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Equal with whom?

14 December 15

The pay gap affecting more senior women, as compared with male colleagues and some other women, plus the plight of legal aid lawyers, are among the notable points of this year's Journal employment survey

by Peter Nicholson

That gender pay gap – where is it hitting and to what extent? That was one of the questions this year’s Journal employment survey aimed to throw some light on.

It undoubtedly exists at more senior levels in the profession, though why it should be quite so marked at the most senior is less clear.

The first two tables show the pattern. Breaking down by length of experience, at 4-10 years post qualified, male earnings on average begin to pull away, though there is also a large pool of people on comparable rates. The divergence increases at 10-20 years, but is much more marked among those more than 20 years qualified. Women at this level are most commonly a senior legal adviser (in-house), senior associate or director; with men it is equity partner, senior legal adviser or head of legal. Strikingly, more than a quarter of women, but less than 7% of men, were earning less than £40,000 a year; 63% of women, but 31% of men, were on less than 60,000; conversely, 29% of men, but only 9% of women, earned more than £100,000.

It is notable that women of 20+ PQE also appear to be paid less on average even than women in the PQE band below.

For further comparisons we also tried sample analyses of solicitors with particular job descriptions. With these more precise comparisons, the numbers from both genders are generally fairly small, but there may be a pattern nevertheless.

For example, we looked at the earnings of equity partners. With the qualifications that there were few female respondents (consistent with the profession overall, there were three and a half times as many men), and more women were outside the main cities, it is striking that 70% of the men were on six-figure earnings, and 55% on more than £150,000, whereas the top bracket for the women, comprising three eighths of them, was £100,000-149,999. And 78% of the women, but only 13% of the men, claimed to have no dependants. “No dependants” may mean the children have now left home; but do the figures also mean that men are reaching this level at younger age? Certainly on average the women appear to have at least the same PQE.

Doing the same exercise with senior associates, where the number of respondents was more equal, and there were more similarities in type and location of employer, both genders report quite a wide range of earnings, peaking at around the £60,000-69,000 bracket, but with men recording both the lowest and the highest earnings of the spread. This at least suggests more equal treatment.

Looking in-house, to those describing themselves as senior legal adviser, even in the public sector with its emphasis on equality we find a discrepancy, with more than half the women, but one third of the men, earning less than £50,000, and no women on comparable earnings to the top 20% of the men.

Table 1. Salary spread, in percentages, by years’ PQE: female
(full time or self employed, all sectors)
YEARS PQE < £30,000 £30,000-39,999 £40,000-49,999 £50,000-50,999 £60,000-69,999 £70,000-79,999 £80,000-89,999 £90,000-99,999 £100,000-£149,999
0-2 18.8 68.8 10.4 0 2.1 0 0 0 0
2-4 7.6 54.6 18.6 9.1 3 1.5 4.6 0 1.5
4-10 2.2 35.2 29.7 12.1 11 4.4 3.3 1.1 1.1
10-20 4.6 15.2 15.2 10.6 13.6 16.7 10.6 6.1 7.6
20> 2.9 23.5 19.1 23.5 7.4 5.9 4.4 4.4 8.8

 

Table 2. Salary spread, in percentages, by years’ PQE: male
(full time or self employed, all sectors)
YEARS PQE < £30,000 £30,000-39,999 £40,000-49,999 £50,000-50,999 £60,000-69,999 £70,000-79,999 £80,000-89,999 £90,000-99,999 >£100,000
0-2 13.9 77.8 2.8 0 0 5.6 0 0 0
2-4 13.9 30.1 36.1 11.1 2.8 0 0 2.8 2.8
4-10 3 28.8 19.7 24.2 7.6 4.6 1.5 4.6 6
10-20 1.8 13 16.7 16.7 11.1 9.3 5.6 5.6 20.4*
20> 1.1 5.5 7.7 15.4 17.6 9.9 9.9 4.4 28.6**

* Breakdown is £100,000-£149,999: 11.1%; £150-£199,999: 1.8%; £200,000-249,999: 1.8%; £250,000+: 5.6%
** Breakdown is £100,000-£149,999: 8.8%; £150-£199,999: 8.8%; £200,000-249,999: 3.3%; £250,000+: 7.7% 

Significant figures

All these figures are for those working full time. We do not know how many women have taken a career break or for how long, or how they returned to practice if they took a break. Nor can we compare earnings within the same organisation. But we can report that twice as many women as men at 20+ PQE (32% against 16%) described themselves as unsatisfied with their pay – and when part- time employees are included, a majority of women (52%), compared with just over a quarter of men (27.4%) expressed themselves as unsatisfied or very unsatisfied.

