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MetLife GC: Law Firms Still Failing on Diversity

May 20, 2015, 4:56 PM

The top of the socioeconomic ladder is populated by a strange mix of business leaders, celebrities, singers and actors, so it’s not unusual for C-suite executives to end up at the same parties or even neighbors with this crowd. 

In 2012, Ricardo Anzaldua joined MetLife as  Executive Vice President and General Counsel ,and last year Anzaldua purchased a $5 millionManhattan townhouseonce owned by R&B starBabyface.

The real estate blog Curbed reported on the purchase, and seized on what it presumably thought was a telling comparison between Babyface and Anzaldua, who Curbed joked is in a “much more boring profession” —according to the blog, Anzaldua was planning to use Babyface’s old recording studio as a wine cellar.

But Curbed apparently made a mistake. “I didn’t take the recording studio out,” Anzaldua said. “It had already been turned into a wine cellar by the time I bought the house.”

In addition to setting the record straight on his interior design choices, Anzaldua recently spoke with Big Law Business about the continued failure of law firms to promote diverse talent, MetLife’s challenge to its designation as a SIFI, and his favorite music (spoiler alert: he isn’t a Babyface fan). ReadPart I here.

Part II Excerpts:

Seeing this pattern repeated over and over again, I just have to conclude that there’s something structural [at Cleary Gottlieb] that makes it easier for the white males to make the connections than it is for diverse lawyers.

We’re really in the early stages of this program, but I anticipate requiring my outside counsel to put in place a similar kind of apparatus to make their senior people accountable for making sure the diverse talent is getting the necessary opportunity.

But we have said that, as we evaluate the burdens of being regulated as a SIFI, all the options will be on the table.

A lawyer needs leadership competencies—the ability to communicate the ability to project confidence and inspire confidence, the ability to communicate clearly.

Below is an edited transcript of the final installment of our two-part series with Anzaldua.

Big Law Business: In practical terms, what’s the best way for firms to promote diversity?

Anzaldua: The best way to tackle this problem is head on. I’m working hard on developing a strategy for grappling with the issue of retention and promotion, which includes of a concept I call “sponsorship.”

That’s not my word—I think it’s in pretty common currency now. But the idea is you need to make the senior people in the organization—people with authority and responsibility and power—accountable for the retention and promotion of the diverse talent within the organization.

The way talent—and we’re talking in part about legal talent—is typically promoted through an organization is through a connection between the junior talent and people who are more senior in the organization.

[caption id="attachment_2241" align="alignleft” width="350"][Image “Courtesy of MetLife” (src=https://bol.bna.com/wp-content/uploads/2015/05/Anzaldua1.png)]Courtesy of MetLife[/caption]

I’ve been involved in diversity recruitment and diversity promotion since my time at Cleary Gottlieb , and my experience is that, at least since the mid-1990s, big corporate institutions have had the capacity to recruit incoming classes of lawyers that are really quite diverse.

Cleary Gottlieb, for example, has been recruiting classes that are majority women since the mid-1990s. They’ve had significant populations of people of color in that same time. I remember classes of incoming associates which were as many as 20 per cent, and more, people of color.

But then you go through and look at the classes eight years later, and you look at the candidates for partnership, and they’re once again predominantly white males.

Having been at Cleary Gottlieb, and knowing it’s not a racist institution, knowing that the senior people in the organization are not prejudiced, not biased, but seeing this pattern repeated over and over again, I just have to conclude that there’s something structural in the organization that makes it easier for the white males to make the connections than it is for diverse lawyers.

My answer to that problem is to make the senior people in the organization accountable for making sure the diverse talent also gets those connections, opportunities, and experiences necessary to promotion.

We’re advancing that paradigm at MetLife. The senior people in the organization identify a pool of high potential diverse talent, and the senior professionals in my department each have the responsibility for identifying at least one person from that pool of diverse talent to sponsor and be accountable for.

I’m not saying that it’s anybody’s responsibility other than the individual to take care of his or her own career. But we need to make sure we’ve facilitated access to resources, identification of a career plan, connections into positions of influence, and the connections to experiences and expertise that are necessary to advance.

We make our senior people accountable for making sure that the diverse talent has access to those diverse resources.

Big Law Business: Is that a demand you’re prepared to make on firms?

