As numerous outlets have reported, law is the least diverse profession in the United States. Indeed, the problem is even more glaring at the highest levels of the profession. Women account for only 17 percent of equity partners at firms, and only seven of the nation’s 100 largest firms have a woman as chairman or managing partner. Likewise, minorities make up fewer than 7 percent of law firm partners and 9 percent of general counsels of large corporations.
In response, Corporate Legal Departments are increasingly monitoring the diversity of their outside law firms in order to ensure that their firms are making sufficient efforts to promote diversity in their ranks. For example, Microsoft goes as far as paying a bonus of up to 2% of all legal fees to firms that increase diversity in key leadership aspects, including firm leadership and as relationship partners on Microsoft’s matters.
Recently, HP announced a new policy that takes this approach one step further. In a letter to its outside firms, HP’s Chief Legal Officer Kim Rivera explained that “we can withhold up to 10% of all amounts invoiced by law firms that do not meet or exceed our minimal diverse staffing requirements.”
Interestingly, HP’s new policy does not measure diversity within the outside law firm as a whole. Rather, it requires that diverse attorneys actually work a specified amount on HP matters or are the relationship partner for HP. This approach holds firms accountable and requires that they staff diverse attorneys on a client’s matters, rather than simply allowing them to self-report diversity metrics about the firm as a whole. As a result, it is likely to lead to increased diversity in the firm and the profession as a whole. In fact, Susan Hackett, founder of a legal consultancy for corporate law departments, believes HP’s mandate could become more common.
At Bodhala, we utilize data analytics and machine learning to show our clients which firms are staffing diverse attorneys on their matters and which are not. Additionally, we provide clients with a tool to seamlessly report diversity metrics to their outside firms. We have found that this approach results in increased diversity, as law firms know they are being monitored and that the client is committed to diversity.