Law Firm Diversity: Effectuating Change from the Outside

The lack of minority retention and promotion at law firms is not a problem that if left to its own devices would readily correct itself. Despite some progress over the past years, the overwhelming majority of partners continue to be white males. Of importance is the reality that there is not a single, easy-to-fix factor that accounts for the disproportionate number of women and minority attorneys who leave large law firms by the time they reach mid-level status. Additionally, a number of internal pressures create a "revolving door"—a senior-level vacuum of women and minorities that is ultimately self-perpetuating.

However, in a competitive market, every service provider must be responsive to its customers. As clients' interest in racial, gender, and other diversity areas increases, their financial clout can provide the external push needed to successfully effectuate change. But what can clients do to encourage the firms they work with to retain and promote more minority and women attorneys? What should clients do? And why should clients try to solve what they may view as the law firm's internal problem?

The Numbers

The statistics are startling. Attorneys of color account for 15.62 percent of associates nationwide and only 4.63 percent of partners.¹ Women, while representing 44.12 percent of associates, comprise a mere 17.29 percent of partners.²

Minority legal professionals in the private sector are more likely to be found in the largest law firms.³ However, the attrition rate remains high. Compared to males as a group, the attrition rate for male minority associates was significantly greater—17.5 percent annually versus 13.8 percent for men overall.⁴ Among lateral associates, minority women had the highest attrition rate at 24.9 percent, compared to 19.3 percent for lateral associates as a whole.⁵

The Reasons

What is driving this attrition? Two key factors are the importance of mentor relationships in firms and more subtle sociological prejudices. Women and minority attorneys are less likely to develop significant mentor relationships with powerful white male partners who affect careers and promotion opportunities in the law firm. Further, women and minority attorneys often do not have business contacts within the still male-dominated, corporate, senior-management structure who are capable of referring millions of dollars of business to high-priced large firms.

In addition, the "soft characteristics" that enter the partner selection process can unintentionally create stratifications along gender and racial lines. Certain intangible factors come into play when more senior attorneys take junior associates under their wing with the intent of guiding their advancement. It is often as nebulous as the criteria used in hiring the associates in the first place: Do they "fit the culture;" will other associates find them "easy to work with;" are they the kind of person with whom one would want to be "stuck late in the office?" The answers beg the question: Are people more likely to get along with people who are very different from them or very much like them? Are they not more prone to gravitate toward like people who have had very similar upbringings, share the same social circles, and operate from a common frame of reference in society?

Band-Aids

Law firms have undertaken a variety of countermeasures in response to the perceived problem. Most firms have approved diversity policies and some have appointed diversity officers or diversity managers tasked with the responsibility of ensuring an inclusive workplace. The downside of this measure is that making inclusiveness a single individual's fiefdom tends to make it acceptable for management and partners to assume the issue is being addressed by the diversity officer. Thus, management may divest itself of responsibility. Diversity managers, affinity groups, and the like are important, but, ultimately, may have little impact in the absence of meaningful advancement opportunities and visible signs of minority and women retention.

Solutions

These internal efforts can have a greater effect when backed by clients' "power of the dollar." Law firms no longer exist in Atticus Finch's world of local markets and hometown courts. Firms are businesses operating in a global economy and environment where their clients and suppliers, the courts and judiciary, and law students are increasingly diverse. All of these market participants can potentially impact law firm diversity. But why should clients take affirmative steps to effectuate change within law firms? Two reasons leap to the forefront: the customers that corporate America serves are increasingly diverse and corporate clients need diverse attorney teams who "think outside the box" and identify with their customers; and law firms serve as an important and irreplaceable training ground and a source of candidates for in-house legal departments.

Clients can send an effective message to their firms that their companies value inclusiveness and want the firms they employ to do the same. The most important factors to convey, as precisely and specifically as possible, are that diversity is good business and that firms that demonstrate a commitment to diversity will receive repeat business for that reason.

There are a number of steps clients can take to actively promote inclusiveness within the firms they employ.

