Gender equality required also in the legal industry?

The legal market like most other industries still misses sufficient representation of women at top management levels, be it as partners in law firms or as general counsel in legal departments. The legal industry often claims this is due to non-available talent. Let’s be frank, it is not (anymore) a pipeline issue but a structural problem which prevents diversity on all levels in the legal market. It is about the lack of willingness to adapt to changes to become and stay attractive as an employer, and to win and retain new and promising talents.

Addressing variety we need to distinguish three terms: diversity, equity and inclusion. Diversity refers to the composition and distribution of people in a group or social unit according to certain criteria such as gender. Equity explains that, from a moral point of view, to achieve diversity is simply “the right thing to do” to provide equal opportunities to qualified individuals regardless of their background. In particular this point is interesting: the legal industry may litigate diversity cases of their customers in court but seems to miss to apply the same rules to itself. And finally, inclusion uncovers the potentials and added values needed to realize the benefits and profits expected by establishing diversity. Inclusion ensures that diversity is really “lived” in a company. If diversity is about recruiting the right people, inclusion makes sure the expected values are realized.

Of course, diversity entails more effort, causes uncomfortable tensions, communication mistakes and coordination problems, and requires a lot of time to manage associated productivity losses. However, this should not obscure the many advantages arising from diversity. Some of the most mentioned benefits are the following, which in particular to lawyers should be interesting: higher problem-solving competence, better decision-making, and improved solutions due to a broader perspective and a better customer understanding; higher performance and productivity, higher-quality work, and a more creative and increased innovation competence since such teams better avoid group thinking; broader recruiting and talent pool, allowing a better exploitation of talent and the use of the existing potential of individuals. And finally, research shows a link between diversity and financial performance, i.e. achieving a diversity dividend and more profit. When it comes to providing a “business case” to prove economic benefits, the criticism is often that such research may show a correlation only and not causality. However, this misses the point, that simply increasing the numbers of underrepresented people in the workforce does not the trick. One should not only look at diversity, but rather also to inclusion. Only this can realize the full value of diversity.

Customers are facing complex challenges and are forced to take a diverse approach to solving these problems, and consequently demand diverse talent. It might be interesting for legal service providers to learn that a diverse group of intelligent problem solvers outperforms a team comprised of the best-performing agents. This result has direct implications for lawyers and law firms that are considered problem-solving organizations. Therefore, law firms and legal departments must be prepared to operate in an increasingly diverse society with customers demanding such new standards. And today, with an increasing focus on ESG, this may become even more relevant.

Let’s have a final look at the legal market. The good news is that today it is attractive for women to start working as a lawyer and that law firms and legal departments are doing a good job. First, women do not need to be encouraged anymore, either to study in general or to study law. If we look at the distribution of students at universities by gender, we see that for several years now, more women than men have been studying law. And second, it is increasingly attractive for women to start working as a lawyer after law school, and in law firms they represent the majority of the trainees and associates. The women are ambitious and want to advance. As a result, at the entry level to business after law school there is no need to complain about gender diversity, the pipeline is filled. The bad news, however, comes later with development, promotion, and retention. Law firms still have a lot of work to do here.

Of course, one may feel more comfortable and at ease working with people who share one’s own background, thoughts, and culture. However, the legal industry cannot further afford to deliberately waste these ready and precious resources. To the contrary, opening the working environment on all levels to a diverse team may positively position an employer in the recruitment market to become the most attractive employer and win the best talent in the market. In the long run this can secure the required human resources in a sustainable way. To close the loop, it is all about leadership and management, also in the legal industry.

[An comprehensive article on this topic will be published by the author shortly in Fall 2021.]