December 19, 2016
Diversity has been a major issue for larger law firms in recent years and it is now standard for those firms to have formal diversity programs and an infrastructure of resources and practices focused on increasing diversity within the attorney pool and recruiting and retaining women and minorities. Clients have also taken a proactive role in this area by creating incentive for law firms to support diversity efforts. For example, in 2008 Microsoft announced a Law Firm Diversity Program that included a change in its legal fee structure for 17 “Premier Preferred Provider” law firms that collectively handled more than $150 million of legal work for the company annually to provide that each firm would be eligible for quarterly or annual bonuses based on whether it achieves concrete diversity results.
In a 2005 paper addressing “Best Diversity Practices in Law Firm,” Velasquez and Burrello of Diversity Training Group usefully identified seven reasons why law firm diversity programs fail including lack of commitment at the top; failure to assess the firm’s environment when creating and implementing diversity initiatives; over emphasis on recruitment and hiring and failure to focus on retention and development; failure to include diversity objectives in the firm’s strategic plan; lack of understanding of diversity phases and the need to view creation of a diverse organizational as a developmental process; ignoring the importance of training and development; and “cultural incompetence,” including fostering an a work environment that continues to place a high value on “sameness.” The DRI Law Firm Diversity Retention Manual issued in 2005 by the DRI, formerly the Defense Research Institute, included another list of common characteristics of the failures of law firms with respect to diversity initiatives including missing or inadequate commitment at the top; emphasis only on recruitment; failure to acknowledge the firm’s culture; lack of understanding of diversity phases; failure to establish specific tactics; ignoring the importance of training and development; and failing to understand the implications of a changing workforce.
Commentators have observed that law firms might take some guidance from practices in the corporate world regarding improving the methods that firms can use to create expanded leadership pipelines for women attorneys. Recommendations from the Boston Consulting Group focus on setting measurable and quantifiable objectives for recruiting, retention and promotion and take into account the need to address several common themes that appear to impact gender diversity in the management arena: a culture of office presence and “face time”; a lack of off- and on-ramping procedures for women who leave and then return to work; male-oriented selection criteria or “self-cloning” (i.e., the tendency to hire and promote individuals with similar backgrounds and personalities to the decision-maker); a lack of gender diversity awareness among management; and inadequate management of leadership pipelines.
The need for law firms to directly and quickly address issues regarding advancement of women lawyers is accentuated by the fact that women are rising more quickly in the corporate arena and thus are becoming increasingly important in decisions regarding retention and oversight of outside lawyers. For example, in August 2012 the Wall Street Journal Law Blog reported that 21% of the general counsel spots among Fortune 500 companies were held by women, continuing an upward trend that had been going on during recent years, and that the number of women who had reached the CEO spot among Fortune 500 companies was also hitting a record number. Commentators have noted that the increase in women leaders in the corporate world has been driven, at least in part, by growing pressures from investors and other stakeholders to see more women and minorities included in top management teams. This month’s supplement to Business Transactions Solutions on WESTLAW includes a template for a law firm diversity statement (§4:29) and two articles on “Best practices for law firm diversity programs” (§4:43) and “Law firm organization of diversity activities” (§4:44). For further information on Law Firm Management, see §§4:1 et seq. in Business Transactions Solution.
Titles by Alan Gutterman
- Understanding Legal Needs of Technology Companies: Leading Lawyers on Performing a Legal Audit, Managing Financial Risk, and Prioritizing Legal Needs (Inside the Minds)
- Legal Compliance Checkups: Business Clients
- Business Entities (California Transactions Forms)
- Business Transactions (California Transactions Forms)
- Buying a Business: What You Need to Know (Quick Prep)
- Business Transactions Solution (WestlawNext PRO)
- Business Counselor’s Law & Compliance Practice Manual, 2014 ed.
- Corporate Counsel’s Guide to Strategic Alliances, 2014 ed.
- Corporate Counsel’s Guide to Strategic Alliances with Forms on CD, 2014 ed.
- Corporate Counsel’s Guide to Technology Management and Transactions, 2014 ed.
- Corporate Counsel’s Guide to Technology Management and Transactions with Forms on CD, 2014 ed.
- Hildebrandt Handbook of Law Firm Management, 2015 ed.
- Going Global: A Guide to Building an International Business, 2015 ed.
- Going Global: A Guide to Building an International Business with Forms on CD, 2015 ed.
- Business Counselor’s Guide to Organizational Management, 2012 ed.