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Companies Want Lawyer Diversity, But Firms Lack Set Standard (1)

Feb. 12, 2021, 11:01 AM; Updated: Feb. 12, 2021, 6:00 PM

Laura Acosta estimates that her law firm, Goodwin Procter, spends up to 800 hours every year responding to diversity questionnaires from 10-15% of its clients.

Acosta, the firm’s managing director of diversity, equity, and inclusion, said one member of her team spends about 20% of her time working just on Goodwin’s top clients’ diversity information requests in collaboration with multiple Goodwin teams, such as finance and human resources information systems.

Like many law firm diversity chiefs, Acosta is aiming for real diversity in the industry but feels the data gathering process could be more efficient.

“Responding to client data requests is important to us, but it takes time that we could be using on the work within the organization,” Acosta said. “We are getting a lot of different requests from different clients, and there isn’t a good way to streamline the process internally. We have to respond on a bespoke basis to almost every request that we get.”

Clients are now asking about outside firms’ lawyer attrition rates and about origination credit, as well as other questions that go beyond checking demographic boxes and can vary drastically from client to client. The common goal is to evaluate whether firms are inclusive and equitable in addition to simply being diverse.

More probing diversity questions have been a welcome change in the legal industry, but one that has led in-house and outside counsel to call for more consistency in reporting requirements to reduce administrative burdens that can take time away from other important D&I work. Outside organizations have responded of late by developing new ways to streamline and centralize law firm diversity data.

“The more we can adopt more uniform approaches, the more we can drive progress because then it makes consistent, clear expectations that firms can scale around,” HP Inc’s former chief legal officer Kim Rivera told Bloomberg Law in an interview last summer. “I know lots of GCs that take different approaches, different incentives, different programs. That creates a lot of complexity for firms.”

Existing Tools

The push for law firms to become more diverse began more than a decade ago, Acosta said, but clients have ramped up the pressure in recent years. Their push to build a more equitable industry has been further catalyzed by prominent instances of racial injustice such as George Floyd’s murder and subsequent protests last summer.

Acosta added that Goodwin has seen a growing number of diversity requests from its clients as more and more corporations and general counsel around the country pledge to do their part to promote diversity and racial equity. For the legal industry, that looks like giving more diverse attorneys origination credit, staffing diverse lawyers on major matters, and sponsoring them to reach the overwhelmingly White upper echelons of law firms.

White lawyers have continued to comprise over 90% of all law firm partners over the past decade, according to the National Association of Law Placement’s 2020 diversity report. Women still only constituted about 25% of law firm partners last year, the report said.

Ballard Spahr chief diversity officer Virginia G. Essandoh said she’s seen client diversity requests evolve and improve over her 13 years with the firm. While general counsel used to ask for pure demographic information, she said, they are increasingly asking more revealing and targeted questions about how the firm supports diverse attorneys internally.

“’Talk to us about your compensation system for partners. Tell us how many of your top 10 compensated partners are women or people of color, or other diverse individuals. What are your attrition rates for the last three years by race and ethnicity? Why did you lose X percentage of women in 2017?’ That’s the level of questions we’re getting,” Essandoh said.

Essandoh said one member of her team is dedicated full-time to responding to client diversity and inclusion requests. Wiley CDO Rashida MacMurray-Abdullah said nearly every request for proposals the firm received in 2020 included a request for diversity data.

Marie Ma, vice president and deputy general counsel of Gap, Inc., said the company used to administer its own firm-wide diversity requests before realizing the “massive” administrative burden on its own law department and its outside firms.

“I remember sitting on a panel next to somebody from Orrick Herrington, and they shared anecdotal data points on the amount of resources and headcount and hours and number of surveys that they had to review annually. It sent a message that this is not the right way to do the work,” Ma said.

Ma and Gap’s legal team now rely on Diversity Lab, the creators of the Mansfield Rule for diversity in hiring practices, and existing data from the Minority Corporate Counsel Association to reduce the scope of diversity requests the company sends to its outside firms.

Many law firm diversity surveys exist, like the model diversity survey from the ABA, but Acosta said many general counsel have moved away from that survey and those like it in recent years as the conversation around diversity became more nuanced.

“What’s happened more recently is that the model survey is actually not as aggressive as some clients would like, and they’re now creating their own survey that is asking deeper and more probing questions than the model survey would,” she said.

New Efforts

The ABA is hoping that a new version of its model diversity survey along with a report on the data from the original survey, both scheduled for release in late February, will address both the need for efficiency and nuance that general counsel and law firms have expressed.

“We’re trying to help general counsel collect information so that they can understand where law firms are in their diversity efforts and can have meaningful conversations about that. We realized that the questions [in the original survey] were asked in such a way that we couldn’t get a clear view on certain issues like attrition of associates, for instance,” said Michelle Behnke, the chair of the ABA’s Commission on Racial and Ethnic Diversity and founder of Michelle Behnke & Associates.

Diversity Lab founder and CEO Caren Ulrich Stacy said her organization will also aim to streamline law firm evaluations through its recently launched Diversity Dividends Collective. Instead of 100 clients asking a law firm 100 different sets of questions, Stacy said, those clients can join the collective and field their diversity requests through Diversity Lab.

As the director of professional development at Arnold & Porter in the mid-2000s, Stacy said the firm received over 200 diversity metric requests every year.

“Fast forward 10 years later, my guess is it’s tripled. Big firms who work with hundreds and hundreds of clients are filling out hundreds and hundreds of diversity requests, and that’s good, because then the practice group leaders and firm management and others see that their clients care about diversity,” Stacy said. “But the problem is, then, we have humans who are just working on filling out surveys when their time could be better spent on helping to make a more inclusive environment.”

Some in the industry are skeptical that questionnaires, no matter how much improved, will be enough. Coca-Cola General Counsel Bradley Gayton recently launched a new set of diversity guidelines that goes beyond surveys and demographics, including a 30% fee penalty for noncomplying firms.

“Surveys have been done for the last two decades and haven’t produced the results we want. The idea that I would continue to do the same thing that we’ve been doing for the last few decades, just do more of it and hope to get different results, doesn’t resonate with me,” he said.

(Adds NALP data about women lawyers in partnership roles in paragraph 10.)

To contact the reporter on this story: Ruiqi Chen in Washington, D.C. at rchen@bloombergindustry.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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