Anzaldua: We already did that even before I came to MetLife. We already told outside counsel they needed to put diverse teams in place.

I’m now adding to that, prospectively. We’re really in the early stages of this program, but I anticipate requiring my outside counsel to put in place a similar kind of apparatus to make their senior people accountable for making sure the diverse talent is getting the necessary opportunity.

Big Law Business: GE recently announced it was winding down its banking operations, due to the regulatory burden of being designated a SIFI. Some have speculated a restructuring may be on the horizon for MetLife as well. Care to comment?

Anzaldua: Right now, we don’t know very much about what the regulatory environment is going to hold for us. As you probably know, the Fed has not yet promulgated capital rules for insurance company SIFIs, or the standards for enhanced prudential oversight that are going to apply to us.

So we don’t really know what the burden is going to be. Our Federal Reserve supervisors have only recently started their communications with us, so we’ll have to see how things evolve over time.

But we have said that, as we evaluate the burdens of being regulated as a SIFI, all the options will be on the table. We operate our company as fiduciaries for our shareholders, and we have to take whatever action is in the best interest of the shareholder.

I should also mention that, unlike GE and the other non-bank SIFIs, we have appealed our designation as a SIFI. We continue to firmly believe we’re not systemically important, and we are vigorously making that case in the DC District Court.

We expect the case to be playing out over the course of the next several months. We have a briefing schedule that will be wrapping up towards the end of August, and then after that the court will set whatever calendar it wants for an oral argument, if appropriate.

Ultimately they’ll decide whether the SIFI designation is going to stand.

Big Law Business: How optimistic are you?

Anzaldua: It’s very difficult to predict how a court case is going to come out, but we think we’ve put together a very strong case. The standard of review is high—we need to make the case that the determination by the FSOC was arbitrary and capricious.

That means we have to show the decision was made without a rational basis in fact. We’ve put together a record of 21,000 pages designed to show there was no rational basis in fact to conclude MetLife presents a systemic risk.

Big Law Business:  What firms are helping you with that case?

Anzaldua:  We’re being advised in the litigation by Gibson, Dunn & Crutcher .

Big Law Business: As the banking regulatory picture continues to clear up, is that an area where you’re relying heavily on outside counsel?

Anzaldua: At present, the issue of how we will deal with the regulations is so inchoate we haven’t engaged any outside counsel. We do have an internal team that’s watching the issue. Whether we engage outside counsel would depend on what kinds of proposals come forward from the Fed.

Big Law Business: Who’s someone who’s had an impact on you professionally?

Anzaldua: There are two lawyers who had a great deal to do with my becoming partner at Cleary Gottlieb. They were my sponsors when I was coming up as an associate in the firm— Ken Bachman and Jack Murphy  in the Washington office.

Big Law Business: What are the most important traits a lawyer can have?

Anzaldua: The first one is strong ethical values, which is really thesine qua nonfor an excellent lawyer. Intellectual rigor is a second one. A lawyer needs a dedication to finding the right answer to complex legal questions with precision and coherence.

Motivation is another one. A lawyer needs a significant amount of energy, and a desire to do right by the client and represent the client zealously.

And then a lawyer needs leadership competencies, the things I’ve talked about before—the ability to communicate the ability to project confidence and inspire confidence, the ability to communicate clearly.

Maybe the last one would be intellectual curiosity, the desire to know, not just the thing you’re talking about, but the ancillary issues—the things that occur to you as you’re thinking about a complex issue. A lawyer has to have the peripheral vision to see the related issues. That helps the lawyer be a creative thought partner for a client.

Big Law Business: You recently purchased a townhouse that was previously owned by Babyface. Were you aware he was a previous owner when you bought it?

I was. I actually Googled and saw that he had owned it previously, a couple of owners prior to me. It was a fun fact. I’m very interested in music myself, so it was kind of neat.

Big Law Business: Do you have a favorite Babyface song? What’s your favorite type of music?

Anzaldua: I’m not really a Babyface fan. My favorite music is probably old rock and roll. I also play the piano, some classical music and some rock and roll.

There is one thing that I want to make clear about the house, though. Babyface apparently had a recording studio in the basement, but I didn’t take the recording studio out. It had already been turned into a wine cellar by the time I bought the house.

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