The Search for Best Practices

The Search for Best Practices

Since 1997, MCCA has been studying best practices in diversity in law departments (see box at right). MCCA has conducted annual surveys of the corporate law departments of Fortune 500 companies, which have provided baseline information about diversity in these corporations. At the same time, an ongoing series of General Counsel Roundtables has provided a forum where law department leaders and MCCA representatives candidly discuss best practices.

These surveys and forums have set the stage for the “Creating Pathways to Diversity” Study presented in this report, and results of the past research are instructive.

For example, the 1999 MCCA Annual Survey of Diversity in Corporate Law Departments found that minorities comprised 12.9 percent of in-house counsel. This was a 1.8 percent increase from the 1998 Annual Survey of Diversity in Corporate Law Departments. Of the percentage of in-house minority counsel, 7.9 percent were African American (12.7 percent of U.S. population), 2.6 percent were Asian American (2.9 percent of U.S. population), and 2.4 percent were Latino (11.7 percent of U.S. population).

At the time, slightly less than three percent of the general counsel in Fortune 500 companies were members of an ethnic minority and 8.4 percent were women.

In 1998, minority representation among general counsel at Fortune 500 companies was 2.8 percent. At that time, only 14 general counsel at Fortune 500 companies were people of color. Of the 14 minority general counsel, 11 of them were appointed to this coveted role between the years 1995 and 1998.

Things had not changed much in early 2000 when MCCA conducted follow-up calls to the companies in the 1999 survey. However, the trend did seem positive. MCCA surveyors found that of the hundreds of general counsel at Fortune 500 companies, only 16 general counsel are people of color. Out of the 16 minority general counsel, nine were actually named within the last two years. In the year 1999, there were five appointments, and in the first half of the year 2000 there were four appointments as of May 2000.

In fact, there have been more minorities appointed to the role of general counsel within the 1999-2000 two-year period than in the previous 18 years. At first sight, the increase of 14 to 16 minority general counsel at Fortune 500 companies does not seem like significant growth. However, when the rate of increase is analyzed on a yearly basis, a positive trend is evident. For example in 1999 and 2000, there were nine minorities appointed to the role of general counsel, which averages approximately five appointees per year. However, between the years 1995 and 1998, 11 minority general counsel were appointed, which is an average of approximately three minority appointees per year.

The General Counsel Roundtables, which have brought more than 200 general counsel together since 1997, were designed to provide a setting for MCCA to inventory best practices with a representative group of general counsel. Based on these roundtable discussions, MCCA has drafted a preliminary set of ten best practices:

1. The general counsel and the attorneys in the department have a percentage of their compensation tied directly to their efforts to increase diversity in the law department.

2. Diversity is defined by the law department broadly to include minorities, women and differences in culture and lifestyle.

3. Informal and sometimes formal mentoring and diversity training programs are implemented within the department.

4. Executive search firms that conduct searches for new positions in the legal department must provide a slate of diverse candidates.

5. The department has a diversity plan and a diversity committee to oversee implementation of the plan.

a. The scope of responsibility of the diversity committee typically includes:

• The identification of barriers to diversity in the department.
• An appraisal of the impact that management practices have on current diversity efforts.
• The development of a clear statement of the steps that will be taken to increase diversity within the department.
• The development of metrics that will be used to evaluate the effectiveness of the diversity program.

b. The goals of the diversity plan include objectives such as:

• Improving communications between different groups in the legal department (for example, administrative staff and attorneys).
• Improving the percentage of women and minorities throughout the department.
• Maintaining or increasing the utilization of minority-owned law firms.
• Reducing attrition rates in the department, especially for diverse employees.

6. The general counsel demonstrates his or her ongoing commitment to diversity by:

• Requiring each direct report to provide quarterly updates regarding the status of diversity efforts.
• Rewarding innovative approaches to diversity by recognition through awards (“general counsel” awards).

