2 things you can do to track your outside law firm diversity

According to the findings of the 2020 Diversity Scorecard, the percentage of underrepresented groups working in top law firms has increased by only 3.9 percent over the course of the last 11 years. In addition, recent polls have revealed that women make up just 25 percent of the legal profession, and that only 10 percent of attorneys are of a minority race.

It has been difficult to move the diversity, equity, and inclusion (DEI) needle in the legal industry due to psychological barriers such as the bystander effect, loss aversion, status quo bias, and bias lock-in. These phenomena observe that people are less likely to come to someone’s aid when others are around and a preference for situations to remain the same.

Industry leaders, firm management, attorneys, and general counsel need to urge real action to question the status quo and make decisions based on potential long-term benefit rather than judgments based on what is considered to be a loss in the short term in order for change to occur.

Corporate legal departments are overcoming these psychological barriers by placing significant weight on the commitment of their outside law firms to providing a diverse staff to perform legal services across all practise areas. In doing so, these departments are able to provide legal services to their companies in a wider range of practise areas.

According to a survey conducted earlier this year with over 200 members of the consortium, more than a third of CLOC members (Corporate Legal Operations Consortium) stated that their legal departments hire outside counsel based on law firm diversity metrics. In fact, this statistic represents more than a third of all respondents.

Here are two essential projects to start thinking about if your legal department is searching for ways to drive diversity and inclusion with outside law firms. If your legal department is looking for methods to drive diversity and inclusion with outside law firms, click here.

Collect and scrutinise information on diversity.

One of the primary advantages that comes with having a broad collection of people working on your issues is the production of higher-quality work. It allows for the introduction of concepts and experiences that come from a variety of points of view, which in turn leads to improved procedures, analyses, and, finally, solutions.

64 percent of departments in the legal sector aren’t collecting diversity statistics because they don’t have enough resources or the proper tools to do so. This is despite the fact that legal departments are having a positive influence on change in the legal industry. However, failing to invest in the monitoring of that data is a significant error. The examination of this data helps to generate educated decisions about the employment and retention of outside counsel, which eventually results in cost savings over the long run.

Carry out an investigation on the diversity of your outside counsel.

Conducting surveys of your existing outside counsel or companies you’re contemplating collaborating with is a simple way to measure the diversity of their team and will give you a strong handle on how they approach DEI. You can also use this method to determine whether or not they make an attempt to promote DEI.

The American Bar Association’s Model Diversity Survey is an efficient survey that you may request all of your prospective outside legal firms to complete. When diversity data on schedule flexibility, remuneration, partnership rankings, recruiting processes, and retention rates are collected, it gives an indication of how varied an organisation is.

When it comes to the legal firms with whom you are already familiar, we always advise doing yearly assessments of your OCGs. It couldn’t be a better moment to launch a diversity survey and explain why doing so is vital to both you and the legal department of your company. The billing standards whitepaper from SimpleLegal can provide you with assistance in getting started with best practises when reviewing your OCGs.

Utilize technology related to law to keep track of diversity data

After making the decision to collaborate with an outside legal firm, it is important to continue monitoring their diversity statistics in order to ensure that they continue to satisfy the diversity standards of your own law firm.

The e-billing features of legal operations management platforms collect data to offer visibility into project budgets, open litigation cases, and employee productivity. While legal e-Billing systems were first developed to get a deeper understanding of spending, current solutions such as SimpleLegal have the ability to simultaneously promote diversity initiatives by monitoring factors such as gender, race/ethnicity, and veteran status.

Only the first step, which consists of tracking and analysing data, has been completed. The process by which change is initiated is by acting on the findings of one’s analyses.

Establish programmes that ensure that legal services providers are held accountable

After you have gathered data and conducted an analysis of the diversity of the companies with which you collaborate, the next step is to establish a programme that will hold those firms accountable for their diversity efforts and thereby increase the amount of effort put into increasing diversity.

Determining the diversity success metrics for your organisation is a good place to start. Once you have set the requirements for concrete metrics, you should evaluate and rework any outdated guidelines for law firm billing to include the diversity criteria, and you should make your expectations for outside counsel known at the very beginning of a project.

When you make your outside law firms comply with the DEI programme, you are holding them accountable for increasing their representation. Examine the following three programmes to see what they are doing to implement and maintain their DEI programmes.

A diversity bonus of three percent per year is available from Microsoft.

At the end of each year, Microsoft evaluates which of its outside law firms have done the best job of meeting their diversity goals and then gives those firms a diversity bonus equal to three percent of their revenue.

In 2008, Microsoft was the first company to introduce its Law Firm Diversity Program (LFDP), which gives awards to law firms that put an emphasis on diversity initiatives. Since then, there have been several variations of the programme, but the overarching objective, which is to increase the overall diversity of outside counsel, has remained the same. It seeks to increase the participation of people from underrepresented groups, such as women, people of colour, LGBTQ+ individuals, people with disabilities, and veterans.

All of Microsoft’s law firm partners have access to the company’s five diversity criteria. The legal service providers select one of the five criteria to serve as their primary objective for the course of the year, and they do so by voting. A diversity bonus is given to the outside law firms that succeed in achieving the goals they have set for themselves.

Facebook mandates that at least one-third of the members of any outside counsel teams be members of an underrepresented race or gender.

In an effort to create a more diverse and welcoming work environment, Facebook is targeting a 33 percent representation of ethnic minority and female lawyers on their outside legal teams. The company’s internal legal team has made increasing diversity a priority, both within their own ranks and among the people they collaborate with.

Facebook takes its programme one step further by also instructing its outside counsel to encourage the professional development of their diverse lawyers by providing growth and leadership opportunities. This instruction comes on top of Facebook’s requirement that its outside counsel must staff their teams with diverse teams that include both women and members of underrepresented minorities.

When a company fails to comply with HP’s diversity mandate, the company withholds ten percent of the fees that they are owed.
Outside counsel who do not meet Hewlett Packard’s (HP) diversity standards will have 10 percent of their fees automatically forfeited, according to the OCGs that the company has in place.

According to the company’s diversity programme, all outside law firms that employ more than 10 attorneys are required to have at least one diverse firm relationship partner who works with HP, as well as at least one ethnically diverse attorney and one female attorney who each perform or manage at least 10 percent of the billable hours for the company.

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