At 11-20 years qualified the pay satisfaction ratings are much more equal. Given the level of women’s earnings in this band as compared with their seniors, could it be that as the number of women at the more experienced levels in the profession approaches parity with men, the pay differentials are narrowing too? Is it those who found themselves spearheading the advance of women who still need the most consideration if we are to approach gender equality? We cannot give definitive answers on the basis of our data, but the question is at least worth asking.

Spare a thought, however, for legal aid practitioners, of either gender and any length of experience. Almost two thirds of respondents in this category (65.7%) earn less than £40,000 a year, and only a handful more than £60,000 (there are some who do other types of work as well). Of the eight equity partners who responded (all sole principals or in 2-5 principal firms), two said they earned less than £20,000, and two others less than £40,000. Six had seen reduced earnings over the past year and one was unchanged. Six of the eight have no other benefits. Sad, but not surprising.

Table 3. Which benefits do you currently receive?
(top responses, all sectors; last year’s position in brackets)
1 More than 25 days' holiday per year (excluding public holidays) (1) 40.6%
2 Private health care (2) 33.1%
3 Life or health insurance (3) 30.1%
4 Smartphone/tablet (4) 28.8%
5 Cash bonus (individual performance) (9) 26.8%
6 Training support (work related) (5) 25.5%
6 Ability to buy/sell annual leave (7) 25.5%
8 Cash bonus (firm performance) (10) 23.3%
9 Childcare/crèche or vouchers (8) 21.6%
10 Pension (other than as follows) (13) 20.4%
11 Pension (stakeholder) (12) 20.1%
12 Pension (money purchase) (11) 18.7%
13 Pension (final salary) (6) 18.0%
  No benefits 9.9%

 

Mixed messages

More generally, how is sentiment about the way the market is going? Table 5 shows most sectors remaining positive, though there is a smaller margin of positive over negative views of the previous 12 months than was the case in 2014. Exceptions are the relatively small sample from sole principal practices, though here the returns are less negative than last year; listed companies, which, as they did last year, show a negative balance in contrast with private companies; and most notably the public sector, which will see no escape from austerity for the foreseeable future.

The picture is more mixed with regard to the outlook for the next 12 months: listed companies see more optimism (mind you, they were optimistic this time last year also); those in the largest firms remain strongly positive but less so than before; sentiment is turning negative in the 5-10 partner practice; however smaller firms could be showing a bit more confidence.

Growth does appear to be in the air. Whereas last year was the first since the recession in which slightly more respondents reported headcount growth than redundancies in their organisation, in 2015 the gap has massively widened to 24% (see table 4). A pay freeze still significantly affects those in the public sector (53% in national organisations, and 67% in local, report this as in effect). Elsewhere, with or without a formal policy, the likelihood of a standstill increases as the size of firm decreases: just over 20% of respondents from the biggest firms (21 or more principals), along with the in-house commercial sector, reported their earnings as the same as or less than the previous year, but the proportion steadily rises going down the scale, reaching 60% with sole principal firms – where 43% also claimed their pay is never reviewed.

Looking at benefits, more appear to be enjoying cash bonuses (the biggest climber in our table 3). Pension auto-enrolment has yet to have a significant effect, as more than 20% reported no form of pension provision when asked about benefits. But note that staging dates for small businesses have now begun!

As for satisfaction with pay, the more recently qualified show less discontent: 23% at 0-2 years and 32% at 2-4 years, compared to around 40% for those with longer service, where as we have seen, gender inequality remains a significant issue – not that all men are content with their pay. On a breakdown by type of employer, discontent runs at between 42 and 47% in all sizes of practice up to 10 partners, at 37% in the 11-20 partner band and at 32% in bigger firms. Listed companies scored 30% and private companies only 20% dissatisfaction. Within national public bodies it was 38%, but for local bodies 52.5%. Satisfaction with benefits was a few percentage points better across all sectors, except in small firms: 54% of those working for sole principal firms, and 40% of those in 2-5 principal firms, say they receive no benefits.

