Gender drives different buying behaviours in-house, according to a new survey that looks at the influence diversity has on the legal market, and the gap in pay for women.
The Acritas Diversity Report released last week found a definite difference in how men and women choose legal service providers for different reasons.
The survey of 1,771 senior in-house counsel found that overall male general counsel get paid more than female general counsel, and that male GCs spend more on legal services than female GCs.
It also found just 25 per cent of legal teams are diverse and yet the payoff is demonstrated in increased share of spending and more likely to be recommended to client peers.
While quality and specialized knowledge top the list for both genders, senior male in-house counsel base their preferences for legal support on results, firm reputation, relationships, breadth of service, and national/local coverage and knowledge.
However, senior women in-house counsel are more attracted to firms that understand their business, are efficient, client focused, and commercially minded — business savvy and strategic in the way they deliver advice.
Lisa Hart Shepherd, CEO of Acritas, says it wasn’t her intention to look at the gender differences when embarking on the survey, but she realized there was a “statistically significant difference” when evaluating the data.
“When I’ve been delivering this to some of the law firms over the last few weeks, some of the partners said they really recognize this when dealing with female clients, particularly on the cost side,” she says.
Men and woman also distinguished themselves in terms of their legal spend forecast for the next 12 months with men saying they will increase spending over the next year. Men said they expect to have a 12-per-cent increase in overall legal spending and a 22-per-cent increase internationally. Women forecast no increase overall but with a 14-per-cent increase internationally.
“I was quite shocked when we asked them about their spending forecast that the men were much more likely to be saying they were increasing, on balance, whereas women were more likely to say they were holding spend or decreasing spend,” says Hart Shepherd.
Then when the survey asked why men and women are attracted to various law firms, Acritas found women pay more attention to cost consciousness and firms that really demonstrate more efficiency and other value factors.
“Perhaps they are more conscious about value and spend than men are,” she says. “Men are more focused on the results and getting the right firm with highest quality and reputation.”
The survey also found that women were more likely to be employed in senior in-house roles in technology firms, which is also a cost-conscious industry, says Hart Shepherd.
Similar to studies done recently in Canada, the Acritas survey looked at how women working in senior in-house legal positions are paid less than their male counterparts.
When analyzed across the world, the trend is consistent in big markets except the Asia Pacific where female GCs earn 26-per-cent more than their male peers.
The biggest pay gap was seen in Canada where female GCs earn 31-per-cent less than their male counterparts in similar organizations.
Women aged 40-50 are “getting the worst deal of all,” according to the report, with their pay being 38-per-cent less than men. However, female GCs under 40 are paid slightly more than male GCs. When women reach age 50, the pay gap reduces by half, to a 19-per-cent pay discrepancy.
Globally, overall, pay varies dramatically across the board. Twice the proportion of male GCs are paid more than US$500,000 compared to female GCs.
On the diversity side, the survey also found “very diverse” teams of lawyers at firms achieve a 25-per-cent higher share of in-house spend than those that are not diverse at all.
“Bringing people together who have naturally different perspectives and skills, it’s going to end up in a better result if you’re bringing in different angles,” says Hart Shepherd.
A portion of the responders did say they don’t care about diversity; they are more focused on the quality of services provided.
“They should care though because what we’ve proven here is having those diverse views makes a difference and does result in a better experience,” says Hart Shepherd.
How general counsel often instruct or hand over matters can influence the lack of diversity. Without a formal plan in place, emergency matters sent out without any pre-determined requirement with a firm to provide a diverse team of lawyers will only perpetuate the lack of diversity, she says.
