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Stability is the big theme of the latest Diversity Scorecard, our third annual survey of minority hiring at the nation’s largest law firms. A total of 215 firms gave us numbers on their minority lawyers in 2002. Attorneys of color continue to compose around 4 percent of all partners and 13 percent of all associates. Asian-Americans still predominate in the associate ranks, while African-Americans kept their edge among partners of color. And a list of usual suspects is beginning to emerge in the Scorecard, as several firms repeated their chart-topping performances of past years. Steel Hector & Davis continues to have the highest percentage of minority attorneys in the country, Holland & Knight still has the largest number of minority partners, and Skadden, Arps, Slate, Meagher & Flom remains unsurpassed in associates of color. Howver, last year’s survey was complicated by two problems caused by the rapid globalization of U.S. firms. Our key statistic — the percentage of a firm’s attorneys who are minorities — is derived by dividing its minority lawyer count by its total lawyer count. The first question concerns the numerator: Should a firm include foreign nationals from Asia, Latin America and Africa in its count of minority attorneys, or just minority U.S. citizens? The second problem affects the denominator: When a firm tallies its total number of lawyers, should it include everyone worldwide, or again, just those who are U.S. citizens of all ethnicities? We think the answer to the first question is clear — only count those minority lawyers who are U.S. citizens — and indeed, that’s what we’ve always asked firms to do. However, it turns out that in past years, many firms have been including foreign nationals. Only last year, because of our more explicit instructions, did they stop. As a result, the count of minority lawyers at many firms dropped from previous years, in some cases considerably. The second problem is a bit harder to solve. At first we thought the answer was obvious: A firm’s statistics should be based on its total number of lawyers. But because diversity has usually been defined in American terms — a business’s workforce should reflect the ethnic makeup of the U.S. population — several firms argued that their statistics should be based on their American attorneys alone. So for the most international firms in our survey, we’ve calculated two minority percentages, one based on their U.S. lawyer count and one on their worldwide count. Our charts are based on numbers submitted by firms themselves to The National Law Journal, another American Lawyer Media publication. The NLJ conducts an annual survey of the country’s 250 largest firms, and has collected ethnic data on a semi-regular basis since 1981. Its most recent questionnaire asked firms to list the number of equity partners, nonequity partners, associates and other attorneys as of Sept. 30, 2002, who were African-American, Asian-American, Hispanic American, and Native American. The 215 firms that submitted ethnic data last year are included in the Diversity Scorecard. Our partner statistics combine numbers for those of both equity and nonequity status; associate figures likewise include both associates and other non-partner attorneys. TOP OF THE POPS Minority attorneys composed 9.6 percent of the 95,312 attorneys at all responding firms last year. Lawyers of color made up a decent portion of all associates — 12.9 percent — but a much lower share of all partners — 4.1 percent. The huge influx of Asian-Americans into law firms since the ’90s is reflected in the fact that they now compose almost half of all minority associates, 47.7 percent. But because African-Americans started entering the pipeline roughly a decade earlier, they hold a slight lead in the upper ranks, where they make up 36.6 percent of all partners of color. Hispanic Americans lag in both categories — second among minority associates, third among minority partners. As noted, we place the most weight on a firm’s percentage of minority lawyers, and we base our overall rankings on this figure. Because of its huge number of Hispanic American attorneys, Steel Hector has regularly clocked in with the highest minority percentage for almost a decade. A strong Latino presence enabled another Florida-based firm, Akerman Senterfitt, to register the third-highest percentage of minority attorneys. Ranking second and fourth, respectively, were Wilson Sonsini Goodrich & Rosati and Morrison & Foerster, California firms that both have a substantial Asian contingent and regularly turn up at the top of our charts. A sense of deja vu pervades our various category as several firms repeated their top rankings from last year. Holland & Knight continued to have the most minority partners, while Greenberg Traurig came in at No. 2 again. Skadden still had the largest number of minority associates and MoFo the second-largest. Troutman Sanders and Phelps Dunbar continued to have one of the highest percentages of African-American attorneys, while Skadden and Holland & Knight again took first and second place for number of black lawyers. Two intellectual property boutiques, Pennie & Edmonds and Fish & Neave, continued to report a very high percentage of Asian-American lawyers. Skadden and MoFo reported the highest number of Asian-American lawyers for the second year in a row. Steel Hector, Greenberg Traurig, Skadden, and Haynes and Boone all repeated their high postitions on the Hispanic lawyer charts. And Dorsey & Whitney continued to rank high for Native Americans. WHO’S A MINORITY? Comparing specific numbers from year to year is harder than comparing rankings, however. As we’ve mentioned, many firms apparently changed their accounting methods last year and stopped including non-U.S. citizens in their minority attorney