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Legal Brain Drain: Why Are Women Deserting The Legal Industry?

Legal brain drain
Legal brain drain

With the appointment of Susan Kiefel as the first female Chief Justice of the High Court, it’s clear women in the legal industry don’t lack for inspiration or strong role models.

Or do they?

With data from the Women Lawyer’s Association of NSW revealing the number of women in partnership at law firms has stalled at 23.3 percent, and women making up just 9.5 percent of senior counsel and Queen’s counsel nationally, it seems the industry still has much work to do.

So what is the current state of play when it comes to women in the legal industry, and why does it matter so much?

According to a study by the Law Council of Australia, 63 percent of lawyers admitted to the profession in 2014 were women (with more than 60 percent graduating from law alone).

However, only 10 percent held senior appointments.  These figures are echoed by the Workplace Gender Equality Agency (WEGA), whose 2016 figures reveal that although women make up 69.8 percent of employees in the legal services industry, they make up just 5.8 percent of the profession’s CEOs.

Figures for in-house counsel are slightly more encouraging, with nearly double the number of women holding top governance/legal roles in ASX100 companies than in partnership. According to KPMG’s report for the ASX Education and Research Program, although the number of female CEOs held steady at just 5 percent between 2011 and 2016, the percentage of female general counsel rose from 33 to 39 percent during that same period.

This is encouraging not only because it indicates the growing importance of the role of general counsel in large organisations, but also indicates the existence of an alternative path to leadership for female lawyers that’s not easily accessed in private practice.

But the question remains – Why should the legal profession care about gender imbalance?

According to a 2015 McKinsey Global Institute Report, ‘as much as $12 trillion could be added to the global GDP by 2025 by advancing women’s equality’.

Further data from Goldman Sachs suggests that ‘closing the gap between male and female employment and productivity would have the potential to boost Australia’s GDP by between 11% and more than 20%’.

Not only that, 2010 Reibey Institute data shows that ASX500 companies with female directors on their boards delivered significantly higher Return on Equity (ROE) than companies without female directors – 10.7 percent higher over three years to be precise.

And if you want to innovate, you definitely need women on board, with international research showing establishing a ‘critical mass’ of female leaders contributes to firm innovation.

It’s clear the legal industry needs to lift its game, so what exactly is being done about it?

With the growth of online legal service providers like LawPath and ‘borderless’ organisations like Lawyers on Demand and Hive Legal, working remotely is rapidly becoming a genuine option for many lawyers – male and female.

Thanks to NewLaw providers making concerted moves towards fixed fee arrangements, lawyers are not only being incentivised to work more efficiently and deliver better value for money but are able to take on less restrictive – and overwhelming – working hours. This is particularly beneficial for female lawyers juggling professional and family responsibilities.

Diversity policies are another option.

KPMG data has shown that committing to a diversity target has helped companies improve the diversity of their leadership teams, suggesting that positive outcomes can be reached through the setting of quantifiable goals. However, with female held legal counsel roles in ASX100 companies at just 39 percent and progressing slowly, the efficacy of such an approach is still up for debate.

Despite the inevitable arguments of tokenism, all Australian listed companies are also now required to meet annual gender diversity reporting requirements, while law firms are being encouraged to adopt the Law Council of Australia’s model equitable briefing policy and brief more female barristers and advocates.

Thankfully, not all organisations have to be forced to take the plunge, but have chosen to take action on their own behalf.

Notable examples include Glaxosmithkline and their commitment to ensuring a percentage of all discretionary dollars is spent with diverse businesses. Their Global Supplier Diversity Initiative includes women, LGBT, veteran and disability-owned businesses, as well as those located in historically underutilised business zones.

The Buying Legal Council also advocates an ongoing, practical commitment to diversity practices. To that end, they’ve founded a working group focused on sharing best practice on why diversity matters and how to institute it in a practical sense. Guidelines will be produced pending the results of their best practices investigation.

Reverse auctions are another, more unexpected alternative.

Although specific firms are generally invited to participate in a reverse auction, its transparent nature allows for firm names to be hidden during the auction. This encourages decision-making on the basis of cost, experience and expertise, as opposed to conscious or unconscious biases. However, for the removal of bias to be truly effective, the firms chosen to participate must come from a diverse spread to begin with.

The Diversity Council of Australia also recommends improved parental leave, addressing cultural and attitudinal barriers, the introduction of mentoring programs and the removal of gender bias in recruitment as positive measures towards sustainable change.

But if it were that easy, wouldn’t everyone be doing it?

Unfortunately, when it comes to affording female lawyers equal opportunity to move towards and succeed in leadership roles, there are no easy answers. Progress made thus far has been hard fought and won – and things don’t look like changing any time soon.

But with the legal tech and NewLaw revolution firmly underway, change is no longer a mere possibility but a foregone conclusion.

As a group of committed legal disruptors ourselves, we champion the rights of women to forge their own legal path, their own way. We hope to build and be part of an engaged, like-minded community of lawyers with diverse backgrounds who want to achieve success based on their individual abilities, not their gender. Some say it’s utopian, we say it’s the future.

Want to know more about legal procurement?

Why not join us at the Legal Procurement Forum in Sydney on 23 August 2017? Learn more about the event here.