Solving Law's Diversity Challenge: Data and Small Firms
The solution to law's diversity problem won't happen without a meaningful paradigm shift that involves in-house teams using data to inform their decision-making on outside counsel hiring.
February 26, 2019 at 03:14 PM
5 minute read
On Jan. 27, 170 general counsel from a variety of industries released an open letter decrying the lack of diversity among the law firms they work with. They stated that they “are disappointed to see that many law firms continue to promote partner classes that in no way reflect the demographic composition of entering associate classes.”
This announcement was in response to a now-viral (in legal circles, at least) photo of the Paul, Weiss, Rifkind, Wharton & Garrison incoming partner class that was “largely white and largely male.” The letter concludes by claiming the signatories “as a group, will direct [their] substantial outside counsel spend to those law firms that manifest results with respect to diversity and inclusion, in addition to providing the highest degree of quality representation.”
As the CEO of Priori, a legal marketplace that matches in-house legal departments with boutique firm lawyers and counts many of the letter's signatories as clients, I am intimately aware both of the problems with the current model for finding diverse outside counsel and also that it's a significant concern for many in-house legal teams.
The numbers are clear: law firms are not very effective in producing and fostering diversity, particularly in leadership positions. The representation of women in law firms decreases rapidly at post-associate levels. In 2017, women accounted for 45 percent of associates at firms (and 87 percent of paralegals), but only 22 percent of partnership positions. For every 100 women promoted to partner, 141 men are promoted. For minorities the picture is not any better. People of color now make up 16 percent of law firms but only 9 percent of partners. Diversity isn't trickling up to senior leadership in the legal profession. At least not fast enough.
The question, of course, is why? Is it white, male partners, consciously or not, mentoring and championing younger professionals who remind them of themselves? Is it that most clients are still, in their heart of hearts, more comfortable with people who look like them? Is it that many women hit their peak childbearing years as they are up for partner and can't notch enough deals or cases to compete with their colleagues? Is it that the hourly work expectations of many BigLaw firms mean that being present for a family life is all but impossible, and many partners, male and female, have stay-at-home spouses? Is it that the pyramidic structure of a law firm means that change is definitionally glacial, leading many women and people of color to opt out? I certainly believe there is an element of truth to all of these, and there are too many more causes to list.
For what it's worth, I do think law firms are trying. This can be seen in the 85 percent of firms that now have established diversity programs. On top of this, the National Association of Minority and Women Owned Law Firms—for companies that aim to spend at least 5 percent of their outside counsel spend on certified women and minority firms—has seen its membership surge by 54 percent over the past four years. But it is simply not enough.
BigLaw's diversity problem—given the yearly pace at which new partners are made, the entrenched culture and structural issues—will likely not be solved anytime soon. However, in-house counsel can be an active part of the solution now, by using smaller firms. Not only are these smaller firms often comprised of former BigLaw attorneys, but they are much more likely to be diverse. If in-house teams are as serious as they say they are about working with women and minority outside counsel, perhaps they ought to consider whether “no one ever got fired for buying IBM” is still a sufficient rationale for reflexively defaulting to BigLaw for projects big and small.
BigLaw's stranglehold on the budgets of major corporations does not persist because BigLaw firms have a monopoly on excellent legal advice. It is because in-house counsel have no other quick way to ascertain quality. The lack of transparency in the legal industry means that purchasers of legal services are forced to rely on proxies for quality (such as a prestigious firm name) when deciding whom to hire.
Data can change this. Using data rather than traditional markers of quality achieves two things. First, it gives in-house teams the freedom to make better informed hiring decisions. And second, by letting purchasers look beyond BigLaw providers, it will inevitably lead to more outside counsel diversity.
The public outcry by the signatories to the open letter was an admirable first step. But the solution to law's diversity problem won't happen without a more meaningful paradigm shift. That shift involves in-house teams using accessible data to enable better informed decision-making for outside counsel hiring. However, to make such a seismic change to the status quo will require everyone's collective attention.
Basha Rubin is the CEO and Co-Founder of Priori, the legal marketplace for in-house teams. She holds a JD from Yale Law School.
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