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Five Ways In-House Counsel Can Boost Outside Counsel Diversity

June 14, 2021, 8:01 AM

Collective efforts such as the ABA’s Model Diversity Survey and the 2019 letter signed by more than 150 general counsel have proven that legal departments care about outside counsel diversity. But despite these efforts and other similar pledges, the power and influence within elite law firms is primarily in the hands of heterosexual, cisgender, able-bodied, white men. And they consistently garner higher billable hours and origination credit—the dominating factors that determine compensation.

With such strong messaging from clients for diversity, why does the equity partnership of AmLaw 200 firms persistently hover around 80% male? And how is it possible that the equity partnership consists of 91% White lawyers?

This is especially disheartening knowing that the graduating classes of law schools have been over 50% women and roughly 30% racial and ethnic minorities for decades. The data proves it—it’s not primarily a pipeline issue. Diverse junior lawyers are not progressing at the same pace into leadership in firms as their majority counterparts.

To truly effect change, in-house counsel must close the gap between demanding diversity and taking action at the individual level to support advancement of underrepresented lawyers within firms. In that spirit, we challenge in-house counsel who wish to wield their power more effectively to prioritize and take five actions to impact the power structure within firms.

1. Origination & Compensation: Require that Diverse Partners Receive ‘Credit’

Whether you engage outside counsel by matter or leverage preferred providers, you must dictate “who gets credit” as part of the hiring decision. Most law firms award credit towards their compensation—often called origination, engagement, supervising, or billing credit—for each relationship and matter. When you allow firms to pitch for new matters or your panel, require that at least one diverse partner leading the work receives equitable “credit.”

Ask hard questions to understand how firms reward their lawyers for bringing in new business. Persist until you know that the diverse lawyer’s advancement and compensation will be positively impacted as a result of your work.

Remember that the first point of contact at a firm for a relationship or matter often gets the credit. If your legal operations or procurement experts lead the process, help them manage who is the first point of contact to ensure credit is appropriately awarded.

2. Diverse Teams: Require a Diverse Pipeline of Lawyers

Require outside counsel to staff each new matter with at least 50% underrepresented lawyers. You, the client, have the right to ask for diverse teams and understand succession plans for future teams.

To ensure diverse teams work on your matters now and in future, the firm must build a pipeline of diverse lawyers with the skills and institutional knowledge to support your needs. If the relationship partner doesn’t proactively talk with you about their pipeline, ask. Your firms should provide a business continuity plan in line with your organizational and departmental values, similar to other key suppliers to your business.

3. Quality Work: Monitor the Type of Work Diverse Lawyers Do

Ask your outside counsel to demonstrate that the diverse lawyers on your matters have equal access to high-level work and direct interactions with in-house lawyers. Direct access to clients and career-enhancing work is essential to advancement within a firm.

It is also a key indicator of whether a lawyer will stay at the firm. When firm lawyers feel connected to their clients and know they are developing critical skills to advance, they stay, giving them the experience and knowledge to become your leaders in the future.

4. Advocacy: Be a Vocal Ally for the Diverse Lawyers Working on Your Matters

When a diverse lawyer does a good job for you, send a note to someone influential at the firm who can influence that lawyer’s compensation and advancement. If you’re not sure who that is, ask. Regardless of your level within the legal department, a note from a client to a firm leader makes a significant impact.

In your note, be clear about what the lawyer did well for you. And if you’d like them to start or continue leading or working on your matters, say that. Your advocacy inside the firm on behalf of a diverse lawyer has the potential to exponentially advance their career.

5. Referrals: Introduce Diverse Outside Counsel to Other In-House Counsel

When a diverse lawyer does a good job for you, refer them to other counsel at your organization and other companies. Few firm lawyers advance at their firms with only one client. Your role in helping lawyers obtain clients and raising their visibility cannot be overstated. And when you do refer counsel to someone else, send them this article to continue the cycle.

Institutionalizing Individual Actions for a Bigger Impact

Each of these five actions only takes a few minutes of your time, but can have a lifetime impact on a diverse lawyer’s career. If you want to institutionalize these actions, consider joining the Diversity Dividends Collective facilitated by the Move the Needle Fund. In collaboration with 15 legal departments already signed on, you can have an exponential impact.

Each action has the potential to quickly and meaningfully accelerate a diverse lawyer’s career. Done together and by hundreds of in-house counsel, as the Diversity Dividends Collective intends, they will lead to real progress to close the power and economic gaps in law firms to create a significantly more inclusive and diverse legal profession.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Leila Hock is the director of legal department partnerships at Diversity Lab. She works with legal departments to boost diversity and inclusion and effectively partner with their law firms to increase the diversity of outside counsel teams.

Caren Ulrich Stacy is the CEO at Diversity Lab. She works with more than a dozen talent experts, data scientists, and technologists to create and experiment with innovative initiatives that cultivate diversity, equity, and inclusion in law schools through the leadership ranks of top law firms and legal departments.

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