“Diversity is a business imperative.” Google’s search engine returns more than 1,500 hits for that phrase. It appears on the Web sites of corporations, universities, business journals, professional associations and news outlets. CEOs, corporate spokespeople and even general counsel spout it like it’s a centuries-old axiomatic truth. But few seem to know what that phrase really means.

In the legal department of the world’s largest pharmaceutical company, New York-based Pfizer Inc., diversity gets a lot more than the typical lip service. Over the past two years under the leadership of General Counsel Jeff Kindler, Pfizer’s legal division has implemented a broad-based diversity initiative that promotes diversity in recruiting and hiring practices, aids in the career development and retention of women and minority attorneys, demands progress toward diversity among outside counsel, and even attempts to diversify the law student population.

It would take a major discrimination law suit, or at least the threat of one, to motivate most overtaxed legal departments to undertake the expense and work of implementing such a program. But that wasn’t the case for Pfizer. Everyone in the department credits Kindler as the motivating force who put this idea on the table and set it in motion–not out of fear of discrimination suits down the line, but in large part because he prefers working in a diverse environment.

“I’ve learned in every organization I’ve worked in, the quality and effectiveness of the work, as well as the fun of the work environment is dramatically enhanced by having a diverse work force,” he says.

Pfizer’s efforts seem to be paying off. In recognition of its comprehensive program, the Minority Corporate Counsel Association (MCCA) named the company a 2004 “Employer of Choice” for the Northeast Region. The award is no small honor–the MCCA evaluates all aspects of a legal department’s commitment to diversity from demographics and internal programs to its requirements of outside counsel and the business world’s view of the company’s attitude toward diversity. Pfizer excelled in every category.

“Pfizer is really, to us, significant among the employer of choice winners,” says Veta Richardson, executive director of the MCCA. “At all levels where a company could exert influence, Pfizer is exerting that influence. That’s what makes it a leader.”

Inside Edge

When Kindler took over the legal department in 2001 after serving in various legal and business roles at McDonald’s Corp. since 1996, one of the first things he did was turn to Assistant General Counsel Carol Casazza Herman, who has been with Pfizer since 1989, for help looking at the demographics and culture of the department.

“I start with the basic premise in life that the more perspectives and ways of thinking that are brought to bear on a problem, the better the solution,” Kindler says. “When I came to Pfizer I appreciated the fact that our legal division has a large group of talented individuals, many of them from different backgrounds. But I also thought we had substantial opportunities to improve the diversity of the department.”

Casazza Herman then spent three months talking to consultants and diversity experts about what would go into a diversity program. But nothing she encountered was as broad-based or comprehensive as what she and Kindler envisioned for Pfizer.

Together, they decided the department needed a steering committee to advance diversity programs in five areas: recruiting and hiring, development, retention, supplier diversity, and communications. Casazza Herman chairs the committee, and 45 people from all levels within the organization voluntarily serve on five subcommittees organized around the five areas.

The chairs of each of the subcommittees, two at-large members and Casazza Herman serve as the executive board, which meets monthly to discuss progress and set large-scale goals. The five subcommittees meet more frequently to develop and implement the actual programs and practices that will make those goals possible.

Structuring the committee in this way provided two key benefits. The first is that the department as a whole is more committed to the project because individuals are personally engaged in developing and implementing the programs.

“This is a very homegrown effort, not a mandate from a faceless HR organization,” Casazza Herman says. “The fact that I’m someone who’s already part of the legal department management line gave credibility to the effort that wouldn’t exist if we brought in someone to do diversity

100 percent of the time.”

The second benefit is that the program affords individuals at lower levels within the legal department the chance to work on high-profile departmentwide projects.

“We have a very large legal department (400 attorneys and 1,200 total staff worldwide), and as a result it isn’t always easy to find opportunities to exercise visible leadership across the division,” Kindler says. “What participation in something like this does is offer people at all levels an opportunity to connect with each other, get some exposure to more senior leaders and make an impact on the whole division.”

The program also has given the legal department a positive chance to work with businesspeople outside of the legal context. Often the only time lawyers speak to their clients is when a crisis arises. The diversity initiative lets lawyers talk to the various business groups about how they’re addressing diversity and better align their goals with corporatewide goals.

“A company as large as Pfizer has a lot of independent business interests, and they also have diversity activities,” Casazza Herman says. “What we’ve seen is that this is another way for us to interact with our clients and align our activities with what they’re thinking about.”

