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On Diversity, It's Shape Up, or Ship Out

Accenture is set to test outside counsel over diversity gains

Having already grilled its outside counsel about their diversity once, Accenture is preparing to test them again. And this time the consulting giant is threatening to dump law firms that don't come up with the right answers.

Two years ago, New York-based Accenture asked the 40 firms on its preferred provider list to fill out a lengthy diversity questionnaire. The company asked for the number of ethnic minorities, gays and lesbians, and women at the entire firm, on management committees, among student and lateral recruits, and among those attorneys working on Accenture matters.

Each firm also had to describe how well it was retaining its minority lawyers, whether it had any recruiting and retention programs for them, and how it measured the effectiveness of those programs.

In 2007, Accenture will resurvey its outside counsel to see how much they've improved. Firms that haven't made changes to improve their diversity will be dropped from the company's roster.

"We want to know if these people we are spending money on are dealing with diversity," said Accenture in-house lawyer Paul Chadha. "And we want them to know that 'if you don't improve, we won't work with you.' "

NO IDLE THREATS

Accenture isn't making idle threats, either. When one law firm refused to fill out the 2005 survey, citing its length, the company stopped using the firm.

Accenture declined to name the objector, but says it was otherwise happy with the firm's work.

(The survey was long -- seven pages. By contrast, the questionnaire that Wal-Mart Stores Inc., asked its outside counsel to fill out in its well-publicized 2005 diversity initiative was only a single page.)

The inspiration for Accenture's initiative came from the diversity manifesto that Sara Lee Corp. General Counsel Roderick Palmore started circulating two years ago.

Accenture General Counsel Douglas Scrivner signed the statement, which calls on companies to scrutinize the diversity of their law firms and drop those that don't measure up, in April 2005.

After collecting data through autumn 2005, Accenture analyzed the results and ranked its top 15 firms (as determined by billings) on a green, yellow and red scale. No firm received a green -- "green means they're done," said Stern.

In meetings with the 15 firms during the course of 2006, Accenture discussed how well each had done in relation to the others. Each firm also developed an individual action plan in consultation with the company.

As a result of the meetings, many of Accenture's firms are busily beefing up their diversity efforts. DLA Piper came in third on the company's rankings. According to David Mendelsohn, Accenture's relationship partner at DLA, his firm has developed an initiative to involve its minority associates in more in-house legal work. "Part of the desire is to involve and encourage diversity associates in the work as much as possible," says Mendelsohn.

So how well would Accenture do on its own survey? The company won't release its diversity statistics. But referring to the ratings that it gave to its outside counsel, Stern says, "We wouldn't give ourselves a green." He adds, "We have good percentages of women at all levels of the legal group, but we have to work on getting more minorities in the senior ranks."

In order to bring more diversity into its law department, Accenture has developed orientation and mentoring programs for its minority and women recruits. The orientation program allows new hires to meet with management-level attorneys as well as representatives from each practice area. The mentoring program pairs rookies with older attorneys not in their reporting line, who offer advice and career guidance. "When we bring in someone with two years of experience, and think that, five years from now, [we] could see them as an executive ... we give them training at every opportunity," says Stern.

And just as Accenture's outside firms will pay a price if they don't pay enough attention to diversity, so will at least one of its in-house lawyers. "I have several diversity goals," Stern says, "and my salary and rewards are based on my goals."

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