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What can a professional firm and its clients do to promote diversity within the partnership?

The following paper examines the role of professional firms and their clients in promoting diversity. It is based upon a presentation given by Richard Turnor, a partner of Maurice Turnor Gardner LLP, at a seminar on Diversity in The Professions held on 4 November 2010.

1. Importance of diversity – legal and regulatory issues

It is important to comply with the law and regulations on discrimination and diversity. A detailed analysis is beyond the scope of this paper, but these include:

  • The Equality Act 2010 (the Act), which came into force on 1 October 2010, harmonises and simplifies the rules against discrimination. It tells you what you must not do in relation to partners and staff alike.
  • However, Section 158 of the Act also tells us what we can now do. We can now take proportionate measures to enable or encourage the participation of disadvantaged or under-represented individuals. For example we can use targeted job advertisements, additional training, worship facilities, crèche facilities and flexible working regimes.
  • Section 159 of the Act goes even further and permits the more favourable treatment of people from a disadvantaged or under-represented group when it comes to recruitment or promotion, provided they are equally qualified. This section is highly controversial and has not yet been brought into force, but it offers an insight into the future attitudes and approaches we are likely to see.
  • For solicitors, Rule 6 of the current SRA Code of Conduct requires regulated firms to have a policy for promoting equality and diversity. Staff and partners must be made aware of, and act in compliance with it. The firm's policy must also be made available to clients and the SRA upon request. 
  • The new outcomes focused Code of Conduct, which is to come into force in 2011, will go further. The current draft includes, as a core principle, an obligation to run the business or carry out one’s role in a way that encourages equality of opportunity and respect for diversity. This is coupled with obligatory outcomes including an obligation to monitor actively and respond to issues identified by the firm’s policy and to update protocols as appropriate.

All professional services firms need to review our discrimination and diversity policies and ensure that they are fully compliant.

2. Importance of diversity – legal and regulatory issues

Fortunately, the legal and regulatory framework does not create conflicts with our commercial interests or those of our clients. In fact, the reverse is true.

Some firms still, consciously or unconsciously, select partners who are clones of themselves - perhaps middle aged men with a particular socio-economic or religious background. Partners in mono-typical firms feel comfortable working with so-called “like- minded” people who get the in-jokes and do the same things at weekends. But this kind of exclusivity has the effect of putting off anyone who does not feel part of the club. It drains both the pool of recruits, and the pool of potential clients.

The very fact that everyone in the firm is “like-minded” means that the firm does not benefit from a broad range of different perceptions, experiences and ideas, and internal discussion suffers - lots of research has indicated that such firms are less likely to come up with new business ideas and models, or to come up with innovative ideas for clients.

So there is a strong business case for diversity.

3. Barriers to diversity

Despite the legal and regulatory backdrop and the strong business cases, the editor’s introduction to Lawyer Magazine’s Diversity Report 2010 paints a rather depressing picture. For example:

  • black and minority ethnic lawyers are often paid less than their peer group;
  • gay and lesbian lawyers often suffer discrimination;
  • class and education remain fundamental determinants of entry into the profession; and
  • women are massively under-represented at senior levels.

Why are we still getting it wrong? The main issues appear to be:

  • difficulties in finding recruits from diverse backgrounds- these do not look likely to get any less with the changes to higher education funding;
  • unimaginative recruitment policies - we all tend to look for clones of ourselves in the same places;
  • unimaginative working practices - we make it quite impossible for anyone who has to care for the young, sick or elderly to progress as far as they might;
  • regulatory constraints - until section 159 comes into effect, anything we do to promote an under-represented group is likely to discriminate against another well represented group;
  • immigration constraints - the government’s immigration caps have made it more difficult for professional firms to bring in professionals from outside the EU, simply because firms have found that the number of certificates of sponsorship allocated to them has been greatly reduced; and
  • client demands - in a highly competitive global market, clients demand that their advisers must adhere to the 24 hour culture that excludes so many talented people.

So what can professional services firms do about it?

4. Governance and diversity

Part of the problem is governance. In many firms nobody is charged with ensuring that diversity is on the agenda. So unsurprisingly nothing changes.

I am on the Board of an NHS hospital, and we have a diversity and equality committee which evaluates the organisation, highlights areas where practice could be improved, monitors follow up action, keeps the diversity policy under review as a living, dynamic document and generally keeps diversity at the forefront of our minds.

Professional firms could adopt the same approach.

