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When It Comes to Diversity, Corporate Clients Are Flexing Their Muscles

By Casey C. Sullivan, Esq. on April 04, 2017 | Last updated on March 21, 2019

If the legal profession ever becomes more representative of America's demographics, it might be because of in-house lawyers like you. More and more, major corporate legal departments are requiring that their outside counsel invest in diversity.

The most recent corporate client to flex some pro-diversity muscle is Facebook. This weekend, the company institute a new diversity mandate for its outside counsel, the New York Times reports. Under the new policy, teams handling legal matters for Facebook must be at least one-third minority or female.

Companies Demands Diverse Teams

If that doesn't seem like a big ask, keep in mind that the law is 88 percent white and 44 percent female, with the homogeneity only increasing when looking at the higher ranks.

"Firms typically do what their clients want," Facebook GC Colin Stretch told the Times. Law firms are ready for more diversity, he says, and "our articulation gives not just permission but a mandate."

Indeed, law firms are proving surprisingly receptive to clients' diversity demands. HP, for example, announced in February that it will hold back 10 percent of fees requested by outside counsel that isn't sufficiently diverse. Instead of pushback, "I've gotten dozens of calls and meeting requests largely asking how to partner with us to have the program succeed," HP's GC Kim Rivera says.

Corporate Clients Leading the Diversity Charge

Facebook isn't the only company who is looking for greater diversity in its outside counsel. Microsoft, NBC, AT&T, and more are all holding their outside attorneys to higher diversity standards, according to Bloomberg's Big Law Business. HP, for example, is withholding 10 percent of its payments if the billed hours weren't performed by a sufficiently diverse workforce.

Many large corporate legal departments are going beyond just asking their firms too report diversity statistics, to monitoring the firms for diversity themselves. Walmart, Bloomberg's Stephanie Russell-Kraft reports, tracks the race, gender, and ethnicity of outside counsel, and can correlate that to hours worked per attorney, to make sure that matters are truly being handled by a representative team. This sort of tracking can also ensure that law firms aren't just hiring diverse figureheads -- a minority partner here, a female firm manager there -- but that diversity is maintained throughout their workforce.

Of course, this isn't to say that corporate clients don't have some work to do themselves; there are only 90 minority GCs and 224 female GCs in the Fortune 1000 companies, for example. But as companies adopt more aggressive diversity initiatives, they could help transform the legal profession, both in house and out.

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