Market News

‘It’s a Real Business Issue’: How Clients Are Making Firms Embrace Diversity Goals

By Dan Clark for Counsel

Law firms have a long way to go in seeing the results of their diversity, equity and inclusion efforts, but many are devoting more resources to those initiatives. Clients remain a driving force behind that progress, law firm leaders and in-house leaders said Thursday during a panel discussion hosted by the New York State Bar Association.

Firm leaders from Steptoe & Washington, Baker McKenzie and DLA Piper spoke on the panel, discussing the critical role in-house counsel have played in stepping up their own diversity and inclusion efforts.

A number of in-house leaders, who said they have been applying this pressure for some time, thought there could be more. According to a recent survey by the Association of Corporate Counsel and Major, Lindsey & Africa, only 18% of responding legal departments reported tracking diversity metrics at their outside firms. Of those legal departments with $10 billion in annual revenue, 53% reported tracking outside counsel diversity metrics.

But that group is likely to grow. A new program from Diversity Lab, announced last month, aims to create a standard framework for legal departments to evaluate and reward diversity in their outside counsel.

“By putting these criteria on us and putting pressure on us to do this, it showed us it’s a real business issue. Even if you don’t have a personal passion for this and are just focused on the business side, there is a business element to this, too,” Scott Brandman, a partner at Baker McKenzie in New York, said during Thursday’s discussion.

Jennifer Lagunas, vice president of corporate legal at AbbVie in Chicago, spoke about the legal diversity and inclusion program, which started there in 2018. The legal department met with each of its top spend firms (those firms account for approximately 80% of the company’s legal spend) and set goals for diversity of the teams working on AbbVie matters.

AbbVie set three goals for its firms: having equal male and female partners on AbbVie matters; doubling the number of minority partner hours on matters; and increasing total hours billed by  all underrepresented attorney populations at all levels to be at least 50%. That includes ethnicity, race, gender, LGBTQ+ and attorneys with disabilities.

Lagunas said AbbVie saw law firm progress in its first year of the five-year program. The company and its firms met the five-year goals in the second year of the program.

Without sharing specifics, Phillip Rollock, chief legal officer of the Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, or TIAA, in New York, said his department continuously sends reminders to its law firms about staffing matters with diverse attorneys.

“We are selecting our panel participants based on … their commitment to diversity and inclusion,” Rollock said.

TIAA’s outside counsel guidelines encourage law firms to staff matters with diverse teams of lawyers. Additionally, TIAA’s legal department monitors and tracks law firm staffing.

Lagunas noted law firms still have a long way to go. At AbbVie, the legal department is interested in learning more about succession planning at the relationship partner level and how origination credit is awarded.

Taylor noted that law firms should be thinking about how to present origination credit information to their clients.

“That is something that is becoming more and more common. Clients are asking for it and getting it,” Taylor said.

Meanwhile, he noted, clients are also asking their law firms for help in anti-bias and anti-racist training for their C-suite and in-house departments. Because they have hired knowledgeable diversity professionals, many law firms can provide that training not just from the lawyers’ perspective.

“Law firms often have the best talent in the chief diversity officer position that can provide them that,” Taylor said.