7. The law department’s diversity efforts are compared and ranked with the diversity efforts of all business units within the company.

8. Meetings are convened for all attorneys within a particular group (for example, all in-house and outside women counsel that represent the company) to discuss their concerns without management being present.

9. The amount of business sent to minority-owned law firms is reported to the general counsel and his or her direct reports on a quarterly basis.

10. The participation of minority lawyers in minority bar association events is encouraged and financially supported by the legal department.

While identifying these best practices, MCCA realized the need to be validated and detailed through further research. Thus, the “Creating Pathways to Diversity” project was born.

The “Pathways” Concept As readers review the findings of this study, it is important to explain the “Pathways” concept:

Compliance Diversity Inclusion

• Compliance brings people into an organization.
• Diversity demonstrates an appreciation for their differences.
• Inclusion creates an environment in which people want to stay.

The following listing, which starts with definitions of the elements of the Pathways concepts, is a blueprint for the continuum of successful diversity programs in law departments. Based on the outcome of the Pathways research, the listing will help organizations identify where they are on the continuum and what is needed to reach the next level of progression. Readers can refer back to this listing as the diversity initiatives of study participants are discussed.

From Compliance to Inclusion: Diversity in Corporate Law Departments

DEFINITION

Compliance

• Compliance: Conformity in fulfilling requirement(s) as federal, local or state government contractor to enact an Affirmative Action policy. Affirmative Action (AA): Requires the company to take positive steps to increase the representation of women and people of color in its organization.
• Equal Employment Opportunity
• (EEO): Requires that employers ensure that they do not discriminate on the basis of race, sex, religion or national origin in their employment practices.

Diversity

• Diversity: Acknowledging and accepting different backgrounds, including ethnic, racial, thinking styles, religious beliefs, communication styles, education, parental status, and sexual orientation, to name a few, without judgment or presumption. At the organizational level, organizations examine policies, procedures and structures to identify those barriers that keep people who are different from succeeding.

Inclusion

• Inclusion: Leveraging the unique backgrounds and experiences of all employees to meet the needs of customers and to achieve business goals. Inclusion is the process of removing the barriers to organizational competition thus allowing people who are different to compete equitably. In an inclusive organization, employees’ skills and talents are recognized, used effectively, valued and drive organizational success.

CHARACTERISTICS

Compliance

• Non-diverse representation among legal staff. Culture is dominated by white males.
• Perceptions among minorities and women of management inaccessibility and lack of commitment.
• Wide gap between attitudes and perceptions of minority and women attorneys and stated goals or philosophy of company.
• Gap between policy and practice.
• Diversity seen as compliance with EEO legislation and another form of affirmative action.

Diversity

• Focus on increasing diversity among legal staff.
• Basic awareness of diversity being “the right thing to do”.
• Rules for advancement or promotion are unclear among attorneys.
• Company-wide affinity or employee resource groups for different ethnicity, gender, sexual orientation, disability, and management level.
• People of color feel underutilized and not respected by staff and clients.

Inclusion

• Positive publicity for efforts results in enhanced public image, which attracts minority and women candidates.
• Demographic representation that is on par with general population. Focus on maintaining the diversity within the legal department.
• People of color and women in senior management positions (direct reports to general counsel).
• Needs of all attorneys have been identified and solutions are devised and implemented to improve productivity and communication.
• Minorities and women feel included and challenged to improve professionally.
• Rules for promotion or career advancement are specified and clearly communicated to all attorneys.

SENIOR MANAGEMENT

Compliance

• Disconnect between what senior management says it wants to do and what actually gets done.

Diversity

• Articulated business case.
• Commitment from general counsel to promote diversity.
• Senior management consults with human resources to produce a plan to meet company-wide diversity goals.

Inclusion

• Diversity part of strategic plan/ initiatives.
• Regular reports to Board of Directors on results of diversity initiatives.
• Senior management accessibility emphasized to all employees.

