from 20 percent to 38 percent.

The exclusion of partners sparked outrage from politicians who criticized lawyers for complying with the letter rather than the spirit of the law, yet only a small group has decided to restate their figures. Overall, nine firms from the top 25 have included partners in their gender pay gap reporting, according to Bloomberg News’s analysis of the data. Of those that have provided a firm-wide number, the average hourly wage gap is about 60 percent.

One issue faced by legal firms in London is the different partnership structures, with some running a full-equity model while others have salaried partners that take some share in profits. This can make it hard to measure and get like-for-like comparisons among firms.

Firms that don’t release the numbers risk falling out of step with the “social mood,” said Tony Williams, founder of Jomati Consultants, which focuses on the legal industry. "I think they are missing a real point in the current social and political environment," he said.

Staring at the government records, which doesn’t include partners for any firm, DAC Beachcroft and Simmons & Simmons had the largest gender pay gaps based on the mean hourly rate, at 27 percent and 26 percent. The average median hourly pay gap for the top 25 firms was 28 percent, while the average difference in bonus pay was 43 percent.

A spokesperson for a leading law firm said the figures were affected by a largely female secretarial population and the firm was taking steps to improve its diversity. A spokesman for another law firm declined to comment beyond the firm’s pay gap report.