How can we work together to build diversity in financial services recruitment?

Sameer Chauhan specialises in recruiting in-house lawyers for financial sponsors and buy-side financial institutions. He works across the globe with private equity houses, venture capital funds, alternative investment managers, state backed/sovereign investment funds, hedge funds, asset managers and credit/debt funds. He also works closely with their portfolio companies to help build and scale up their legal functions.

In a previous article Sameer discussed the growing challenge to develop a more diverse workforce in the sector and the need to change recruitment practices, which he provides further thoughts on below.

The first challenge is that there are fewer professionals from diverse backgrounds going into the legal disciplines financial services companies are looking for. “It’s widely accepted that immigrant families push their children to take jobs that they perceive to be secure, safe and demonstrate excellence,” Sameer said. “This often means becoming a doctor, lawyer, accountant or engineer. In the legal sector, litigation, banking and finance law are deemed acceptable, but corporate law—the very discipline financial services companies need—is not. It’s seen as risky and not a ‘safe’ career choice.”

The second challenge goes back a step further. University education is expensive; postgraduate legal qualifications leading to a training contract can be prohibitively so. Many potential candidates have to support a family and it is not hard to understand why individuals from less affluent and more diverse backgrounds often choose to take a different career path in order to secure an income earlier.

“Our financial services and venture capital clients come to Marsden because they want to secure the best candidates with experience in the best law firms. Access to these roles is a challenge for those from more diverse backgrounds. We’re still seeing, for example, a significant number of law firms shutting their doors to individuals that have had a less traditional path to qualification. There are apprenticeship opportunities but the majority of top-tier law firms view these differently from a traditional university career path, and training contracts are less likely to be offered to these candidates – which in turn means that the opportunity to move to an in-house role rarely presents itself.”

Sameer believes the challenge is cyclical, and financial services organisations seeking in-house counsel, law firms and educators need to work together.

“One of the main barriers to change is that there are relatively few role models from diverse backgrounds in the financial services and in-house legal sector. This makes it harder for those organisations to understand the challenges within the sector as a whole and when it comes to more diverse recruitment practices, creates a barrier for those considering this sort of career. They can’t imagine themselves there. So, they look to areas where they do see ‘people like them’ and that perpetuates the problem.”

Education about the financial services sector—and how it intersects with a legal career—is equally important. Work needs to be done to demonstrate to communities that these types of jobs are valid, secure and safe. Schools also need to encourage students to view these types of careers differently.

Law firms could also open up opportunities for entry through less ‘traditional’ educational routes, for example via work experience schemes and by encouraging those that do not have a red-brick university background. Funds and financial sector firms could assist by stipulating to private practice law firms that if they want to secure them as clients then they need to put more people from diverse backgrounds through training contracts as a whole and through the VC or corporate training seats in particular.

“Ultimately, growth in diversity within funds and financial services will lead to people being more aware of the opportunities as more people do it. Schools, universities, VCs and private practice law firms need to work together to bring about a material change in diversity in financial services recruitment.”