Why not include diversity as an issue to be discussed at every appraisal meeting? If everyone in the organisation, every year, thinks about the part they can play in improving equality of opportunity and diversity, things are bound to start to improve.

5. Building a diverse pool of partnership candidates

5.1 Graduates and lateral hires

Absolutely key to diversity is that there should be a diverse pool of candidates to choose from.
There is a limit to what we can do as employers to increase the diversity of university graduates in general, but we can certainly support policy initiatives. Firms can engage with schools and other organisations to try to spot young talent and raise the aspirations of those who might not otherwise think about university, let alone a law degree.

Where we really can make a difference is in recruitment practices.

Up to now, firms have all tended to look for graduates with similar grades from similar universities who therefore tend to have similar ages and backgrounds. The Lawyer Diversity Report 2010 describes how a 50 year old with a successful career behind her found it almost impossible to get a training contract because the on-line forms only worked if you matched certain criteria. But there are plenty of able people out there who do not match this model. Foundations such as the Stuart Menzies Foundation are designed precisely to seek those people out.

Of course, until section 159 of the Act comes in, it is not possible to favour people on the grounds of their protected characteristics, but like the government’s own disability symbol scheme, we can commit to interview any candidate from an under-represented group who meets the minimum criteria for a vacancy and to consider them on their merits.

And one can look for and nurture talent with an unusual background. For example, student mentoring schemes may be an excellent opportunity to build links with less privileged students and their schools, and might fit in well with corporate social responsibility programmes at the same time. Firms could also broaden their selection criteria generally to permit a wider mix of recruits.

Imagine what might be achieved if every firm set themselves a target of finding 10 or 20 % of their interviewees from non traditional sources, working with the schools, universities and law colleges?

5.2 Training

Having recruited a diverse group of trainees and lateral hires, the firm can then set about nurturing them to qualification and beyond so that the most able can rise to the top whatever their background.

Training programmes should take into account the diversity of the trainees. For example the firm might routinely offer language and cultural awareness training for those from different ethnic backgrounds, just as is done as a matter of course when people are posted overseas. And of course, care must be taken to set the criteria for post-qualification appointments in an imaginative way which ensures a diverse pool of the most able newly qualified candidates.
Business groups will need training in order to raise their awareness of the need to keep open minds and to avoid simply appointing clones of themselves.

6. Retention

The push must continue way beyond qualification.

All professionals need continual coaching and mentoring and this should be done in a way which enables the best to prosper whatever their background. A conscious effort should be made to ensure that all project teams are diverse, so that the firm and its clients benefit from the mix of ideas and all able professionals have equal opportunity over time to participate and grow. The firm should make it clear how it values diverse points of view and encourages constructive debate. This will encourage an inclusive culture which is attractive to recruits and clients alike.
Advantage might be taken of section 158 of the Act to put in place proportionate measures to enable or encourage the participation of disadvantaged or under-represented individuals. This might include additional training, worship facilities, crèche facilities and flexible working regimes.
Flexible working regimes are also crucial if firms are to be able to retain able professionals through a period in which they need to work from home, or to stick to particular hours, perhaps because of young children or other commitments. Modern technology means that motivated professionals can, if anything, get more done at home than they could in the office because there tend to be less distractions. For example nearly half of MTG’s partners have formal arrangements to work from home.

Some might comment that this is easily achievable for an advisory practice, but nowadays transactions are far less reliant on face to face meetings and business travel. It is not unusual for a deal to be handled 100% on the telephone and by e mail. A weekly project meeting at an agreed time may be quite sufficient to keep the transaction on track.

It goes without saying that the firm should make every effort to provide the facilities necessary to ensure that those with disabilities are not disadvantaged.

7. The role of the client

The other key stakeholders in a firm are its clients. It is in the client’s interests that its advisers should benefit from diversity. What can the client do to encourage this?

Many major corporate and financial clients take into account a firm’s approach to diversity when appointing panel firms or considering pitches. This is helpful. But it is not enough to require that a firm pays lip service to diversity.

Why not insist that project teams are reasonably diverse, at least in terms of characteristics that are easy to identify, such as age, experience, gender and ethnicity? Why not insist that counterparties to deals and their advisers accept that a project is to be subject to a reasonable timetable, and managed in a way that makes it possible to work remotely? Where meetings are essential, why not insist that they end by a specific time, and that subsequent document turnaround times allow everyone to be home by a reasonable hour?

By managing projects in this way, major clients have it in their power to change the whole culture of business for the better.

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