LEGAL INSIGHTS

Updates and advice for attorneys and law departments.

Law Departments Lead Industry DEI Efforts

The COVID-19 era, beginning in January 2020, will be seen as a turning point for much of American society, as reactions to the disease drove political divides that were further inflamed by revelations of longstanding racial and social inequities. The impacts of these phenomena are felt everywhere, including in the nation’s corporate law departments, many of which may not have had the diverse in-house staffing that some of their internal clients then desired. Legal industry experts are now looking at law departments as a driver of increased diversity in the legal profession to provide a complement to other corporate efforts in this area and be an active model to their outside law firms.

Asserting Intention

The ongoing turbulence around racial and social disparities appears to be opening enterprise leadership’s eyes to the diversity lags in the legal profession that have gone on for decades. Some global legal leaders are taking affirmative steps to address those imbalances.

In early 2020, before COVID arrived, Switzerland-based pharmaceutical giant Novartis declared that corporate legal departments have ‘ … an incredibly important role to play in …’ accelerating the legal profession’s progress toward diversity and inclusion. To do so, the conglomerate adopted a policy that requires its outside counsel firms to demonstrably commit significant billable hour time to diverse associates and partners, including women, people of color, and those in the LGBTQ+ community. One year later (February 2021), the company reported its satisfaction with the new standards and that its ‘preferred partner firms’ had raised new-hires of diverse partners and associates to 49% and 68%, respectively.

Also in 2021, NatWest, a U.K. bank, and Sainsbury’s, a U.K. retail conglomerate, both published their similarly advanced DEI initiatives, which included increasing diversity metrics both at home and across their international profile. In addition, Sainsbury’s stepped further out in its diversity efforts by becoming a founding member of the globally focused Diversity in Retail group, an association of companies that aims to share best DEI practices and bestow positive impacts on one million employees by 2025.

The cumulative impact of these DEI efforts has been to underscore an increasingly accepted position: corporations with law departments have an asset base that benefits from the inclusion of a diverse scope of opinions and experiences. Accordingly, their law department and its legal support vendors should reflect the breadth, depth, and scope of those assets and clientele.

And Inclusion

Research suggests, however, that it’s not enough for a company to simply post an informed DEI hiring policy to retain existing clients and attract new ones. Building and maintaining a culturally diverse workforce of law department associates is becoming increasingly important to consumers. A successful DEI project embeds hiring, retention, and promotion practices into its standard ‘course of business’ to enhance the ‘inclusion’ of their worker’s cultural and personal attributes within the overarching corporate culture. As a result, the worker feels accepted and valued by their employer throughout the course of their employment, regardless of their demographic. By providing a welcoming and inclusive culture for all employees, both the company and the workers’ communities benefit from the effort, which further enhances the company’s standing as a valued community member.

It’s essential, too, to elevate the evolved DEI strategy beyond aspiration and into a fundamental business imperative so that it lasts beyond leadership and industry changes, according to Novartis’s General Counsel, Shannon Klinger. The corporate culture should both reward the diversity of its workforce while also ensuring that those morals and standards are embedded in every workflow and department. Corporations that actively and intentionally reward their diverse associates with promotions, financial bonuses, and increased leadership opportunities are building a more robust enterprise as well as their capacity to attract the attention of a broader scope of potential clientele.

While Moving Toward Action

For law departments that have not yet fully explored or developed their DEI strategy, industry leaders have analyzed ‘before’ and ‘after’ scenarios to identify affirmative steps they can take to build a more diverse population within their organization. In 2021, Bloomberg took on clarifying the Legal DEI development challenge by developing a DEI framework. The strategy breaks DEI initiatives into six pillars, each of which provides a lens into how law departments and firms can incorporate DEI principles into those activities:

• Firm/Department Demographics;
• Leadership and Talent Pipeline;
• Recruitment and Retention;
• Business Innovation and Strategy;
• Marketing; and
• Diversity & Inclusion in the Community.

The framework uses professional standards from the American Bar Association and other organizations to explain and guide DEI efforts that reduce barriers and increase opportunities to develop a more diverse enterprise.

Other industry leaders also offer insights for law department leaders looking to improve both their internal DEI success as well as those of their vendor attorney firms:

• Assess the organization and its contractors for the specific diversity situations that currently exist.
• Review or develop a DEI policy that encompasses hiring, assignments, promotions, and responsibilities and tracks those events through a diversity-aware lens.
• Build DEI metrics into and as Key Performance Indicators (KPIs) for both internal and vendor activities.
• Appoint an in-house partner or leader to drive the DEI initiative across the organization, including the businesses and service providers with which it works.

The COVID era has already changed how the world works. It also revealed how much global progress had been stalled by inappropriate and biased business practices, including discrimination based on gender, ethnicity, or sexual identity. Law departments have a unique opportunity to ensure that internal clients have appropriate representation by diversifying their staff and requiring comparable diverse staffing activities from their legal support vendors; including outside counsel, alternative legal service providers, and legal staffing firms.

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