Candid Communication

Even if a GC succeeds in getting the department as a whole to understand diversity is a top priority, not everyone might like what that means. Kindler stresses that willingness to talk about tough issues is key to getting a diversity initiative off the ground.

“If you talk about diversity as if it’s obvious and easy and don’t come to grips with the fact that there are people who may feel threatened by it, you’ll never be successful,” he says. “People at Pfizer don’t hesitate to ask hard questions such as, ‘What does this mean for white men?’ People are thinking about those questions–no doubt about it. So you have to bring them to the surface, then discuss and address them.”

Kindler has no qualms about discussing those issues. At a recent two-day global meeting for Pfizer’s entire legal department, Kindler devoted an entire half-day to diversity issues. And it wasn’t just a standard corporate presentation–members of the department presented a variety of views on contentious issues such as affirmative action.

“When you hear leaders talking about diversity like it’s a real business issue, with implications and specifics you need to deal with, then people know you’re serious,” Kindler says.

Many experts agree that a common mistake companies make is assuming that diversity is a universal ideal that everyone already understands and appreciates. That may not be the case, so GCs shouldn’t hesitate to explain why diversity is necessary to business in general, and their company specifically.

“Many organizations want to believe that without having to think or do very much, there’s a meritocracy. If you’re good, you’re going to rise to the top and succeed,” Richardson says. “Within all organizations there are in-group and out-group dynamics that influence–just as much as an individual’s talents–who succeeds and who doesn’t. When people go along with the blind belief that if you’re talented you’ll succeed … that to me is a worst practice.”

For Pfizer, the need for a diverse and inclusive environment is tied to the line of business in which they work.

“We’re in an industry and a company that operates in an extraordinarily pressured environment where our products are under intense scrutiny from regulators, the public and other stakeholders,” Casazza Herman says. “We don’t have the luxury of overlooking the most talented people. If we don’t create a culture where different types of people can thrive, we’re going to lose out. So diversity is directly connected to our ability to be ready to meet these challenges.”

In The Pipeline

Getting the current members of the department to buy into a diversity program isn’t the end of the battle. Even with 45 members of Pfizer’s department enthusiastically participating on the diversity steering committee, the company still had difficulty finding a diverse slate of candidates to interview for open positions. Many legal departments–especially those that need lawyers with technical expertise–face this problem.

The cause is a lack of diversity in the pool of potential candidates. According to the ABA, in 2002 (the latest year for which it has data) only 20 percent of enrolled law students were minorities. That figure has been increasing at a snail’s pace–between 1992 and 2002, minority enrollment only increased by 3 percent. The problem is especially acute when it comes to fields such as intellectual property law, where the population of students is still overwhelmingly male and white. This means the population of law firm attorneys practicing IP law lacks diversity, as does the pool of people who have the expertise and experience to go in-house. The same can be said of many other fields.

“Many of the firms at the top of the business defense bar are still at or below

4 percent minority partners,” says Gregory Winfree, senior litigation counsel at Phelps Dodge Corp., and co-founder of Charting Your Own Course (CYOC), a professional networking organization for minority in-house attorneys. “When the law firms have a shortage–and certainly they do among people who are poised to move in-house–there is going to be a corresponding shortage of people who are able to take the available in-house positions.”

Rather than write that off as a problem they couldn’t be held accountable for, Pfizer turned to the diversity committee’s recruiting and hiring workgroup to come up with ways to proactively influence that pool. The ideas the company implemented will have an impact on the diversity of the bar for years to come. For example, the company funds annual scholarships for minority law students to study intellectual property law.

“Intellectual property lawyers are very important to Pfizer, and the pool from which one draws is not terribly diverse,” Casazza Herman says. “Funding scholarships in that area is one way to begin diversifying that pool.”

Working with such groups as the Asian American Legal Defense and Education Fund, the Puerto Rican Legal Defense and Education Fund, and the United Negro College Fund, Pfizer created annual summer internships specifically for minority law students. The internships enable the company to forge relationships with top students and expose those students to what it’s like to practice in-house.

Although the process of increasing the diversity of the legal profession as a whole will be gradual, Pfizer isn’t allowing the difficulty of finding diverse candidates slow down its progress. The department has instituted a requirement that all people with hiring power consider a diverse group of candidates for every open position. The company now posts all open positions on the Web site IMDiversity.com (a job database for diversity-conscious employers), and all attorney positions on the MCCA Web site. In addition, the department has increased its interaction with organizations such as CYOC, The Hispanic National Bar Association and the National Bar Association (the primary African-American bar association) to expand its network of diverse professional contacts.

