Diversity and Inclusion: Not Just an Ideal, But a Client Demand

Facebook recently announced a new policy: At least 33% of the lawyers hired to represent the social media giant must be a female or minority. Law firms vying to service Facebook's legal work must demonstrate their active efforts to provide meaningful opportunities for women and ethnic minorities to have lead roles in handling Facebook's legal matters.

This announcement puts Facebook on par with many other employers who, as part of their internal diversity initiatives, have placed pressure on other industries to improve diversity in the workplace. For example, last fall, Verizon called on all of its advertising agencies to report their breakdown of women and minority employees and to adopt action plans for diversifying their workforce. Similarly, investors have added pressure on large companies by calling shareholder votes that mandate companies to diversify their corporate boards and executive ranks.

By creating a carrot for law firms to diversify, Facebook targets a profession notorious for being one of the least diverse in the country and slow to change. A recent report from National Association for Legal Placement determined that minority women continue to be the most dramatically underrepresented group at the partnership level, at just 2.76% of partners in 2016, across all firm sizes and most jurisdictions. And African-American representation in the partnership ranks has barely budged since 2009, at 1.81%. These trends persist despite relatively strong advances in diversity in law school admissions and among summer associate classes, suggesting that representation of women and minorities declines dramatically after the early years of practice because law firms fail to retain and promote these lawyers.

Facebook's announcement holds a lesson not just for law firms but for employers everywhere. Increasingly, clients are creating both incentives and penalties for their vendors and suppliers to align with their diversity goals. Companies like MetLife are currently meeting with their outside law firms to evaluate law firm diversity metrics under the threat of being fired if there hasn't been any improvement in those metrics after six months.

Law firms and employers are reminded, therefore, to not focus merely on legal compliance with Title VII of the Civil Rights Act, the Americans with Disabilities Act, and numerous other federal and state laws intended to protect women and minorities. Rather, to stay competitive, employers should anticipate and plan for growing expectations of clients and investors to actively improve their diversity and inclusion efforts within their own company. Firms and employers should remember that millennials, in particular, believe these efforts are essential to success. For millennials, these are not just metrics to please a government agency or comply with the law; they represent a fundamental value. Accordingly, businesses everywhere need to adopt genuine and comprehensive strategies to improve diversity, ensure that implicit bias is not an impediment, and promote a genuinely inclusive culture at work.

These efforts should be measurable in order to be meaningful. Companies with large workforces required to file the EEO-1 form reporting their gender and racial breakdowns across various job categories should expect to provide similar information to clients and investors and be prepared to demonstrate genuine, measurable plans to diversify their leadership and workforce. Employers should consider tracking not only the diversity of their workforce, applicants, and hires, but also that of the managers and executives who interview and make hiring decisions. Diversity efforts can also be measured in terms of the number of events serving women and minorities that an employer sponsors, whether for recruiting (i.e., job fairs) or supporting the community (i.e., helping underrepresented communities). Internal comparisons of workloads and compensation statistics broken down by demographic can further illuminate the equity of pay and work opportunities as well. Intentional strategies and processes that reflect genuine and continuous efforts to embrace diversity and foster an inclusive environment will set apart businesses and attract clients who are increasingly socially-conscious.

Terrence Graves is a Shareholder at Sands Anderson and chairs its Diversity Committee, as well as the Coverage & Casualty Litigation group. Faith Alejandro serves as Counsel and is a member of the Diversity Committee and Lateral Recruiting Committee.