Diversity in Law Firms in Hong Kong – Is it desirable? Is it achievable?

Recently, the President of the Law Society, Melissa Pang, announced a study and initiative to promote diversity and inclusion at the senior level of the legal profession. At the moment, male and female genders are almost equally represented at the entry level, but only around 25% of lawyers in senior positions and Partnership are female. The HK Law Society will be conducting a survey of gender, ethnicity, and disability representation in the legal profession and studying other jurisdictions to see what may be necessary to implement here.


Some would say that the Hong Kong legal industry is late to the table with such initiatives, which are well-established in other jurisdictions, and other industries, such as banking and financial services. Others argue that the HK Law Society, or employers, should not seek to promote diversity, as the employment market and the freedom of workers to choose their career path should generate the optimum outcome, within a merit-based hierarchy.


The case for diversity


Most would agree that candidates to join law firms, or be promoted into Partnership roles should not face discrimination based on gender, race, or sexuality, but what are the benefits of a diverse and inclusive workforce to the employer?


There have been several studies exploring these benefits. For example, Catalyst concluded that companies with highest representation of women on their Boards outperformed others by margins of 53% in Return on Equity, 42% Return on Sales, and 66% more successfully turning capital into profit. A McKinsey study concluded that companies produced 35% better results with ethnically diverse Boards, and 15% better results with gender-diverse boards. Most wealth managers back this up by advising investors to favour companies with diverse boards.


Law firms with a diverse workforce also enjoy the following benefits:


•    They ensure maximum market penetration of the talent pool – not excluding anyone, also becoming a more attractive employer to applicants that value diversity

•    They enjoy better decision-making and creativity – varied viewpoints, different experiences, different cultural understanding, and different education and qualifications, lead to better, more thoroughly analysed ideas •    They are able to service a diverse range of clients – and many clients also have their own diversity programs, so look for similar values in the firms they choose


So, it would be difficult to argue that a diverse and inclusive pool of lawyers within a law firm is not desirable. However, how is this achievable? And, is it desirable for it to be achieved at the expense of other strengths, such as particular education, experience, or languages?


The challenges


One of the primary objections we hear from law firm Partners when we advise them on diversity, is that it is difficult to achieve without “positive discrimination”. Although they agree in principle that diversity is a good thing, they do not feel it is possible to promote it without compromising on quality by filling quotas of genders, ethnicities etc. Their view is that they want hire the best person for the job, and do not want to be influenced by, or take into account, gender or ethnicity. However, this is countered by others who take the view that some levelling of the playing field is necessary for genders and ethnicities that have been historically overlooked. Whether or not, when faced with two equally qualified candidates, hiring managers are under pressure to select one that would make the firm more balanced is a contentious issue, and not something freely admitted, but in practice does occur on occasions. Though, if pressed, most argue that there is never a case where two candidates are truly equally qualified.


Another issue with hiring “the best person for the job” is that this may be easily influenced by the unconscious gender / ethnicity bias of the interviewer, and so firms are trying to develop recruitment strategies to overcome this bias and ensure diversity. As a search firm, we rarely see any stipulation that the role needs to be filled by a particular gender, or ethnicity (and, indeed, such stipulations are likely to fall foul of discrimination laws), but we are increasingly being asked to provide shortlists for partner searches that are gender-balanced. A number of our clients also require that candidates are met by male and female interviewers during the interview process.


Unconscious bias cannot be eliminated entirely by gender-balanced shortlists or interview panels, but at least it means those with such a bias will be considering those they may not have, given an all-male or all-female list. Should firms want to try to eliminate this bias further, they may utilise “blind” interviewing (as notably utilised by major orchestras for auditions) or use Artificial Intelligence as part of the process. However, we are yet to see these options widely used by law firms in Hong Kong, and elements may not be practical to recruitment processes.


What makes any focus on diversity and inclusion very difficult in the legal market, especially in Hong Kong, is that there almost always a shortage of lawyers with particular skill-sets (some may argue that this is a case of too many law firms, and not enough lawyers, as opposed to a shortage of legal skills required by clients), and, if Chinese language skills are also vital for a role, then the shortlist may only be one candidate, or a few of one gender and/or one ethnicity. So, in reality, most firms do not always have the benefit of a gender-balanced, or ethnicity-balanced shortlist when making lateral hires, and this is not a problem that can be fixed by including unsuitable candidates to make up the quota. It can only be solved by firms training a mix of genders and ethnicities for the next generation.


The solutions?


Perhaps a more pressing problem, as highlighted by the Law Society, is that of a lack of female partners. This is a serious issue for firms, as it means they are losing established, proven and loyal talent to in-house roles, offshore firms, or other career paths. The reasons for this are twofold – firstly, there is seen to be some gender bias by senior partners, who are often male. Most firms are cognisant of this and have developed metrics and HR processes to counter this issue, and ensure that people are being promoted on merit, although there is still anecdotal evidence of more “old-fashioned” senior partners still making the case to favour male candidates, usually for a bias related to the second reason, below.


Secondly, and potentially more difficult to solve, is a lack of female applicants for partnership, with most firms we spoke to reporting significantly less than 50% joining partnership track each year. Most to whom we spoke gave the reason of the perceived incompatibility between raising a family and partnership of a law firm.  Reconciling billable hours, with business development (which may involve late evenings or travel), and firm management responsibilities, with the demands of bringing up a young family, is undoubtably very challenging.


Many firms are trying to address this through flexible working, more associate support, and the use of technology to reduce the more onerous legal tasks. A number of firms also allow lawyers to bring their babies into the office and provide feeding rooms. Some argue that the additional support and expense on equipment and technology will mean that the practice will be less profitable, and this is often vaunted as the reason many smaller, or independent firms do not offer such flexibility. However, any loss in margin should be more than compensated for through the extra revenue and boost to the firm’s culture by retaining these key lawyers.


Overall, most international firms, and some independent firms, are taking measures already to try to improve diversity, but accurate statistics, and the Law Society highlighting the issue, is surely to be welcomed.


Written by Ben Cooper


Ben is the managing director of Ashford Benjamin and is a Barrister by training. He has been providing Executive Search and career consultancy services to the legal profession for over 10 years.


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