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Why we need pay transparency in the legal profession

Secrecy about compensation isn’t in anyone’s interest, including law firm leaders.

Hand with key and dollar sign

Recent surveys and investigative reports have confirmed what women lawyers have known all along—the gender pay gap is as pervasive in private law firms as it is in government and other sectors. Even though women have been entering the legal profession in slightly greater numbers than men for decades, they still haven’t reached similar parity in compensation. Studies have also found that the more women progress in their careers, the wider the gender pay gap gets.

While some of Canada’s largest law firms have recently shown interest in sharing gender pay gap data, there is still uncertainty around what information will be disclosed and the timing of the intended disclosure.

Problems with pay secrecy

For law firms, having control over how much information about their pay practices to disclose publicly can make good business sense. At a very basic level, pay transparency could jeopardize relationships among colleagues and affect workplace morale. Pay transparency would also make it easier for competitors to poach talented lawyers by simply offering them a premium over what they are presently making. These are all genuine concerns and firms should be able to take reasonable steps to mitigate these risks.

Still, according to a PayScale survey, people who are kept in the dark about their employer’s compensation structures tend to assume that they are being underpaid or discriminated against, even if this is not the case. Such assumptions could, in turn, impact productivity and cause dissatisfied employees to leave the organization. The reason for this is that salaries are often viewed as a reflection of the value our employers place on us. On the other hand, the survey found that the more satisfied employees feel about our pay, the less likely they are to have an intent to leave.

Some may argue that the onus is on lawyers to negotiate for better salaries. However, the problem with this argument is that research has shown that women are less likely to negotiate compensation when it is not explicitly clear that salaries are negotiable. This could be because they do not want to be seen as too aggressive or risk not getting hired. The other issue is that salary data is key to any meaningful salary negotiation, and this data is lacking in the legal profession.

A Globe and Mail report has also revealed that women in law aren’t just earning less than men. There is an actual power gap, which is exacerbated by pay secrecy in the legal profession. The lack of transparency about compensation and gender representation even makes it difficult to tell how many women at the partnership level are equity partners (those who buy into the firm and are entitled to a share of its profits) as opposed to income partners. This is a crucial point because income partners may not be in a position to engender real change within the firm.

Roundtable on pay equity

Brad Regehr, President of the Canadian Bar Association, recently remarked, “What gets measured gets done. Having better data and transparency can help accelerate change.” That is exactly what the CBA Women Lawyers Forum (CBA WLF) sought to achieve in 2018 when it carried out the first-ever survey of compensation statistics of partners in Canadian law firms.

The survey was aimed at gathering data on partner compensation by gender in firms with over 50 lawyers. The majority of firms that participated in the pilot in October 2018 were reluctant to disclose actual compensation data, even if expressed as a percentage of each individual partner’s income compared to the total income of all partners. The CBA WLF ended up making changes to the survey by removing the section seeking to collect individual compensation information, but only 27 firms out of 65 participated in the revised survey. As a result, the CBA WLF’s final report was published in October 2020 with no data on the gender pay gap.

Nevertheless, a key takeaway of the report was the need to undertake more inquiry into the gender pay gap in law firms. In keeping with this recommendation, the CBA WLF will be taking another swing at pay secrecy with the upcoming Roundtable on Pay Equity, a national research initiative to gather data about the gender pay gap in the legal profession. The roundtable will be held on April 21, 2021 and will begin with a webcast program featuring a panel of experts from Canada, the UK and the US, followed by virtual focus groups sessions led by volunteer facilitators. Participants will also be given an opportunity to complete an online survey at the end of the program to collect individual-level data about participants’ experiences, perceptions and opinions. The data gathered through the roundtable will be presented in a written report, which will be the first Canadian report on pay equity issues and challenges in the legal profession.

We invite you to join us as we take another bold step forward towards achieving pay equity in the legal profession.