Legal Departments Set a New Standard: Diversity & Inclusion in the Legal Industry

The legal industry has a diversity problem. In our 2^ndannual Diversity and Inclusion Report, Big Law Business reviews the current state of diversity and inclusion in Big Law.

Our reporting throughout 2017 has shown that the industry may be at a turning point, but that there is much progress to be made in order to make the legal profession an equitable and welcoming place for all lawyers regardless of their gender, race, ethnicity, sexual orientation, or disability status.

In 2017, some in-house counsel raised the bar for law firms by setting clear diversity expectations and threatening to pull business if they aren’t met. We expect this trend to continue in 2018.

One of the biggest stories of the year was clients using data to hold their outside counsel accountable to their diversity promises.

• In February,HP declaredit would begin withholding up to 10 percent of invoiced fees from law firms that don’t meet certain diversity criteria, and in April,Facebook announcedit would be requiring outside counsel to field teams with at least 33 percent women and ethnic minorities.

• Also in April, MetLife General Counsel Ricardo Anzalduasat down with 75 law firmsto help them create a formal plan to retain and promote diverse talent or risk losing MetLife’s business.

These accountability programs signal a shift to an analytical, data-driven approach to diversity and inclusion.

• Clients now have the tools to follow up on their pleas for diversity by tracking which attorneys are staffed on which matters, and which ones are given leadership opportunities.

• This granular approach can also help prevent tokenism, by which women or attorneys of color are staffed on matters to meet diversity quotas but aren’t given opportunities to grow, Big Law Businessreported.

2017 also saw the first signs that the American Bar Association’sResolution 113is having an effect.

• Passed in the summer of 2016, the resolution urged law firms and corporations to expand and create opportunities for diverse attorneys, leading to the creation of a “model diversity survey” that clients can use to assess the diversity of outside counsel teams.

• Dozens of companieshave signed onto the initiative, including Adobe, HP, JP Morgan & Chase Co., McDonald’s, Microsoft, PepsiCo, and Prudential.

Meredith Fuchs, Senior Vice President, Chief Counsel, Regulatory Advisory, Capital One

[caption id="attachment_62270" align="alignnone” width="975"][Image "" (src=https://biglawbusiness.com/wp-content/uploads/2017/12/Fuchs.png)] D&I Program Manager Drew Gulley from Bloomberg moderates the corporate counsel roundtable at Bloomberg Law’s 2017 Diversity Symposium with Meredith Fuchs, Chief Counsel at Capital One, Brian Brooks, General Counsel at Fannie Mae, and Karen McCain Borno, Associate General Counsel at Verizon.[/caption]

How does Capital One hold its outside counsel accountable?

We joined the ABA’s Resolution 113. The way it works is if you’ve joined into the resolution, you require law firms to submit metrics around diversity, and you have the in-house legal departments factor that into determining which firms to retain. We have received survey information from law firms we do business with, we’ve ranked them based on diversity, and we’ve informed them of the rankings and that we are considering diversity as a factor when making decisions to retain counsel. We’ve just started doing that this year and we’re going to see how that develops.

What else can in-house legal departments do to help push law firm diversity?

I think the [ABA] resolution helps, but you hear a lot of talk about diversity in the legal profession and it’s almost like it’s not concrete or granular enough. We need to settle on what the right metric is. Is it having diverse attorneys on our matters, is it diversity at the law firm overall, is it diversity in firm leadership, is it hiring law firms owned by attorneys from diverse backgrounds? There’s not really a consistent metric. I think it would be good for in-house departments to focus on which metrics they want to measure, because that would give law firms something to aim for.

Up Next: Law firms expanded diversity efforts.