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Scrutiny over partner pay likely to reveal pay gulf

Posted by: Laurence Simons 09/05/16
New regulations may be set to reveal disparities in pay between men and women in the UK’s leading law firms. Under new guidelines proposed by the government, organisations with over 250 employees will be required by law to include partner-level salaries in the pay equality information they provide to regulators. It had been thought that ‘members’ in limited liability partnerships would be exempt from the ruling, but a new clarification has revealed that this was merely an oversight. 

The clarification “significantly widens the scope of the draft regulations and means that, for example, LLP members and some self-employed contractors are likely to be treated as ‘relevant employees’ for reporting purposes” according to legal information company, Practical Law. Which means firms who do not employ their staff through a separate services company will be required to add together all ‘relevant employees’ to determine if they exceed the 250 people threshold. 

Karen Baxter, employment partner at Lewis Silkin highlighted the historic inequality at the top of the profession saying “This is likely to have a significant negative impact on the gender pay gap figures that these firms will have to supply.” Such measures are likely to expose the extent of the pay gulf in the top positions, of which only 20% are held by women.

This news comes at a time when a number of firms are re-evaluating their bonus models to help achieve equality, with Stephens Scown becoming the first UK 200 firm to adopt a shared ownership scheme. The scheme will see all profits above a certain threshold put into a pool, with the firm retaining half and the remainder being shared equally between all staff, irrespective of seniority. 

Although it is likely that scrutiny over partner gap will expose a lot more significant disparities in remuneration than many expect, increased transparency is certainly a step in the right direction. 
Tagged In: Law firms, Women in Law
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