Legal Village

Freshfields beats Bloxham but firms are still vulnerable

Posted 11/10/2007 by Clare Murray

So Freshfields won. Having access only to the small snippets from the judgment circulated in the press, it’s difficult to pinpoint exactly the basis of the decision. It seems that the tribunal was satisfied that Freshfields’ pension reforms were a proportionate means of achieving a legitimate aim and that therefore the age discrimination was justified.

Where does that leave the profession? I believe that, in practice, Freshfields’ success actually leaves law firms and the legal sector in a potentially more vulnerable position for the future.

One of the most damaging and expensive types of claims a law firm can face is a discrimination claim of any form (age, sex or otherwise) by one of its partners. In addition to the significant risk of losing in front of an unpredictable tribunal panel with compensation typically based on a number of years’ profit share, there are the eye-watering legal costs, the bad press (papers love law firm laundry), the damage to internal partner relations, the sucking away of senior management time (easily five-10 days on the witness stand), the impact on recruitment and retention and the negative impact on pitches to corporates with high diversity standards within their suppliers.

And yet I suspect firms are likely to be more emboldened by Freshfields’ success in their response to their own partner discrimination claims. There is a tendency in law firms to feel a particularly bitter and personal outrage when one of their number issues discrimination proceedings against the firm, followed by a knee-jerk reaction that the claims should be defended to the fullest extent, to trial if necessary. I believe Freshfields’ success will only encourage those often misplaced convictions. 

The reality is that, like the cobbler’s unshod children, law firms tend to be the last to introduce effective systems for eradicating unlawful discrimination at work. They all  have a beautifully crafted equal opportunities policy and complaints procedures, but rarely have proper training for senior management and partner in diversity issues generally. Even less likely is training in how to deal with diversity issues affecting partners – where the biggest liabilities are likely to be created.

The press coverage afforded to recent diversity initiatives of a few firms highlights the novelty of such ideas in our sector compared to other sectors where they are accepted as the norm. 

So where does that leave us? I stand by the view that it is damaging for the legal sector as well as the law firm and partner concerned for cases like the Freshfields-Bloxham case to come to trial and to public attention. Obviously once in a while a case may have such knock-on consequences that as a matter of principle it can’t be settled and perhaps Freshfields was such a case; they are, however, a rarity.

Partnerships nevertheless need to do more to create effective training, to lay down the paper-trail when handling matters that might result in discrimination claims, to address head-on issues of partner underperformance, to record those issues in formal appraisal systems and to follow that up with effective performance management. Tribunals love written evidence and the lack of it is what often catches law firms out, even when they have a good case.

And, as counter-intuitive as it feels to lawyers, we need to involve other professionals - such as good, robust HR directors - in our decision-making processes, rather than just leaving them to clear up the mess afterwards.