Looking back at how firms used to operate (photo taken at a City firm in 2019).
Freshfields has impressed onlookers after recording a median gender pay gap of 0% for non-partners.
Pay gap reports show the difference in the average pay between two groups (eg men and women) regardless of their job role or seniority. It is therefore different to equal pay reporting which deals with pay differences between men and women who carry out equal work.
The Magic Circle firm confirmed in its recently published report that it achieved a median* pay gap of 0% for UK employees in 2022, dropping from 1% in 2021.
Freshfields' zero stands in stark contrast to other Magic Circle firms, which recorded median gender pay gaps of 41.7% at Slaughter and May, 39.2% at Linklaters, 31.8% at Clifford Chance, and 29.5% at Allen & Overy.
One source remarked that "Freshfields has apparently got rid of its gender pay gap completely", and wondered how the firm had achieved such a landmark ahead of the the rest of the MC. RollOnFriday asked the firm for its magic formula, but it declined to elaborate.
Freshfields' mean gender pay gap for employees increased to 7.6% in 2022 compared to 0.7% in 2021. The firm said the mean increase was the result of a number of factors, including more women in junior support roles and a lower number of women in the top quartile.
When partners were thrown into the mix, Freshfields’ mean overall gender pay gap for 2022 increased to 53.2% (up from 52.1% in 2021) and the median overall gender pay gap increased to 14.8% (up from 12.5% in 2021).
Freshfields also reported on socio-economic background for the first time, analysing the pay gap between three groups of parental background: ‘professional’ (such as teacher, solicitor, accountant), ‘intermediate’ (such as secretary, clerical worker, nursery nurse), and ‘lower socio-economic’ (such as plumber, gardener, postal worker).
The pay gap favoured staff whose parents had professional backgrounds compared to intermediate and lower socio-economic backgrounds, with a median pay gap of 45% in favour of professional backgrounds compared to lower socio-economic, and a mean of 31.3%.
The overall ethnicity pay gap (including partners) increased compared to 2021, with a mean pay gap of 55.9% (up from 50.5% in 2021), and a median pay gap of 10.8% (up from 7.3% in 2021). The firm said it had been "driven by the proportionately relatively small number of partners self-identifying as being from an ethnic minority and higher representation in more junior roles". The firm reported on all ethnic groups collectively, but said it recognised "the limitations of reporting on multiple ethnic groups together".
London Managing Partner Claire Wills said, “I’m particularly pleased that this year we are including pay gap figures on socio-economic backgrounds, which is a key priority for the firm in our global strategy. Our UK colleagues have shown great engagement, and we have worked in partnership with clients and the broader community on multiple efforts, which we believe will help us eliminate pay gaps over the longer term.”
Casting an eye over recent reports from the rest of the Magic Circle - at Slaughter and May the mean gender pay gap for 2022, excluding partners, was 13.8%, while the pay gap for employees and partners combined was 68.5% (mean) and 48.4% (median).
Clifford Chance's mean gender pay gap, excluding partners, was 16.6%. CC's pay gap for employees and partners combined was 63.5% (mean) and 35.1% (median).
Linklaters announced a mean gender pay gap for its employees of 22.4%, while its pay gap for employees and partners combined was 60.1% (mean) and 39.5% (median).
Allen & Overy recorded a mean gender pay gap for its employees of 15.4%, while its pay gap for employees and partners combined was 55.7% (mean), and 39.6% (median).
*Flick through your old GCSE / O-level Maths books if you've forgotten the difference between median and mean.