Study shows law firm senior leadership still largely white and male

Despite much talk over the last decade around boosting diversity and inclusion in law firms, women and racialized lawyers continue to be under-represented in the Canadian legal profession with Caucasian men continuing to far outnumber those two groups in senior leadership roles, according to a study from the Canadian Centre for Diversity and Inclusion.

Level Chan says a lack of women and racialized lawyers at the top of law firms is a matter of retention and advancement. He says there continues to be “over-representation” at the associate and entry-level areas of the firms but they don’t tend to stay.

In fact, the study shows Caucasian men who responded to the survey have the greatest odds of being an equity partner, and they are seven times more likely than racialized women to be an equity partner.

The study, “Diversity by the Numbers: The Legal Profession,” conducted by the CCDI in partnership with the Canadian Bar Association, shows the representation of minority groups in the legal profession has not changed substantially over the last three years that the CCDI has been collecting data. In 2014 and 2015, 73.99 per cent and 76.88 per cent of senior leader respondents were men. In 2016, 75.34 per cent of senior leader respondents to the survey were men and 90.78 per cent of senior leaders were Caucasian.

In 2014 and 2015, 89.28 per cent and 88.91 per cent of senior leader respondents were Caucasian respondents, respectively. Another statistic of note is that 81.9 per cent of senior leaders are equity partners.

“Results from 2014, 2015 and 2016 do not show a shift towards a more diverse and inclusive workforce, particularly in partner and leadership roles,” the report states.

The study, sponsored by Borden Ladner Gervais LLP, Cassels Brock & Blackwell LLP, Dentons Canada LLP, McCarthy Tétrault LLP and Miller Thomson LLP, shows women and racialized respondents are under-represented in equity partner and senior leader roles and over-represented as associates and articling or summer students.

Authors of the report say factors contributing to the perpetuation of these numbers include “inflexible working conditions, rigid firm culture, high client expectations and overall economics of the profession.”

While some might point to a tough economy since 2008, Deanna Matzanke, director, measurement and analytics at the CCDI, says the economy is a “significant red herring” and what the report shows is “a compelling validation” that the current law firm model makes it difficult for women and minorities to rise to equity partner positions.

“ . . . the process of billable hours, the emphasis placed on client relationships, and the hierarchal ‘Old Boys Club’ network in law firms do not support or foster a diverse and inclusive environment.”

The report goes on to say that women find themselves in a difficult position when faced with trying to balance family needs with law firm demands. Also, “ . . . lawyers from minority groups do not have the same social and cultural capital to network and find mentors who relate to them, because the pool is very small.”

That means many leave the law firm culture for more flexible and accommodating environments elsewhere, such as in-house roles or solo practice.

Matzanke, a lawyer herself, says the results of the study are disappointing and show that diversity and inclusion are not being successfully implemented in the legal profession, despite the fact the pool of potential lawyers in law school has increased in diversity and at the associate level at law firms shows fairly high diversity.

The majority of racialized respondents in the legal profession are Asian, while all other groups show very small representation.

A total of 11 firms from nine provinces and one territory participated in the 2016 survey. Firms were invited to participate directly by CCDI via the Law Firm Diversity and Inclusion Network, and the Canadian Bar Association sent a letter to all members.

“There’s nothing surprising here really,” says Level Chan, a partner with Stewart McKelvey LLP in Halifax and the CBA’s representative on the CCDI’s advisory committee.

“As to why we’re not moving the needle much, I think it’s a matter of retention and advancement, and as you see particularly with women, there continues to be over-representation at the associate and entry level areas of the firms, but we’re not keeping them. I think that in turn is translating to having fewer people available for senior roles and as equity partners. That is the ongoing issue we’ve had in the legal profession.”

Chan argues the economy has played a factor as he says “many law firms” have gone through rounds of layoffs and that would impact the ability of people to get into partnership roles as well.

In-house lawyers and their powerful role in the market is also a big factor. With law firms under regular scrutiny by corporate clients on use of the billable hour, the ability to maintain revenue streams has been a challenge.

“My anecdotal observation is that, of course, when there is less work there is less billable hours and less billings that would translate into the numbers admitted to partnership,” he says. “One of the common responses from clients to reduce their legal costs is to hire in-house lawyers and find internal resources to do due diligence or review contracts, so that is driving that change on the in-house side, too.”

There are also more attractive roles for in-house lawyers seeking something different from the usual private practice path.

Chan says from what he has seen, those lawyers leaving big law firms are women and other minorities being drawn to in-house positions offering certain elements not offered in traditional law firm compensation schemes, such as pensions, benefits or other financial incentives.

“So long as you’re not getting racialized lawyers as partners, you’re similarly not really going to get racialized people in leadership roles and that also applies with women,” says Chan. “Certainly, I think firms are making a concerted effort to try and increase representation in leadership and I think there have been attempts to get more women in senior roles. While women are still underrepresented, there are still a larger pool of women to draw on for partners than there are racialized lawyers.”

Kate Broer, partner with Dentons Canada and a member of the CCDI’s advisory committee, agrees with Chan that lawyers have a “broader range of options” other than the traditional path of private practice and many are moving into in-house roles or to other opportunities.

The war on the billable hour may also be influencing who remains at the top of many law firms. Firms are generally taking on fewer students, and Broer says gone are the days of “guaranteed hire-backs.”

But times are changing and if firms are to retain certain talent and appeal to a new generation of clients that want to see greater diversity of talent and for their own staff who want better life balance, firms will have to better address the issue. Broer says these days it’s not only women who want to take time away from their careers to raise children but men, too.

She also points out that women are gaining voice at the top of some large firms. This year, Dentons Canada elected five women to its board of 10 directors in Canada. That is an increase from two out of 10 in the previous year and in 2009 none of the members of the board were women.

Although the CCDI tried to include Canada’s 22 law schools in the survey to provide a comparison of students enrolled against the broader profession, the schools did not participate this year, although it was originally scheduled to be conducted this year.

“My impression is there is a huge importance in getting that law school data,” says Chan. “I know in speaking to deans at law schools they do see it as an issue and are working on it, but no law school has really been particularly open and transparent with respect to that other than programs they would already have in place.”

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