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Words Into Action: Five Strategies Law Departments Should Use To Assist Their Outside Counsel Firms In Increasing Diversity
November 2005
Six years ago, corporate law departments began the dialogue of encouraging their outside counsel firms to make greater efforts toward the goal of increasing diversity in the legal profession. In 1999, more than 400 chief legal officers of Fortune 500 companies signed what has become known as the Diversity Statement (“Diversity in the Workplace: A Statement of Principle”), promoting diversity in the workplace. While there have been advances in gender and racial diversity in the legal field, those advances remain marginal: only 4.3 percent of partners in major U.S. law firms are attorneys of color, and only 17 percent are women.
Law departments continue to shape their workforces to reflect the diversity of the customer base. The requirement that outside counsel join in this commitment should be a part of receiving top legal service from those firms. Recognizing that not all law firms may be fully convinced of the business case for diversity, law departments must not only communicate their commitment to diversity, but may also need to proactively assist their law firms toward this end. Starting with words and then moving to action – below are five strategies law departments can use to assist the diversity efforts of outside counsel.
- Communicate The Corporate Commitment. The General Counsel should author a letter to all law firms that handle the majority of the law department’s legal work. The letter should explain the overall corporate diversity policy as well as the law department’s diversity philosophy. The letter should be sent to the relationship partner(s) as well as to the Managing Partner of the firms. It is important that the General Counsel explain why diversity is important to the law department and why it should be important to any law firm that handles its work. Law firms will respond to a well-articulated business case for diversity. Build the business case by stressing that a diverse legal team approach offers the diversity and scope of legal views that your law department expects.
- Revise Outside Counsel Retention Policy. If you have not done so already, revise outside counsel retention policies to include a diversity section and provide the new or revised section to your law firms. We recommend language similar to the following:
The company desires to encourage and expand the inclusion of women, ethnic, and other minorities within and among all law firms providing legal services. We wish to reflect the diversity of all of our customers, client base, etc. The law department of the company expects its outside counsel and outside legal vendors to include women and minority partners and associates when working on our matters. We require an annual utilization report. Outside counsel is also encouraged to utilize women and minority-owned law firms to assist on engagements as needed.
- Share Your Strategies and Challenges. Law departments historically have been more successful than law firms in recruiting and retaining women and attorneys of color. More open and direct communication between law departments and law firms can be fundamental in improving diversity in the profession. Law departments should share their successful strategies with their law firms. Even if your department is not as successful as it would like to be, share your department’s challenges and plans for meeting those challenges. If your department uses recruiters who specialize in providing a diverse candidate slate, or if your company participates in or sponsors minority job fairs, encourage your law firms to also participate and utilize similar strategies.
Law departments should share internal demographic information annually. Explain to law firms why your department’s numbers have improved or why they have not improved (e.g., turnover, promotion of lawyers to other corporate positions, etc.). Regularly “spotlight” all of your lawyers, including the diverse attorneys who will be working with the law firm on your department’s legal matters.
As law departments aim to use more minority- and women-owned law firms, vendors, and other legal suppliers, encourage your law firms to do the same to supplement their work as needed.
- Require Annual Utilization and Demographic Summaries. Regularly ask law firms for their demographic information. Begin by asking for demographics for all law firm staff, including paralegal and administrative staff. In many cases, law firm diversity demographics look better on a firm-wide basis. Let the law firm know where you think improvement is needed - more than likely, it will be in the lawyer ranks. The following examples illustrate some effective ways major corporations are implementing this strategy:
DuPont’s law department asks firms in its Primary Law Firm network to submit a self-critical analysis of what they have done in areas of interest to DuPont, including efforts to promote diversity.
Shell’s legal department asks its key law firms to include in invoices the time spent by women and minorities on work done for Shell. Shell then tracks the information and sends its key firms a report showing the percentages of women and minority lawyers, as well as billings by those lawyers, in those particular firms. Shell also provides comparative data (on an anonymous basis) informing the firms about how they compare to similar sized firms in the area of diversity.
Wal-Mart’s law department makes some of its outside counsel selection decisions based entirely on a firm’s commitment to diversity. The company constantly communicates with its firms the importance of diversity in their relationship with Wal-Mart.
- Stroke of genius. Law firms give the same reasons or excuses as to why their diversity demographics are not up to par: not enough qualified candidates, or inability to attract minority candidates. Corporate law departments must not continue to accept such excuses. Law departments must remind law firms that they are in the business of providing solutions and resolving difficult situations.
Law firms that understand why a diverse legal approach improves the scope as well as the quality of legal advice will take diversity initiatives much more seriously. General Counsel and other law department decision makers are in the best position to set diversity standards as a necessary element in providing optimal legal service.
Virginia Grant is a consultant with legal management consultancy, Altman Weil, Inc., serving clients in the areas of organization, client satisfaction, strategic planning, management structure and recruitment. She assists in implementing diversity initiatives and other human resources practices in private law firms, corporate law departments, and government agencies. Contact Ms. Grant at 610-886-2000 or vgrant@altmanweil.com.