STRUCTURE

Compliance

• No written diversity plan or dedicated committee/task force in law department.
• Diversity primarily charged to human resources and viewed as issue of recruitment of women and people of color.

Diversity

• Person(s) within law department or human resources assigned responsibility for monitoring business unit’s progress on diversity.

Inclusion

• Law department diversity committee and/or formal plan.
• Reports reviewed regularly by senior management on status of diversity efforts.
• Compensation of senior management tied to results of diversity efforts.

RECRUITMENT

Compliance

• EEO/AA compliance as part of corporate wide policy. Human resources charged with recruitment of minorities and women to fill positions as they become available. Good faith efforts to increase diversity throughout the law department.

Diversity

• Work with executive search firms to fill positions as they become available with qualified minority and women attorneys.
• Numerical goals for demographic representation set and communicated to human resources.
• Goals include short-term (1-5 years) and long-term (6-10 years) targets. They are defined based on availability within the applicant pool.

Inclusion

• Women and attorneys of color and/or employee resource/networking groups used to provide educational workshops and/or in the recruitment of talented attorneys.
• Company maintains good relationship with local communities.
• Participation in minority vendor or job fairs as well as minority bar association events.
• Law student summer internship.
• Employee referral bonus.
• Post open jobs throughout the department.

RETENTION

Compliance

• Succession plan does not include emphasis on diversity.

Diversity

• Educational training on awareness of issues of minority and women attorneys.
• Informal mentoring for new hires.
• Work/life initiatives to meet needs of attorneys with family commitments.

Inclusion

• Work/life initiatives to meet needs of attorneys with family commitments.
• Mandatory educational training on awareness of issues of minority and women conducted on an ongoing basis.
• Corporate culture surveys to get feedback from employee perceptions.
• Reciprocal mentoring program to develop high potential attorneys.
• Leadership behaviors identified and communicated to the full department.
• 360-degree feedback for senior management.
• Succession plan identifies high-potential employees and provides opportunities to develop professionally through leadership education.

EXTERNAL DIVERSITY

Compliance

• None

Diversity

• Encourage outside counsel to increase diversity and to assign minorities and women to company legal matters.
• Statement of Principle Signatory.

Inclusion

• Track dollars spent with Minority and Women-owned Business Enterprises (MWBE) and minority and women partners or associates in majority-owned firms. Reports generated and reviewed on an ongoing basis (quarterly or bi-annually) by senior management including general counsel.
• Track Tier 2 spending by outside counsel and other vendors.
• Maintain a list of vendors who have implemented diversity programs and/ or maintain a diverse employee base.
• Vendor conferences hosted by company to strategize about how to improve company business practices.
• Work with small MWBE to improve business relationships and delivery of goods and professional services.
• Willing to negotiate the price if quality is comparable to larger suppliers.
• Partner programs with minority bar associations or with groups who work to increase diversity within the legal profession.

METRICS

Compliance

• None

Diversity

• Job offers/refusals.*
• Length of tenure.*
• Number of voluntary terminations.*
• Cost per hire per recruiting source (for example, executive search firm vs. internet job posting).
• Litigation costs by complaints/ grievances.
• Demographic representation at different management levels and practice areas (for example, number of minorities and women at key management positions).

Inclusion

• Climate Survey (number of positive vs. number of negative responses broken down into gender, race, legal specialty, and length of tenure sections).
• Return on Investment of diversity in corporate law department.
• Career Path movement or progression.*
• Performance measures.*
• Culture and environment.
• Skills and language representation.
• Turnover costs.
• Promotion rates.*
• Retention differentials.*
• Compensation equity analysis.*
• Complaints/grievance rates and costs.
• Program utilization (work/life programs, leadership development, educational training) as measured by participation and/or attendance.
• Productivity of homogeneous group vs. diverse group as measured by output quantity, quality and time to complete.

* Track by ethnic group, gender, and legal practice area. Measure them against the percentage or white males, previous year’s trends and an external benchmark.