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Corporations Are Pressuring Firms to Diversify—Not!

Vivia Chen

August 1, 2017

Screen Shot 2017-07-28 at 10.25.04 PMMaybe it's because I get jaded easily, but I just can't get myself excited that the legal profession is really getting on the stick about diversity or women.

I know, I know, you're going to tell me about the swell efforts going on. Like that Inclusion Initiative, recently reported by Corporate Counsel, in which 32 corporations spent over $226 million in 2016 on work performed by minority- and women-owned law firms. Or the Mansfield Rule Initiative, launched by Caren Ulrich Stacy, CEO of the Diversity Lab, in which firms commit to presenting at least a 30 percent slate of women or minorities for equity partnership promotions and lateral positions.

First, let me say I think these are worthy, innovative initiatives. (I'm especially heartened by the money expended by the Inclusion Initiative. To me, nothing says commitment like money.)

So why am I still not optimistic that women and minorities are top priorities of Corporate America?

Because if you read the latest findings by the Association of Corporate Counsel (ACC) carefully, you'll see that the vast, vast majority of corporations don't really keep tabs on outside counsel. (The ACC report also shows huge divides between the sexes. Women lawyers dominate lower-paying positions and women think they are paid unfairly. While 48 percent of women said there was a definite compensation gap by gender, only 8 percent of men felt the same way.)

Clients might make a lot of noise about diversity but when it comes to keeping score on outside counsel, they're doing squat. Here's what I mean (ACC surveyed 1,800 in-house lawyers from 53 countries):

-  On the diversity front, only 6 percent of respondents said their departments track the diversity efforts of their outside providers through e-billing systems or other data driven methods not reported by the provider (71 percent said there was no such tracking).  

-  As for women, a measly 3 percent said their departments track women in management positions of their outside providers through e-billing systems or other data driven methods not reported by the provider (ACC did not give the rate that said there was no tracking).

But when asked whether diversity was discussed by the board or the C-suite, 45 percent of  counsel answered in the affirmative and 39 percent in the negative (for U.S. counsel, 43 percent said yes v. 41 percent no).

I hate to sound harsh, but doesn't all this suggest that there's more talk than meaningful action on the diversity front by corporations? I mean, how many times have we heard that clients are pressuring law firms to diversify and promote women?

Veta Richardson, head of ACC, suggests that I might be jumping the gun by putting the blame on corporations. "In the U.S/, only a minority of companies have sophisticated systems, like e-billing trackers," she explains, adding that ACC membership consists of both large and small companies.

While it's true that high revenue companies tend to keep better tabs on outside counsel through e-billing program or other data-driven methods, the numbers are still paltry. For instance, the ACC study shows that respondents who work for companies with over $10 billion in revenue indicated the highest rate of tracking (18 percent) by their employers. That said, wouldn't you expect far more of these companies to be keeping tabs on their law firms?

If companies are so upset that their outside counsel aren't doing enough to promote minorities and women, what exactly are they doing about it? It doesn't seem they're pressing them that hard for verifiable data about their lawyers.

Richardson says that companies might be doing more than meets the eye. "I don't think we should feel discouraged," she says, adding that companies can push hard for diversity even if they don't have formal tracking systems.

I hope she's right. But so far, I haven't been too impressed by all these noble corporate intentions.

vchen@alm.com

 

 

 

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Corporations in the person of the General Counsel may pressure outside firms to promote diversity but the hard truth is that big dollar engagements are awarded through the old boys' network which is often populated above the female GC level. That was certainly my experience as a Fortune 500 GC

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About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: VChen@alm.com

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