A Two-Pronged Attack: GCs Take Action for Diversity

May 24, 2019


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2 min read

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What's going on here?

Over 170 general counsel (the main lawyer within a company) have published what they believe to be the crucial actions to pressure law firms to improve their diversity.

What does this mean?

The ‘GCs for Law Firm Diversity network’ has published a report to identify what tangible steps they can take to make sure that law firms are taking notice of this important issue. The document, entitled ‘Strategies and Tactics For In-House Legal Departments to Improve Outside Counsel Diversity’ asks GCs to monitor and act on the progress which their advising law firms are making. The suggestions go even further to recommend that GCs make diversity an explicit requirement of any team that deals with their work. Beyond this, they have suggested to boycott firms with bad diversity metrics or to even withhold fees if firms fail to make progress that they promised.

Why should law firms care?

The issue of a lack of diversity in law firms is no secret. Firms are now seeing the importance of improving the diversity of talent within their firm. However, while firms are quick to make statements of intent and set appealing targets, there is often no real sanction for a failure to achieve these goals. With this latest movement, maybe things will change.

The GCs for Law Firm Diversity network has seen representatives of over 170 companies write an open letter criticising the “largely male and white” law firms. The letter states that GCs 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”. It continues to directly point out the underrepresented groups by emphasising that “there are women, people of color, and members of the LGBTQIA community and others who are no doubt equally deserving, but are not equally rewarded.”

While currently, the 170 companies are all US-based, the network has said that it would “welcome those across the pond and globe” to join it.

Beyond the admirable intention of these GCs, the network has the power to impact law firms in the most effective way – by damaging their revenue. The group’s willingness to reject firms that do not take diversity seriously puts heavy pressure on law firms to respond.

The letter is certainly not an empty threat. In the past, US computing giant HP promised to withhold 10% of the costs invoiced by firms that did not reach its diversity requirements.

Will GCs in the UK follow this trend to pile the pressure on law firms to act?

Report written by Idin S

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