On diversity, general ­counsels look beyond law firm accolades

Martin Ervin and Mark D. Roellig,
BridgeTower Media Newswires

In order to compete effectively, companies recognize that a commitment to diversity and inclusion is imperative. They realize that, in addition to creating better products, ideas and solutions, a focus on diversity and inclusion is necessary to expand and maintain their existing market share.

Law firm websites almost uniformly outline their support for diversity and inclusion, and they tout the recognition received for their achievements. Yet as numerous publications have revealed, diversity among leadership and equity partners remains low, and clients are digging deeper on diversity. Much deeper.

Led by corporate law departments, inquiries now go beyond what previously produced industry accolades for culture change in a law firm. The purchasers of legal services have begun to inspect the actual results of diversity activities conducted by a law firm, requiring empirical proof of progress.

General counsel now seek the answer to a simple question: Which law firms have the best diversity numbers?

“Diversity numbers” have several components:

• Who is doing the client’s work and are these individuals being compensated accordingly?

• What is the actual demographic make-up of the ranks of a law firm’s equity partners, income partners, senior associates, associates and support staff?

• Does a law firm’s own concept of demographics include the entire spectrum of diversity?

By way of example, many organizations, including MassMutual, are focusing more attention on the dollars spent on women- and minority-owned businesses, and the women and minorities within majority-owned firms, who are doing their work. This distinction has become important for recognition with organizations such as Diversity Inc., which also are looking more closely at actual performance throughout the ranks.

MassMutual asks for data from law firms beyond what its systems can capture. Although the company can extract from e-billing the total spend by diverse attorneys and whether they are partners or associates, it cannot capture data on the firm as a whole.

Thus, the company began asking the major firms it works with for this data, including their percentage of equity partners, non-equity partners and associates by diversity category. And yes, for the large firms, a breakdown of their top 100 compensated attorneys by diversity category.

Many major companies have become outspoken about how and why they choose or deny a law firm’s legal services. An increasing number of corporations are starting to “vote with their feet” regarding their use of law firms, and that decision to “walk” will be based on whether a law firm can measurably demonstrate significant strides with diversity and inclusion.

There is a developing perception that law firms have yet to reflect their clients’ emphasis on the importance of diversity in the hiring and retention of their attorneys. To make matters worse for law firms underperforming on diversity, firms are now competing for business in a more educated legal market.

Specifically, general counsel who are the key decision-makers in the purchase of legal services are not just highly experienced lawyers coming from the ranks of large prestigious firms, they also know how businesses work. They are well-attuned to many of the systemic obstacles that make it difficult for them or their firms in effectively increasing their diversity.

As a result, these general counsel recognize that the historic size and prestige of a company or firm does not necessarily guarantee that it will actively promote diversity and inclusion.

So, what are law firms missing in this numbers game of diversity? Increasingly, a key element in growing and maintaining successful brands is the development of a meaningful culture of diversity and inclusion throughout the organization. It starts with executives, managers and supervisors. It continues with the larger ranks of core providers of the business’s services, the support staff and even those who sit at the reception desk. It extends to the vendors with whom they choose to do business.

For example, in the top 100 law firms in Boston, the ranks of chief operating officer or law firm administrator include just two African-Americans (the co-author being one of them).

In sum, law firms will miss a significant window of opportunity if they seek to simply impress general counsels with industry accolades about improvements in their general firm culture but fail to make measurable progress elsewhere.

General counsel are diving much deeper below the surface in order to measure whether the law firms they are choosing are worthy of representing their brand. “Times they are a changin’” — fast!

Martin Ervin is firm administrator and director of operations at Prince, Lobel, Tye in Boston. Mark D. Roellig is executive vice president and general counsel at MassMutual Financial Group in Springfield.