1. At a minimum and on an annual basis, request that the law firm provide a summary of its diversity policies and activities. Compare this report to prior years to evaluate the firm's progress or lack thereof. Such a request forces firms to articulate their diversity goals and objectives in writing, thereby committing their institution to the enterprise.
2. On a quarterly basis, request a "diversity profile" in which the firm indicates the number of women and minority attorneys working on your company's matters. This simple act of recordkeeping could spur firms to consciously evaluate the diversity of their staffing patterns and hire more female attorneys and lawyers of color in order to meet the expectations of an increasingly diverse client base.
3. Create a report card: Track, evaluate, and communicate law firm's progress with respect to the "diversity profile" of women and minority attorneys working on client matters. Charting against historical patterns creates a market-imposed measuring stick that high-achieving firms may use to evaluate themselves in order to stand apart from rival firms, which can also be used as a marketing tool for both recruiting and client acquisition. Creating a dialogue between clients and firms regarding diversity issues may also advance diversity goals.
4. Organize at least one substantive team meeting where the client meets the team face-to-face, including women and minority attorneys. Such meetings, where people can put a face to a name or a voice on the telephone, are powerful tools for creating and strengthening the attorney/client relationship, creating a sense of ownership in associates. Additionally, the client can observe firsthand the type of work and responsibility slated for women and minority attorneys.
5. Designate women and minority partners, counsel, and associates working on your company's matters to become principal client liaisons. Access provides female lawyers and attorneys of color with rainmaking opportunities that can increase their stature and prominence within the firm and improve retention and promotion.
6. Send a letter annually in the fall (during September or October) to partners to coincide with the firm's decision on offers to law school candidates. Annually, send another letter (during October or November) to law firm partners coinciding with the firm's promotion decisions. The timing of such letters, stressing the importance of inclusiveness to the client, serves as a significant reminder of the priority the client places on diversity. This action helps firms to focus on areas where they can make substantial strides. The letter should convey that increasing the number of not just women and minority associates, but, more critically, increasing the number of women and minority partners at the firm, should be the major focus of the firm's commitment to diversity.
7. Place firms on your list to receive publications, announcements, and advertisements regarding corporate diversity efforts and activities. Keep inclusiveness issues on the radar screen all year and spur firms to evaluate their own progress by a benchmark many of them may not be aware of or properly considering.
8. Educate partners by sponsoring diversity events and inviting partners to attend or by participating in events sponsored by firms. For example, every year Shell Oil Company hosts diversity seminars for its outside counsel where hundreds of attendees gather to discuss strategies for promoting and advancing minority lawyers. In February 2005, Weil, Gotshal & Manges LLP sponsored a diversity panel attended by partners, counsel, and senior staff members at which firm clients showcased their efforts to hire, retain, and promote underrepresented groups. Coordinating networking events co-sponsored by corporate clients and law firm affinity groups is another effective method of bringing the issue to the forefront of attendees' consciousness, and may initiate steps that might otherwise remain a low priority.
9. Put your money where your mouth is. Use diversity benchmarks as a factor in retaining or continuing relationships with law firm partners. Sara Lee Corporation's General Counsel Robert Palmore circulated a "Call to Action" letter to fellow general counsel in November 2004, urging them to follow Sara Lee's example in sending more business to outside counsel that positively distinguish themselves with respect to inclusiveness, while curbing their support of firms that show no meaningful commitment to diversity. To date, more than 90 companies have signed on to the initiative. Also, MCCA® has developed a web site devoted to the Call to Action (www.CLOCALLTOACTION.com).

 

10. Pay attention to who you send to represent your company. If your company sends members of your in-house staff to meet with the firms that work for your corporation, how diverse is your group and how well-prepared are they to articulate your company's diversity values? Your lawyers need to let the outside lawyers that they meet with and manage know that they share their company's diversity values and will be evaluating the firm's progress in this area. If someone asks members of the in-house staff about your diversity efforts, they should be prepared to share what efforts are underway at your company.

The final strategy is a critical ultimate step. Suggestions, warnings, and recordkeeping will not initiate change in the hiring, retention, and promotion of women and minorities in law firms without the existence of concrete consequences for failure to change. As stated by Caren Snead Williams, general counsel of JM Service Center LLC (a signatory of the "Call to Action" letter), the "Call to Action" initiative "is long overdue. It is an important opportunity for general counsel and their companies to collectively highlight the issue of improving diversity in law firms." The message sent to firms seeking her business is that "diversity matters. If you anticipate making a pitch for our business, be prepared for me to ask about progress on diversity issues and be prepared to demonstrate that progress in the form of increased numbers of women and minority partners."

So perhaps the most compelling reason why corporate America should involve itself in the business of improving diversity within their law firm partners is because they can do it, and do it effectively.

Holly E. Loiseau is Of Counsel at Weil, Gotshal & Manges' DC office and Anant Raut is an associate.

NOTES

1. See "Women and Attorneys of Color at Law Firms," National Association of Legal Placement (2006), p. 1 at http://www.nalp.org/assets/library/378_0206research.pdf.
2. Id.
3. See "Diversity in Law Firms," U.S. Equal Employment Opportunity Commission (2003), p. 13 at www.eeoc.gov/stats/reports/diversitylaw/index.html.
4. See "NALP Foundation to Release New Study of Associate Attrition," National Association of Legal Placement (2003), p. 1 at www.nalp.org/assets/library/141_0903keeper2.pdf.
5. Id.

From the May/June 2006 issue of Diversity & The Bar^®