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Twenty of the 59 general counsel hired by Fortune 500 companies last year were ethnically diverse, a new study found, a big improvement from past years that reflects the growing pipeline of minority talent and stepped-up efforts by companies to diversify their C-suites.

The 2021 activity represents a 34% ethnic diversity hiring rate. By comparison, in 2019, 12 of the 49 GC hirings—or 24%—were ethnically diverse, according to the study by the executive search and leadership advisory firm Russell Reynolds Associates.

With hirings, retirements and other departures, Fortune 500 companies closed 2021 with 85 ethnically diverse GCs and 174 female GCs. That compares with 73 ethnically diverse GCs and 161 female GCs a year earlier.

"There is little doubt that this is the result of renewed energy and pressure for progress towards social justice, but also efforts by organizations to use every GC succession as an opportunity to search for a diverse slate of legal talent, and meaningfully diversify their leadership teams," the report states.

The study noted that 49% of the 59 GC hires last year were women. By comparison, only 28% of the 2018 hires were women.

"The GC appointments of the past year reflect both our current cultural moment as well as a strong pipeline of seasoned female in-house legal executives built over many years, and suggest a positive trend towards additional diversification and, by extension, a more inclusive and equitable Fortune 500," the report states.

The report's findings reflect that companies and their boards are placing more emphasis on diversity when they conduct succession planning, said John Gilmore, co-founder and managing partner of New York-based executive search firm BarkerGilmore.

"The candidate pool for minorities has expanded but still has a long way to go," he said.

He added: "People are out there, but you have to catch them at the right time and in a position to move."

Gilmore said that, even as companies make headway hiring more female GCs, they still sometimes run into female prospects who decline to relocate because of the jobs their spouses hold where they currently live. He said men are more willing to relocate.

Melba Hughes of Major, Lindsey & Africa. (Courtesy photo)

Melba Hughes, Major, Lindsey & Africa's national in-house diversity practice leader, said her firm is placing more diverse candidates and females at high-profile companies than ever before.

"We've placed a black female GC at McDonald's, we've placed a black female GC at Phillips 66," she said. "Last year was our best year, and this year, we are ahead of where we were last year," she said.

McDonald's in March 2021 tapped Desiree Ralls-Morrison as GC, hiring her away from Boston Scientific, where she had been the top lawyer. Phillips 66 hired Vanessa Sutherland as GC in January; she had been chief legal officer of Norfolk Southern.

In recent weeks, a flurry of high-profile companies have tapped diverse candidates to be their legal chiefs. Procter & Gamble said Susan Whaley will succeed Debora Majoras, who is retiring. In addition, Principal Financial snagged Natalie Lamarque away from New York Life, and Intel hired April Miller Boise away from Eaton Corp.

The study found that most Fortune 500 companies that made GC hires in 2021 went with outside candidates, favoring those who had experience in their industry and as a GC.

"There's a sense that there is no time to learn on the job; organizations need a proven entity in this critical enterprise leadership role," the report said.

Hiring externally also gives organizations a greater opportunity to diversify the senior leadership team, according to the report.

Hughes said that's true partly because some companies have not done a good job of succession planning.

"They look around their senior leadership team, and there's more pressure from boards to diversify senior leadership team," she said.

"Thankfully, the legal space is one space where there's a wealth of talent. So they're able to diversify that senior leadership team very quickly through an outside hire," she said.

Barker added: "The bottom line is, it's such an important role, so they're not going to just make a hire for diversity. They're looking for us as search partners to identify a field of highly talented candidates, where it turns out the best-suited candidate happens to be diverse.

"When you bring in people with stellar credentials, top law firm experience, from top law schools, and they really have the soft skills that are necessary to be that strategic business partner and the chemistry right, they're going to get the job."

Jean Lee, CEO of the Minority Corporate Counsel Association, said she thinks "it is terrific to see and heartening that companies are finally realizing the value of diverse leadership in the C-suite and boardrooms."

But she hopes that rather than just going for "quick wins," companies are putting in the hard work developing their talent pipelines to make the progress sustainable.