The panel gives an outline of the level of flexible working, the extra hours many work and encroachment on personal life. So how many are actively looking for an alternative? Not so many, it would appear: by PQE range, only the 4-10 category shows more than 10% actively looking (11.6%), followed by the 11-20 group at 9.6%. By sector, despite the poorer rewards in smaller firms, it is those in the 11-20 principal practices (15.7%) who seem most likely to move, followed by listed companies (13.2%) and 2-5 principal firms (10.1%). In the public sector, 8.8% of those in local organisations, but only 2.9% in national bodies, are actively searching. Commercial in-house lawyers are also most likely to pursue a new job “if the right one came up” (49%), compared with 44% in local public bodies, 43% in 2-5 principal firms (the highest score in private practice), down to 32% in small firms and 26% in 11-20 principals, the latter balancing out to some extent the higher score for active job seekers.

It is no secret that across the whole profession, some practices are doing very well at present while others are having more of a struggle, or indeed going under. It should not come as a surprise, then, that individuals also report a broad range of figures and views. The positive news is that fewer are out of work and, perhaps, that equality in pay and conditions is working its way to higher levels. But much remains to be done on that score.

Table 4. Has your organisation experienced any of the following over the past 12 months? (all sectors)
  % % change on 2014
Headcount growth 42.2 +10.0
Redundancies 18.1 –11.7
Pay freeze 17.4 –4.9
Bonuses introduced or increased 16.3 +4.0
Merger or takeover 14.4 +0.8
Bonuses reduced, suspended or scrapped 8.7 –1.0
Benefits introduced or increased 7.2 +2.7
Compulsory overtime 2.0 +0.6
Reduced working hours/days – voluntary 1.4 –0.8
Reduced working hours/days – compulsory 0.3 –0.6
Don't know 17.5 +0.3

 

Table 5. Better or worse? The outlook for your organisation (balance of responses, better v worse, last year’s return in brackets)
Type of employer Over the past 12 months Predicted for next 12 months
Sole principal –3.3% (–29.6%) 0 (–10.8%)
2-5 principals +12.9% (+20.3%) +20.1% (+20.9%)
6-10 principals +22.6% (+26.7%) –6.5% (+20.0%)
11-20 principals +13.4% (+22.7%) +21.2% (+38.7%)
21+ principals +45.7% (+52.8%) +31.5% (+42.0%)
Private companies +4.7% (+24.7%) +9.0% (+26.9%)
Listed companies –1.8% (–6.0%) +21.2% (+16.0%)
Public sector (national body) –42.2% (–40.2%) –50.0% (–50.5%)
Public sector (local body) –75.0% (–69.3%) –72.2% (–64.1%)

Around half of respondents in most categories answered “about the same”, except for public sector local bodies, where the figure was below one quarter

Who took the survey?

Thank you to the 931 people who provided data for this year’s Journal employment survey – an almost identical number to last year, but with a higher proportion of female solicitors (61.3% compared with 58.8%); three respondents were “trans”. The lower proportion of in-house lawyers (33.4% compared with 41.8%) gives better balance.

In all, 94.4% were practising, 4% non-practising, and a low 1.6% not currently in employment (retired, career break for family or unemployed). Just over 60% are able to work flexible hours (by contract or in practice); 28.8% are provided with a smartphone or tablet and 52.5% can use their own device for work (we hope with suitable protocols in place). Few are contracted to work more than 45 hours a week, but 43% do so, including 2.2% who claim more than 65 hours; 74% say work encroaches to some extent on their personal life. A quarter do not expect to use all this year’s holiday entitlement.

A total of 84% (last year 88%) expressed themselves satisfied or very satisfied with their employer’s training and CPD; 82% have some form of CSR opportunity.

Around half of respondents in most categories answered “about the same”, except for public sector local bodies, where the figure was below one quarter

For the most recent comparable reports, see Journal, December 2014, 16, and Journal, December 2013, 19

 

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