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Diversity Scorecard
DIVERSITY SCORECARD 2008: Cleary, Wilson Sonsini on Top
Law firms inch toward greater diversity, reporting a range of initiatives from minority scholarships to affinity groups. But have they made progress in adding attorneys of color at all levels?
By
Emily Barker
The Minority Law Journal
May 01, 2008
That's the principle behind our latest rankings. Topping the charts is New York's Cleary Gottlieb Steen & Hamilton, a new winner, up from third place last year. Almost 27 percent of its attorneys belong to a minority group, an increase of more than four percentage points from our last survey. Palo Alto's Wilson Sonsini Goodrich & Rosati is number two for the second year in a row, with 25.3 percent lawyers of color. The top-ranked firm in 2006 and 2007, New York's Paul, Weiss, Rifkind, Wharton & Garrison, fell to number ten, with 22.1 percent minority lawyers, a three-percentage-point decrease. [NOTE: The full A to Z list of diversity scores is available here.]
During the past few years, however, we've started to wonder whether this approach to ranking firms is missing something fairly important. After all, it assumes that all lawyers of color are more or less equivalent from a diversity standpoint. We give firms the same amount of credit for having a first-year minority associate as for a senior minority partner. But a glance at the Scorecard shows you that, at most firms, minority lawyers are concentrated in the ranks of nonpartners, such as associates and of counsel.
Some of the most extreme examples are found at the top of the Scorecard. At New York's Cravath, Swaine & Moore (number six this year) and New York's (number 11), more than a fifth of each firm's lawyers are attorneys of color. Yet minority lawyers make up less than 4 percent of each firm's partnership. The low figures are even more striking when you look at actual numbers. Cravath has only two minority partners, Simpson Thacher only six. It's hard to argue that these firms really are among the most diverse in the country when their percentage of minority partners is well below the average of the entire Scorecard, 6.2 percent.
So this year, as we prepared the Diversity Scorecard, we spent some time pondering alternative ways of ranking firms, and we came up with a new formula. Why not measure a firm's diversity by combining its percentage of minority lawyers with its percentage of minority partners? That way, we can recognize a firm's progress in adding attorneys of color at all levels—but especially at the most senior levels.
For now, it's a thought experiment. But next year will be different. We'll start ranking firms using the new formula, looking at partnership diversity as well as overall diversity. How will your firm fare?
Taken as a whole, this year's Diversity Scorecard results show that firms continue to inch toward greater diversity. We sent the survey to 254 firms that are among The Am Law 200 or The NLJ 250 or both—the largest and richest law firms in the country. A total of 211 firms responded, compared to 209 in 2007.
What we found was that the percentage of minority attorneys at all firms increased from 12.4 percent in 2006 to 13.4 percent in 2007. That rate of increase—about one percentage point per year—has been steady for the past three years. The proportion of minority partners—including both equity and nonequity partners—edged up from 5.7 percent to 6.2 percent. (As usual, we asked firms to give us statistics as of September 30 of the previous year—in this case, September 30, 2007.)
Asian Americans and Hispanics both made gains, now accounting for 6.1 percent and 3.1 percent of all lawyers in the firms surveyed, respectively. The proportion of African American lawyers, though, remained fixed at 3.6 percent, the same as it was last year.
Encouragingly, we found that large firms are promoting more minority associates to partner. That's a key metric: Making more partners of color—as opposing to hiring laterally—is the most effective way for firms to increase the pool of minority partners for the long term. The percentage of minority lawyers among new partners saw an uptick from 11 percent to 13.3 percent—a total of 279 partners—with the biggest increase among Hispanic lawyers. (In 2007 3.4 percent of new partners were Hispanic, up from 2.5 percent the year before.) Overall, about two-thirds of the firms surveyed promoted at least one minority lawyer to partner. However, the racial distribution of new partners remains relatively skewed: Almost half were Asian American. Black lawyers made up about a quarter of new partners, and Hispanic lawyers another quarter.
Our methodology this year includes a few minor changes. As always, we were most interested in the diversity of firms' American lawyers. In the past, we asked for figures on the number of minority attorneys who are U.S. citizens, but many firms have told us that this was burdensome, so this year we began asking simply for statistics on the number of minority attorneys working in a firm's U.S. offices. As a result, firms that have a significant presence abroad may get a slight boost in their minority numbers if they have lawyers of color from overseas working in the firm's U.S. offices.