Outside The Box

Hiring and retaining diverse in-house staff is only one aspect of a truly comprehensive diversity initiative. Having put in place programs to work toward those goals, Pfizer now is turning its attention to outside counsel and other key service providers.

“Corporations need to focus more on whether their key service providers are as committed to diversity as they are,” Richardson says. “Law firms are the face of the corporation before judicial bodies, juries and federal agencies. And legal departments need to attend to the issue of whether the people who represent them reflect their corporate values.”

Atiba Adams, senior corporate counsel for litigation at Pfizer, leads the supplier diversity work group. His group has developed two tools that will help ensure the company’s outside law firms are progressing toward diversity along with the in-house department.

“We believe that retaining a diverse group of legal professionals to work on our matters and service our divisions is necessary to create better business results,” Adams says. “But starting out, we weren’t sure where we stood or whether our firms did make diversity a priority.”

Over the past several months, Adams’ team developed a benchmarking survey that inquired not just about the law firms’ demographics, but also their internal policies, participation in diversity-based organizations and their track record of retention and promotion of minority attorneys.

Adams plans to distribute the survey to all of Pfizer’s major law firms in the first quarter of 2005 along with a letter from Kindler that communicates his expectation that the firms will work toward enhancing their diversity as Pfizer does internally.

“Our expectation is that law firms will be engaged with us in making diversity a priority,” Adams says. “If we find that some firms don’t progress, we will work with them to share the knowledge we’ve gained and investigate why they are unable or unwilling to move along with us. If we determined that a law firm simply wasn’t interested, we would take further steps.”

Pfizer’s effort is part of a growing trend of in-house departments putting pressure on law firms to become more diverse. Many experts agree that law firms have been much slower than corporate law departments to make diversity a priority.

“You have a shortage of minority partners at these firms, and they therefore have a lot of trouble retaining the minority associates they have,” Winfree says. “Corporate law firms are not fertile grounds for minority lawyers to prosper.”

But businesses might be the catalyst to change law firm culture. Kindler is one of 65 high-profile general counsel to sign on to the “Call To Action,” a statement authored in 1999 by Sara Lee Corp. GC Rick Palmore.

The Call To Action states that signees make diversity among their outside service providers a priority, and will end or limit their interaction with firms that don’t make strides toward that goal.

“It’s a much more aggressive approach,” Richardson says. “It recognizes that there are a lot of qualified firms that corporations can choose to use, and among those that are highly qualified, those that are advancing with respect to diversity will have an inside edge.”

The second project Adams’ and his team undertook was to incorporate information about diversity into the legal department’s matter management system. Everyone with hiring power in the department uses this system to store data about the attorneys who are working on Pfizer’s matters, and it is used to track hours, rates and other information about those attorneys. Adams thought it made sense to add information about the diversity of the firms Pfizer employs. Now, that database contains information about the firms’ policies with respect to diversity and the percentage of ownership by women and minority attorneys. It also tracks how much legal work Pfizer is giving to minority attorneys and minority firms.

“Culture change is essential to a diversity initiative,” he says. “So it was important to create a resource that people would use and go to. They already access this database and look there to make hiring decisions. It made sense to make this a resource to search for information about women and minority attorneys.”

Looking To The Future

These efforts have added up to tangible results. In the short time the program has been in place, Pfizer has increased the percentage of women and minorities on its legal leadership team from 24 percent in 2003 to 34 percent today.

But, Kindler says, more important than any numerical measure of diversity is companywide culture change. His top goal is that diversity will become built into every aspect of the way Pfizer does business. And that process is only beginning.

“When we stop talking about our ‘diversity initiative’ and just enjoy our diversity and take every opportunity to enhance it, we’ll feel pretty successful,” Kindler says. “There’s no end point to this, though. It’s an ongoing process of constant improvement.”

Although the department seems well on its way to a culture of inclusion, Kindler believes that it still has much to do in terms of reaching out to outside service providers and ensuring that internal networks are in place to aid in the career development and retention of the department’s current staff.

For legal departments that haven’t taken even the first steps, Kindler advises that any successful effort to institute a diversity initiative has to start with the general counsel defining it a business priority. And that’s not always as easy as it sounds.

“You have to make sure people know that you really mean it, and then give them the time to do it,” Kindler says. “All of these people are very busy with their own jobs, and committing to this means that they’re doing this instead of something else. That’s what it means to make something a priority.”