tallies. It took us a while to figure this out, though. In searching for the cause of this year’s lower numbers, we compared the ethnic data from each responding firm for 2001 and 2002. As we did this, we noticed that a few firms had huge drops in minority associates. Jones Day showed a loss of 42 Asians and 13 Hispanics; Sidley Austin Brown & Wood, 54 Asians; Curtis, Mallet-Prevost, Colt & Mosle, 14 Hispanics; and White & Case, 57 Asians and 22 Hispanics. When we contacted these firms, in each case we were told that the firm had counted its attorneys from Asia and Latin America in previous years, but hadn’t done so last year. (There doesn’t seem to have been a corresponding overcount of African-American attorneys. Because most firms don’t aim for the African market, they hire few African nationals.) Why did these firms change their tallying method? In all but one instance, it was because of our survey instructions. As noted earlier, The NLJ’s questionnaire tells firms to list their number of “African Americans,” “Asian Americans,” etc. Last year we made the directions more explicit, and included a cover letter in the survey package asking firms to count only their ethnic-minority attorneys who were U.S. citizens. White & Case changed its accounting for a different reason. According to spokesman Roger Cohen, the firm was responding to the European Union’s data protection directive. This regulation prohibits a business operating within the EU from transferring personal data to a country that doesn’t have an equally strong protection policy. As it happens, the United States is one of the countries judged by the EU to be lacking in this regard. Data protection specialists at White & Case, Cohen says, have decided that the EU directive prohibits a business from reporting ethnic data on its employees outside of Europe. (Two other firms also cited the EU directive as the reason why they only provided ethnic statistics for their U.S. offices.) DOES THE WORLD COUNT? The second question raised by globalization — should an international firm’s statistics be based on all of its lawyers worldwide, or just those who are U.S. citizens — is tougher to answer than the issue of whether foreign nationals qualify as minorities. If the traditional definition of diversity means that a business hires ethnic minorities in proportion to their share of the U.S. population, then the business’s degree of diversity should arguably be evaluated on the basis of its American employees only. Doing so, however, will mask the inescapable fact that ethnic Americans make up a smaller percentage of all employees worldwide. We first became aware of this issue when compiling the previous Scorecard. Baker & McKenzie, the most global U.S.-based firm, asked that we calculate its minority percentage based on its U.S. lawyer population rather than its total number of attorneys worldwide. Because such a huge portion of Baker’s lawyers are in non-U.S. offices, this seemed like a reasonable request, and we agreed. What we didn’t realize then, however, is just how many other firms have developed a substantial foreign component. Though 83 percent of Baker’s attorneys are in non-U.S. offices (according to 2002 figures), Coudert Brothers has 62 percent, White & Case has 60 percent, Altheimer & Gray has 47 percent, and Cleary has 35 percent. These firms are also aware that their international offices depress their minority percentage. As a spokeswoman for Altheimer says, “Every time I fill out one of these surveys I go, ‘Our Eastern European offices are killing us.’” The obvious solution, it seemed, was to extend what we had come to call “the Baker exception” to the other firms named above. All have more than one-third of their attorneys in non-U.S. offices, which seemed a reasonable cutoff (though admittedly an arbitrary one). The new math can make a substantial difference. Minority Americans only compose 2.2 percent of Baker’s total lawyers worldwide, but 13 percent of its U.S. attorneys. And the fact is that many more firms could benefit from a similar recalculation of their minority percentage. Twenty-eight firms have a tenth to a third of their attorneys in foreign offices; another 64 percent have up to a tenth. Given that the number of minority attorneys at most firms is so low to begin with, even a firm with only 1 percent of lawyers in non-U.S. offices would probably see an improvement in its minority percentage if the calculation didn’t include its foreign attorneys. WHAT’S THE GOAL? We hope to avoid these problems in next year’s Scorecard. Because we’ve made our rules more explicit, we expect every firm now counts only its minority lawyers who are U.S. citizens. And next year we’ll probably extend the “Baker exception” — calculating a firm’s minority percentage on its U.S. lawyer population — to all participants that have attorneys in foreign offices. These issues, however, only concern statistics, and as such, they’re relatively easy to answer. Law firm managers trying to resolve the different goals of diversity and globalization will face some tougher questions: � Do Asian-American and Hispanic American lawyers benefit from the presence of foreign nationals from Asia and Latin America in their firm? � If “achieving diversity” means that a firm should hire ethnic Americans in proportion to their share of the U.S. population, how does the firm achieve diversity when a significant portion of its attorneys are located outside the United States? � Do ethnic American lawyers in a global firm suffer from the fact that they compose a smaller share of the total population? Or is this irrelevant, since white Americans likewise have a smaller presence? Having only begun to ask these questions, we won’t know the answers for a while. Related chart:Diversity Scorecard 2003

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