Likewise, if a firm has minority U.S. attorneys stationed in foreign offices, its minority head count would drop slightly. For most firms, however, the change should be negligible.
For the first time, we asked firms to describe their diversity efforts. Half of all firms surveyed said they employed a full-time diversity director. (Among the top 20 firms on the Scorecard, the proportion was 65 percent.) Firms reported a range of diversity-related initiatives, including minority scholarships, affinity groups, expanded recruiting, retreats and workshops for minority lawyers, and improved coaching and mentoring for all associates. In one of the more intriguing programs, Finnegan, Henderson, Farabow, Garrett & Dunner (number 24 on the Scorecard), a Washington, D.C., intellectual property firm, said that it sends lawyers to teach a patent law course at Howard University in hopes of expanding the number of minority candidates who have both law and science degrees. Washington's Dickstein Shapiro (number 72) said that it had found tying partner compensation to diversity efforts to be "highly effective."
Two firms reported that they had just begun observing Martin Luther King Day. It's not a bad start. Perhaps now they can pick up the pace a little.
Once we'd collected this year's Diversity Scorecard data, we began working on a new formula for ranking firms. We wanted to build on our old measure-the overall percentage of minority attorneys-while recognizing the firms with strong minority representation in their partnerships. We also considered giving extra credit to firms for making new minority partners-but in the end, in the interest of clarity, we decided to stick with a simpler formula: a firm's percentage of minority lawyers plus its percentage of minority partners. The practical effect: In order for a firm to do well on the Scorecard in the future, it won't be enough simply to have a high percentage of minority associates. The firm must also have a high percentage of minority partners.
Applying that formula to the data from this year's Scorecard, we calculated new, hypothetical rankings. Interestingly, the very top of this chart doesn't look that different from the top of our current one. Wilson Sonsini would climb to number one. Cleary would drop to fourth. Seventeen of the top 20 firms would be the same in both charts. That's because many of the firms that have a lot of minority attorneys, period, have also done a relatively good job of integrating their partnerships. Three firms that just missed the top 20 under the old ranking would have enough minority partners to get there under the new formula: Littler Mendelson (10.5 percent minority partners), Howrey (10.3 percent minority partners); and Kenyon & Kenyon (10.2 percent minority partners). They would take the place of three firms with proportionately fewer minority partners-Debevoise & Plimpton (6.1 percent minority partners), Simpson Thacher (3.9 percent minority partners), and Cravath (2.3 percent minority partners)-that dropped between 11 and 32 places in the rankings.
The bottom of the new chart did not show a lot of change, either. Firms with few minority attorneys in general tend not to have many partners of color-so their scores would remain low. But in the middle, many firms would trade positions. The biggest winners would be Irell & Manella (up 55 places to number 23); Akerman Senterfitt (up 42 places to number 31); and Shook, Hardy & Bacon (up 60 places to number 50). All three firms are average or below average in their overall diversity, but make up for it with far-better-than-average minority partner percentages.
For firms that want to move up in the rankings, we think the new formula will be good news, because it gives them an additional chance to improve their scores. Most firms have many more nonpartners than partners, so the addition of a few minority lawyers at the partnership level can have a big effect on percentages. Previously, if a firm promoted a minority associate to partner, its overall score didn't change. Now, at a 100-partner firm, a single newly promoted partner of color means an additional point. Or take the case of a lateral minority partner: If a firm with 400 lawyers, including 100 partners, hires one attorney of color, its overall percentage of minority lawyers will rise by 0.25 percent. If that lawyer is a partner, the percentage of minority partners rises 1 percent. Total gain under our new ranking system: 1.25 points. Firms can still get credit for adding more lawyers of color at all levels-but they'll get even more credit for adding them at more senior levels.
The new formula for our Diversity Scorecard rankings won't be official until next year-and may be subject to further tweaks. We welcome your suggestions; please feel free to send comments to ebarker@alm.com. And in the meantime, this might be a good year to make a few more minority partners.
Diversity Scorecard 2008: The A to Z List is available here.
