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Why law firms’ gender pay gaps may not be entirely accurate
The Workplace Gender Equality Agency has released data that exposes the pay gap at Australia’s biggest firms, but a flaw in its methodology means the reality for some firms may be very different. Here’s why.
Naomi Neilson
For some of Australia’s biggest firms, the exclusion of equity partners from the data they are required to hand over to the Workplace Gender Equality Agency (WGEA) has made their gender pay gap (GPG) appear smaller than it may really be. The opposite can also be said for those firms on the higher end of the scale.
Under recommendation 7.3b of the Workplace Gender Equality Act 2012, the WGEA acknowledged employers without partners “cannot be fairly compared to partnerships in their industry because in partnerships, a proportion of their top earners are not included”.
In conversation with Lawyers Weekly, WGEA’s director Mary Wooldridge said that while there may not be a timeline in place, the agency is working with Law Firms Australia, representatives of firms, and the government to resolve this flaw in the data.
“When I asked the UK – [which has] been publishing gender pay gaps for about five years more than we have – they said they found the problem too hard and they just weren’t trying to include them.
“We are trying to work out a way through to meaningfully include them, understanding that they are a different type of person in the workplace,” Wooldridge said.
For example, at Macpherson Kelley, the average base salary GPG is 27.8 per cent, and its remuneration GPG sits at 32.8 per cent. These figures are slightly higher in median, at 36.3 and 37.2 per cent.
A spokesperson for the firm – whose figures were around the 40 per cent mark in the previous reporting year – said their GPG drops to under 20 per cent when they remove the principal lawyers from its firm data set. This is “broadly in line with the industry average”.
Coleman Greig, which reported one of the highest GPG in the recent dataset, said it was also impacted by the flaw.
“Unlike traditional law firms, which are not required to include partners in their WGEA reporting, Coleman Greig operates as a corporatised law firm,” a spokesperson said.
“This means our gender pay gap data includes salaries for all employees, including our most senior and highly paid personnel. In contrast, partnership firms exclude partner earnings, which comparatively can make their gender pay gaps appear lower.”
Dr Sarah Duffy, a senior lecturer with the School of Business at Western Sydney University, said it was “not good enough” the WGEA is constrained by the methodology.
“I think it’s important, particularly in this moment with everything that’s happening, in the way that diversity, equity and inclusion are coming under attack, we really need to have faith in our institutions.
“I think WGEA [is] undermining public trust in the data that [it produces] by not being transparent about this and by setting up a system in a way that it benefits the richest and most powerful people in Australia,” Duffy said.
Wooldridge said firms have been encouraged to use their employer statement – which is available to read alongside their data on the WGEA website – as a way to “talk to those issues”.
“I am very conscious that comparing two law firms might not be a like-for-like comparison because one may have equity partners and one may not, or if they’re a company structure or listed or any of those, which some firms are as well,” Wooldridge said.
“I would certainly encourage any partnerships to use their employer statement as the ability to talk to those differences and those comparisons and what that means in an individual context.”
The GPG for Australia’s major law firms can be found here.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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