Posted by Patrick Herald, Compliance Expert at Legal Futures Associate Access Legal
Diversity: Business benefits
Imagine a legal sector where every client feels represented and every employee feels valued.
Diversity and inclusion, along with equality and equity, are increasingly common terms we encounter in professional life. The legal sector is no exception, with many articles on the subject appearing in the legal media. This article examines why law firms should prioritise diversity and inclusion to reap substantial rewards.
What do we mean by diversity and inclusion?
By diversity, we mean the range of human differences. This takes many forms, but some are especially salient for law firms.
Under the Equality Act 2010, there are nine protected characteristics. These are both illegal to discriminate against, and they also help paint a picture of what we might consider when thinking of diversity.
The protected characteristics are: age, gender reassignment, being married or in a civil partnership, being pregnant or on maternity leave, disability, race including colour, nationality, ethnic or national origin, religion or belief, sex, and sexual orientation.
While these are all important characteristics representing human diversity, we can envision others as well. For example, socio-economic status or background is not a protected characteristic under the Act, but it is another way people are likely to have very different life experiences from one another.
Inclusion both recognises and welcomes diversity. Inclusive practices are a necessary complement to diversity; knowing diversity exists doesn’t do us much good if we don’t act on it.
It is one of the Solicitors Regulation Authority (SRA) principles that firms, solicitors and other law firm employees act “in a way that encourages equality, diversity and inclusion”. This is a requirement you cannot afford to ignore if you are in the legal sector.
For anyone who remains sceptical, though, here are five reasons, in addition to the SRA principles, that equality and diversity matter for law firms.
1. Diverse workforces are more effective
It is becoming increasingly common knowledge that diversity can enhance effectiveness. One study that looked at multiple nations found that higher numbers of immigrant students had a positive effect on test scores – for both the immigrant students and native students.
Likewise, the workforce has seen positive results from diversity. McKinsey has researched this topic extensively, producing a series of reports about the business case for diversity.
In one, fittingly titled Diversity Wins, McKinsey looked at over 1,000 large companies across 15 nations, concluding after years of research that the “most diverse companies are now more likely than ever to outperform less diverse peers on profitability”.
One striking finding that law firms should note is that “companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile”.
This is particularly relevant for law firms, because while 62% of solicitors are women, only 32% of full-equity partners are. Addressing this discrepancy and others like it would likely be highly beneficial to law firms.
2. The legal sector does not yet reflect society’s diversity
Unfortunately, while progress has been made, the legal sector has some way to go before society’s diversity is reflected in the legal workforce.
The SRA releases detailed reporting on equality, diversity and inclusion. Generally, the data from 2023 shows law firms becoming more diverse over time.
However, this is not the case for every category, and there are also areas where law firms are significantly less diverse than UK society overall. There are also some significant discrepancies between small, medium and large firms: the data reveals large law firms to be less diverse across a number of categories than smaller firms.
Here are just some of the SRA findings:
- The proportion of disabled lawyers doubled between 2015 and 2023. However, at 6%, it is still significantly lower than the percentage of disabled workers in the UK overall, which is 16%;
- The number of Black, Asian and minority ethnic lawyers has increased over the past several years, with a proportion of 19% in 2023. About 77% of lawyers are from a White ethnic background. But on average, the larger the law firm, the lower the proportion of lawyers it employs from a Black, Asian, and minority ethnic background, and the difference is stark: the percentage in large law firms (15%) is less than half that of single-partner firms (39%);
- The number of lawyers identifying as lesbian, gay, bi, or who prefer another description has risen to 4.4% (up from 3% in 2015);
- About 0.5% of lawyers reported having a gender identity that differs from their sex registered at birth. This has fallen substantially from 2017, when it was 2.4%, but is roughly in line with the general population. Some caution may be warranted in interpreting gender identity data given that the percentage of respondents answering “prefer not to say” exceeds the rate of gender identity differing from sex registered at birth: 3% for all staff; and
- Religion is another category for which there is a notably high number of lawyers who prefer not to say: 8%.
The ‘prefer not to say’ rates for gender identity and religion both suggest that there may be large numbers of colleagues in law firms who are not comfortable sharing their identities in the workplace; fostering a more inclusive culture may help.
These numbers should tell us that the work is not over and, while progress has been made, more can be done to make the legal sector more diverse and inclusive.
3. Attracting and retaining effective colleagues
It is important to recognise that embracing diversity and inclusion is one of the best ways to attract and recruit effective colleagues, and by extension create an effective workforce within your firm.
Fostering a culture of intolerance – or even failing to positively showcase a culture of tolerance – will leave many top applicants looking elsewhere for work.
Attention to inclusion can also promote better teambuilding. A recent article, for example, described how events organised primarily or exclusively around drinking are a barrier to Muslim solicitors for socialising with colleagues.
Events where alcohol may be served, but which don’t revolve only around alcohol, are less likely to exclude prospective and existing colleagues. These are simple changes that can have major positive effects.
4. Law firms face penalties
Everyone deserves to feel respected and included at work. Unfortunately, some people prioritise themselves at the expense of others. Law firms allow such behaviour at their peril: a employment tribunal recently found that harassing behaviour occurred at a firm, and rejected claims that it was simply “office banter”.
Law firms should already be working to foster an inclusive culture but should also be aware that there is possible change on the horizon. The SRA has published a consultation on its financial penalties regime, stating that it has “made representations to government to grant us unlimited fining powers in relation to all breaches of our rules”.
It may be that even greater penalties await in future should firms not work to improve the legal sector’s culture.
5. Clients want it
Recall that SRA principle 2 requires that legal professionals act in a way which “public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons”. And principle 7 requires that the best interests of each client are acted upon.
Diversity and inclusion both play a role in upholding these principles, especially in the eyes of clients. Law firms serve the populace, and so their clients are as diverse as society itself; the trust and confidence of those clients is enhanced when they see a firm that values difference and values them.
This could take many forms, from a diverse workplace to public evidence that the firm takes diversity and inclusion seriously (for example through regular training and the presence of a diversity, equity, and inclusion officer).
Embracing diversity and inclusion is not just about meeting legal requirements; it’s about creating a dynamic and effective workplace.
Access Legal offers comprehensive courses to help law firms navigate this journey, and provide an equality, diversity and inclusion policy template within our policies and precedent for law firms library.
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