Gender pay gap reporting: what can we learn from the 2020 snapshot?
In 2017, the government introduced mandatory gender pay gap reporting.
Our analysis looks at:
- data from the gender pay gap reports of 42 of the largest law firms, submitted for the April 2020 pay period
- the changes in the reported gender pay gaps for 41 firms who submitted data for both April 2017 and April 2020
The report aims to assess the progress achieved so far, and what firms should consider to make sure reporting leads to action.
It includes useful benchmarking data and insights, enabling firms to reflect on their approaches whilst learning from their peers.
In the UK, over 10,000 businesses and public bodies submitted their gender pay gap data covering the 2020 snapshot date (by 5 October 2021).
Across all organisations reporting to the national gender pay gap service, the average gap in men and women’s mean hourly pay was 14% and in median pay it was 12.6%.
Our search on the national pay gap service of the 50 largest law firms revealed that 42 had submitted a gender pay gap report for April 2020. (Note: foreign law firms with offices in the UK are not required to submit gender pay gap reports.)
Among these 42 firms, the average gap in mean hourly pay was 20.3%, and for median hourly pay it was 32.4%. For most firms, this does not include partner pay.
Across the 41 largest law firms submitting data for both 2017 and 2020, the mean average gender pay gap decreased slightly (-1.38%).
The average gap in median pay increased by 0.8% over the four-year period.
The pandemic may have impacted the 2020 figures, making data less directly comparable to the previous year.
Increases and decreases
Of the 41 law firms reporting for 2017 and 2020, 28 saw a decrease in their mean gender pay gap based on hourly pay, 12 experienced an increase and one firm saw no change.
Based on the median, 20 firms experienced a decrease and 21 firms saw an increase.
Minimum and maximum pay gaps reported
The range of pay gaps reported by the firms in this report has shifted downwards slightly.
The highest reported mean and median pay gaps in 2020 are lower than those reported in 2017.
In 2017, the highest mean gender pay gap was 39.1%, and in 2020 it was 38.8%.
The highest median gap in 2017 was 68.2%, while in the 2020 snapshot, the highest median was 67.5%.
Gender bonus gaps
On average, the largest law firms reported that a similar proportion of men (58.3%) and women (59.6%) received bonuses in the pay period covering the April 2020 snapshot date.
However, on average, men received bonuses that were of higher value.
The average gap between the value of men’s and women’s bonuses in 2020 was 39.4%.
There is some evidence from the wider economy to suggest that mandatory gender pay gap reporting may be having the desired impact.
For example, one study found that organisations just over the threshold for reporting (250 or more employees) have seen a significant narrowing in their gender pay gaps since 2017, compared to those just under the threshold (less than 250 employees).
However, reporting on its own does not achieve the change, it should contribute to an in-depth strategy to improve gender equality.
Gender pay gap reporting should prompt organisations to look more closely at the nuances of pay disparity, and the causes, in their own context.
Our analysis specifically points to a need for law firms and organisations to:
- investigate beyond the headline median, mean and pay quartile figures that must be reported, and further analyse the specific causes of pay gaps internally and tailor action accordingly
- evaluate the impact of measures taken to progress gender equality since 2017, revising plans as needed
- consider the impact of the pandemic and changes to ways of working on gender equality
- take a strategic, long-term approach, setting objectives to improve gender equality and women’s representation at senior levels over the next five years (for example, using the annual pay gap reports to monitor progress against those plans)
Arguably, four years is a short timeframe to assess whether gender pay gap reporting is making a difference.
However, it's sufficient time for HR teams and businesses to:
- learn how to gather and analyse their data
- better understand the composition of their workforce
- identify what strategies or initiatives are likely to have an impact
Evidence-based actions for employers
The Government Equalities Office has been working with large employers to develop evidence-based insight into the practical steps needed to close the gender pay gap.
It makes a distinction between actions:
- that have been effective in reducing the gap
- with promising results
- with mixed results
|Include multiple women in shortlists for recruitment and promotions||Improve workplace flexibility for men and women||Relevant training opportunities in unconscious bias, leadership and diversity|
|Use skill-based assessment tasks in recruitment and structured interviews for both recruitment and promotions||Encourage the uptake of shared parental leave||Performance self-assessments|
|Encourage salary negotiation by showing salary ranges and introduce transparency to promotion, pay and reward processes||Recruit returners||Diverse selection panels|
|Appoint diversity managers and/or diversity task forces||Offer mentoring and sponsorship and networking programmes|
A range of guidance is available from the Law Society and the Government Equalities Office to help firms with reporting and action planning.
Tools for change
Women in Law Pledge
Our Women in Law Pledge is a commitment to setting high-level targets to make a difference for gender equality.
Launched in 2019 in partnership with the Bar Council of England and Wales and the Chartered Institute of Legal Executives (CILEx), the pledge was created to give organisations a structured approach to tackling several aspects of gender inequality.
Pay gap reporting guidance
Our guidance on gender pay gap reporting captures best practice that will help set the right standards for the legal sector and build a clearer way forward.
The guidance includes:
- recommendations on how to incorporate partner remuneration into the data in a realistic and useful way
- information on how to fulfil your firm’s reporting requirements