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Pay transparency laws could be a ‘two-edged sword’

By Malavika Santhebennur | |7 minute read

A law firm partner has bemoaned that the gender pay gap persists in 2023 and cautioned that the new pay transparency laws could have benefits and drawbacks.

Coutts Lawyers & Conveyancers partner Karena Nicholls said the gender pay gap in law could stem from the fact that it is a male-dominated field, particularly at the senior and executive levels.

There has been a significant shift, however, with female solicitors continuing to outnumber their male counterparts and female lawyers dominating the legal profession.

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Despite this, Ms Nicholls said, remuneration between males and females has not kept pace with this shift.

“What has happened is that the traditional ways that have always been in place haven’t moved with the times,” she told HR Leader's sister brand, Lawyers Weekly.

Her comments preceded the brand's Women in Law Forum 2023, where she and a panel of speakers will unpack how to address the gender pay gap, bridge disparities, and provide more leadership opportunities for women.

According to Ms Nicholls, Coutts Lawyers & Conveyancers has an all-female team that is remunerated and promoted based on their skill sets and key performance indicators (KPIs) rather than their gender.

“I don’t understand why the gender pay gap would still be such a prevalent issue in 2023. I don’t understand how firms can justify their position,” she said.

In August, the Workplace Gender Equality Agency’s (WGEA) Commonwealth Public Sector Gender Equality Snapshot revealed that women are paid, on average, 88¢ on the dollar compared to men (this compares to 77¢ on the dollar in the private sector).

This means that in the private sector (including private practice law firms), the gender pay gap stands at 22.8 per cent.

Furthermore, earlier WGEA data also showed that women in Australia work for 56 days after the end of the financial year to earn the same as men.

Do your research before calling for pay rise

In early 2024, under new disclosure laws, the WGEA will publish gender pay gaps for employers with 100 or more employees, extending the current reporting at the industry level to individual employers.

While welcoming the move to slash pay secrecy, Ms Nicholls signalled that the pay transparency laws could be a “two-edged sword”.

The upside, she said, is that it could spark conversations about the gender pay gap, which could potentially lead women to advocate for increased remuneration that equals their male counterparts who are fulfilling the same duties.

“I don’t think women speak up that they deserve a pay rise for such and such reasons and these achievements,” Ms Nicholls noted.

“Some women are just grateful to have a role, although that’s decreasing. But men are good at speaking up for themselves.”

On the other hand, she warned, pay transparency laws could be detrimental if the person does not exercise caution when advocating for themselves.

“You need to understand exactly what your male counterpart’s role, skills, and KPIs are, as well as your company’s budget,” Ms Nicholls said.

“Do they have managerial skills? Are they reviewing other people’s work? Are you comparing yourself to someone whose role might be above yours? Therefore, is the pay difference justified? I think you’d have to be very careful when comparing yourself.”

Change starts at the top

When asked how to avoid these pitfalls so women could effectively advocate for themselves, Ms Nicholls insisted that rather than placing the responsibility on employees, employers must initiate conversations to encourage pay transparency.

“I think owners, directors, committees, or boards need to have an open-door policy around welcoming questions and answering them honestly,” she said.

“If there’s a justification for an increase or you have an explanation for the pay gap, be transparent and open about it. Otherwise, conversations will happen without your knowledge, which will either create a bad culture or push people to leave your organisation.”

Audit you structures

To close the gender pay gap in law firms, employers must audit their firms to identify whether it exists and review KPIs and leadership structures to assess whether it is justified, Ms Nicholls said.

Encouraging more women to assume leadership positions is also critical, she asserted, noting that this has progressed considerably since she began her career two decades ago.

“But I still feel like there’s reluctance to place women in leadership roles because there’s a fear of them being unavailable or unable to perform the role, even before giving them the opportunity to work in the role,” Ms Nicholls said.

Finally, Ms Nicholls urged workplaces to offer flexibility to men and women so that families could redistribute the domestic load while focusing on their careers.

“If men can also have that flexibility, he might be able to carry some of that load like picking kids up from daycare, and as such, women don’t have to carry all the load,” she said.

Ms Nicholls concluded by flagging that women who advocate for equal pay to their male counterparts must be prepared for the fact that they may not always achieve their desired results.

“But if you’re valued within your own team or by your manager, then it should be a conversation, not an interrogation,” she said.

To hear more from Karena Nicholls about how organisations could close the gender pay gap to ensure the financial wellbeing of women, come along to the Women in Law Forum 2023.

It will be held on Thursday, 23 November, at Crown Melbourne.

Click here to book your tickets and don’t miss out!

For more information, including agenda and speakers, click here.

RELATED TERMS

Gender pay gap

The term "gender pay gap" refers to the customarily higher average incomes and salaries that men receive over women.