Finance

‘Things are broken’ on diversity in the legal sector, says top Jefferies lawyer

Jefferies’ top lawyer for EMEA and Asia has sounded a scathing note about the legal profession’s progress on diversity.

“I feel like things are broken,” Daniel Winterfeldt QC tells Financial News. “I feel like we’re almost moving backwards”.

Major law firms such as Freshfields Bruckhaus Deringer, Linklaters and Ashurst have appointed female leaders for the first time in the past year, as the sector looks to get to grips with diversity.

But Winterfeldt said too many initiatives in the industry are examples of what he calls “jazz hands diversity”, focused more on appearances than making concrete change.

READ ‘Progress is painfully slow’ – Can the Magic Circle law firms fix their stark gender imbalance?

“The issue we have is that people are lost in this space, because the diversity work they’re doing is very much geared towards marketing and profile, and not towards tangible outcomes around talent,” he said.

The solution — Winterfeldt says — is to focus on the data. The InterLaw Diversity Forum — a legal sector diversity group he chairs — launched a new initiative in 2021 aimed at collecting more accurate diversity figures on the sector to drive change. 

A year on, Winterfeldt has high hopes for the project, after scoring backing from a string of major companies including banks such as UBS, NatWest, HSBC and Santander.

“To put it modestly, we want to revolutionise the legal sector when it comes to diversity, inclusion and culture,” he says.

Turning the dial on diversity

The InterLaw Diversity Forum published a report last year based on a survey of 1,100 lawyers on career progression in the industry.

“This report shows you huge differences between straight, white, elite-educated lawyers and everybody else,” Winterfeldt said.

It found Black women are the lowest earners of any group, top female earners make about a third of what top earning white men make, and the highest earning gay and bi-sexual men are making around half of what highest earning straight men make.

“You see huge differentials; that’s what you need to be looking at,” he said.

Winterfeldt says law firms need to focus more on the experiences of minority groups within their organisations and address differences in career progression and pay.

“You can have Black History Month events until the cows come home. You can have International Women’s Day breakfasts. But are you looking at women getting to equity partnership? Are you looking at whether ethnic minority lawyers are remunerated in the same way?”

“We really want to see that shift to digging into the real stuff around where people are at, and what they can be doing to improve,” he added.

Getting to grips with the numbers

In 2021, the InterLaw Diversity Forum launched a survey aimed at creating a platform to centralise law firm diversity data and make it more transparent to law firm clients.

More than 30 major companies have signed up to back the scheme including banks HSBC, UBS, Barclays, Natwest, Jefferies and Santander, tech giants Google, Uber, Microsoft and Peloton, payments company Visa Europe, and telecoms company BT.

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The companies ask their main law firms to fill in the diversity questionnaire, which is then returned to InterLaw. The data remains confidential, but client organisations can access it via a dedicated portal.

The idea is to create an annual picture of a law firm’s diversity, which can then act as a benchmark to build upon.

“[The questionnaire] goes into promotion rates, attrition rates, it asks questions around corporate governance. Do you have non-executive directors? Do you have term limits? So it really captures the culture of the organisation,” Winterfeldt said.

“It’s not being done to get law firms fired or think that they’re horrible,” Winterfeldt says. “All we’re saying is let’s create a baseline. And then let’s see progress year-on-year.”

Many large clients — particularly in the USA — already ask their law firm suppliers for diversity data when asking them for pitch on projects or legal panel spots.

Winterfeldt argues that the fragmented nature of this data means it does not make a meaningful impact on diversity, however.

“They’ve been doing that for a decade in America. And it’s not changing the profession,” he says.

He hopes the InterLaw approach — with clients able to see and compare data on their supplier law firms all on one platform — will accelerate change in the sector.

“With this transparency we create a revolution,” he said. “Everyone will be focusing on the same data, the same data points, the same statistics. And we’ll know where we’re moving and how we’re moving in a really transparent and open way.”

Building out the base

Winterfeldt says in-house legal teams have been enthusiastic about the project.

“The clients love it, because it’s exactly what they need. So it’s a very easy sell….people are super excited about it,” he said.

But its reception among law firms has been more mixed.

Among law firms, the reaction ranges from firms saying: “‘Sign me up. Where’s the dotted line?’” Winterfeldt said, to a “small handful of firms” that have been resistant to the scheme.

“But I think that a little bit of resistance is a sign of success,” he said.

READ Inclusion standard launched as City tries to back diversity up with numbers

Although the project is still in its infancy, Winterfeldt says its early backing by major users of law firms was heartening, with more big name signatories to be announced.

“The first year is a roaring success, because we’ll have over 30 clients, and we’ll have between 40 and 50 law firms onboarded,” he said.

His hope is that with accurate diversity data available to both clients and law firms, the top law firms will shift their focus from talk on diversity, to action.

“It is about transparency, and ending the game of ‘jazz hands diversity,’” he says. “Stop putting on the show, and start actually focusing on real tangible efforts that will shift and change these key metrics.”

To contact the author of this story with feedback or news, email James Booth

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