Promoting a good working culture in law firms - Part 3: The importance of equality, diversity and inclusion (EDI) initiatives in promoting a good working culture

Julie Norris and Jessica Clay spoke at the end of January 2020 at the ARK risk and compliance conference on the topic of promoting a good working culture in law firms.  This is the final blog in a series of three blogs. It focuses on the importance of equality, diversity and inclusion (EDI) initiatives in promoting a good working culture.

The importance of equality, diversity and inclusion (EDI) initiatives in promoting a good working culture within law firms

Why are EDI initiatives so important?

One of the key responsibilities for any employer is to create an inclusive workplace culture where all individuals feel respected and supported.  To be clear, the responsibility in respect of EDI does not stop at mere compliance with relevant legislative requirements, as these only set the basic minimum standard employers should be seeking to achieve.  Nonetheless, it is helpful to set out, briefly, what these legal obligations are.

The legislative and regulatory framework

First, there is the overarching Equality Act 2010, which brought together extant legislation previously covering a range of EDI areas, such as race relations and sex and disability discrimination. The Equality Act now provides a comprehensive legal framework to protect the rights of individuals and advance equality of opportunity for all.

In relation to the legal services sector, there are further key obligations in relation to EDI. 

This starts with the Legal Services Act 2007 (LSA) with the following key provisions:

• Section 1 sets out the “regulatory objectives” which all the approved regulators have a duty to promote. The relevant objective here is “to encourage an independent, strong, diverse and effective legal profession”.
• Section 162(1)(d) makes provision for the Legal Services Board (LSB) to provide guidance for the purpose of meeting the regulatory objectives. Accordingly, in February 2017, the LSB published revised guidance, setting out its expectations of approved regulators for encouraging a diverse workforce. This guidance also detailed the formal assessments framework the LSB had in place to ensure effective collection and ongoing monitoring of EDI data by approved regulators from their regulated communities.

The Solicitors Regulation Authority (SRA), which regulates law firms and those working within them, also sets out key obligations in respect of encouraging EDI and prohibiting discriminatory behaviour in its recently launched Standards and Regulations (StaRs):

Standards and Regulations (StaRs):

• Principle 6 states that you must act in a way that encourages equality, diversity and inclusion. The SRA Principles are all-pervasive in two respects: the first is that they apply to all those the SRA regulates, namely solicitors and law firms but also non-solicitor employees within law firms; the second, is that all seven Principles now apply, where the context permits, both inside and outside of professional practice.  In EDI terms, this could be particularly relevant in relation to your use of social media outside of the workplace but also in relation to your day-to-day ethical values and behaviours. 
• Paragraph 1.1 of both Codes of Conduct (for Individuals and for Firms) states that “You do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services”. Again, this provides a clear nexus between your ethical values/behaviours and how you conduct yourself within the workplace.
• The SRA’s Enforcement Strategy also clearly states that “as well as making sure solicitors are competent”, the SRA wants to “promote a culture where ethical values and behaviours are embedded”. Indeed, this is one of the three purposes the SRA states it is seeking to achieve through regulation.
• Accompanying the new StaRs, the SRA has also launched a new piece of guidance setting out its approach to EDI.  In addition to reminding those it regulates about the underpinning legislative framework, the guidance also sets out the requirements imposed by the LSB via its statutory guidance on all regulated firms to collect, report and publish diversity data about their workforce every two years.  The SRA’s next collection exercise is due to take place in September 2021 and the SRA has issued guidance on this process.

Being a responsible employer

Legislation sets the minimum legal obligations, those being to ensure that your firm takes steps to remove potential discrimination, harassment and victimisation. It is clear however, that your regulatory obligations extend beyond mere compliance with the law: not only is an inclusive approach increasingly recognised as a commercial imperative for businesses, but it is also a fundamental component of promoting an optimal workplace culture. 

A one-off and one-size-fits-all approach is not an option

What firms choose to put in place, in terms of appropriate policies and procedures relating to EDI, will no doubt be proportionate to, and dependent upon, the nature of the business and the size of the firm. Accordingly, to give effect to these obligations in the day-to-day running of your firm, and with the intention of improving your firm’s culture, you may want to think about the types of EDI policies and procedures you want to implement, or at least update, in order to achieve fair outcomes. As we discussed in our first blog , culture is not static and this means your EDI policies and initiatives cannot be set in stone. They will need regular re-visiting and updating and will need to reflect the firm’s regulatory obligations in addition to the basic requirements set out in the underpinning legislation.

Key considerations

Here are some key steps you might want to consider implementing:

1. Produce a statement of policy

This does not need to be complicated, but will need to be a comprehensive statement about what EDI means for your workforce, clients and other third parties you deal with.  This document is not to be confused with your actual EDI Policy. This policy statement might include information about your commitment to the principles of EDI as well as setting out any legislative requirements. Such a statement usually states that you have a workplace culture which does not, for example, tolerate harassment or bullying (often referred to as a “zero-tolerance” approach).

2. Implement an EDI Policy

or review the one you have in place - the Policy should outline your approach to key issues such as recruitment, retention and progression and be outward-facing so that clients understand how you are seeking to encourage equality of opportunity and respect for diversity within your workforce – ultimately these are the individuals acting for your clients.

3. Consider your approach to monitoring and analysing your diversity data

in light of the LSB’s statutory guidance.  You will need to be thinking about how you collect, monitor, analyse and report (this includes publishing) diversity of both your own workforce and of your clients.  You must not see this simply as a tick-box exercise to comply with the requirements set by your oversight regulator and implemented by the SRA, but rather, as an opportunity to better understand the needs of your staff and clients.  It might also highlight areas where you need to improve your performance and the quality of service you are providing to your clients.

4. Develop informed EDI initiatives

from the data you have collected and analysed.  Again, you will want to explore presenting this information in a way which works best for your firm, particularly with regard to any highlighted weaknesses or areas for improvement. These initiatives are likely to be different depending on your firm, but examples might relate to increasing representation of female and/or BAME solicitors at more senior levels in your firm, or recruiting trainees or apprentices from disadvantaged socio-economic backgrounds. 

5. Implement a recruitment policy

or review the one you have in place.  In terms of recruitment, everyone wants to attract the best individuals, so you will want to think about adopting an approach to recruitment which is fair and encourages promotions, in order to maximise the chances of getting and retaining the best people for each role. Recruiting a diverse workforce is likely to increase employee wellbeing (and in turn increase productivity by enhancing motivation) and could reduce your recruitment costs (if you have less staff turnover). A further benefit is that a diverse workforce will better understand the needs of diverse clients, enabling you to be better placed to provide a quality service to those clients.

As we set out in our first blog, managers will have a key role in promoting EDI within their firm, and to drive forward a workplace culture which is built upon trust, two-way engagement and loyalty. This responsibility will extend to identifying and removing barriers, for example in recruitment, promotion and progression. 

About the authors

Julie Norris is a Partner in the Regulatory department and specialises in advising law firms and legal professionals on legal ethics, investigations, and public law matters.

Jessica Clay is a Senior Associate in the Regulatory department and specialises in legal services regulation, with a focus on regulatory compliance, legal ethics, investigations and public law matters.