In-house teams appear ahead of law firms in terms of addressing gender equality. Yet general counsel can play an important role in encouraging law firms to catch up in this area, as Ruth Green reports.

It is no secret that in-house legal teams have long outstripped law firms on gender equality. The difference is most stark at the senior level. A 2018 survey by PwC indicated that just 19 per cent of equity partners in the top ten law firms in the United Kingdom are women. A 2017 study by McKinsey came to the same conclusion in the United States. By contrast, the Association of Corporate Counsel found in 2018 that women hold 28 per cent of the top legal jobs in the Fortune 500.

What none of this research tells us though is the crucial role that general counsel can play in encouraging law firms to push for more women at the top. Richard Price is Group General Counsel and Company Secretary at Anglo American. Before joining the miner in May 2017, he practised law in London, Toronto and Singapore and has witnessed first-hand how ‘glacial progress has been, particularly in the private practice sphere.'

Flexible working legislation and policies have, to some degree, improved the prospects for working mothers attempting to get on the partner track. However, Price believes the law firm model still poses challenges to those trying to reconcile child-caring responsibilities with a private practice career. ‘That needs to be addressed head on as a lot of women feel like they have to make a choice,’ he says. ‘I think it’s self-imposed, not by individuals, but by law firms. It’s the way law firms are structured, including their remuneration and promotion structures, and used to operating that imposes that. To some extent it’s the clients, but don’t blame an individual client, blame the law firm model that law firm partners came up with and are comfortable with.’

From the client’s perspective, Price says there are plenty of actions that general counsel can take to encourage law firms to push the diversity agenda. ‘One of the things we do is find opportunities to make it clear to the law firms that we actually care about the wellbeing of their people and we expect them to care too,’ he says. ‘We’re coming up with rules of engagement and coming up with a document for a legal function around how to engage with law firms to help them on inclusion and diversity.’

Price believes it is incumbent on general counsel (GCs) to take initiative. ‘It’s also things like, at the beginning of an assignment, finding out who on the team is on a flexible working arrangement so we can adjust our expectations accordingly.'

Siobhán Moriarty is General Counsel and Company Secretary at global drinks company Diageo. Like Anglo American, Diageo has signed up to the General Counsel Diversity & Inclusion statement, an open letter which advocates for in-house counsel and law firms to work together to promote greater diversity and inclusion across the legal sector. She agrees that clients can play a significant role in supporting law firms in this area. ‘Clients also have a responsibility in not putting undue demands on their law firms,’ she says. ‘We need to work with law firms to help them and [they] are desperate to move the needle on this as well. They’ve all signed up to the 30% Club [a campaign encouraging gender balance on boards and in senior management] and are trying to see what they can do. So anything that GCs can do to help I presume they will embrace with open arms.’

 

 

Although some firms have made progress on establishing sponsorship programmes for female lawyers, there’s still a strong tendency for male partners to look to more junior male lawyers to pass on clients. ‘This makes it very difficult for women in firms to inherit client relationships from the more senior partners,’ says Price.

He believes in-house counsel can help change this, however. ‘One thing I’ve asked my team to do is to be really thoughtful about who they call for an instruction. If you call the guy who took you out golfing last weekend that has consequences. If you call the junior partner who happens to be the woman who does all the work, that has consequences. So think about who gets the call. That will help.’

In the US, in-house counsel have adopted varying approaches to help boost the diversity of their external counsel, from offering financial incentives to withholding fees from firms that fail to meet diversity requirements.

Felix Ehrat is Chair of the IBA Corporate Counsel Forum and former Group General Counsel and Member of the Executive Committee at pharmaceutical company Novartis. As with other sectors, the legal profession must look at gender equality, diversity and inclusion ‘with a sense of urgency and deal with it as a top priority,’ says Ehrat. ‘Law firms, in-house legal departments and the legal sector as a whole have to implement action plans, not the least to remain attractive for the younger generations coming into the workplace. Gender equality and diversity at large should become a standard feature of the collaboration between in-house counsel and external law firms, on both sides.’

Marco Bollini, Senior Executive Vice-President, Commercial Negotiations at energy company Eni, who Co-Chairs the Corporate Counsel Forum, says many big multinationals are already engaging in development programmes in this area. ‘In-house legal departments are generally involved in those programmes and could easily share their ideas and policies with external law firms that have started to approach the matter at a later stage,’ he says.

Price believes the letter penned by almost 70 UK and European general counsel earlier this year is a positive way of supporting firms’ efforts on diversity. ‘It has already had an impact and sends a strong signal to firms that the buy-side cares about this issue,’ he says. ‘Inclusion and diversity is high on the agenda for any major corporation just about anywhere in the world and yet it doesn’t seem to be so high on the agenda in law firms. The legal industry is a service industry and we’re the clients, so if it matters to us it should matter to them, so this was a way of communicating that.’