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The private equity world has a long-standing reputation for lacking diversity, and the same goes for the legal teams that staff private equity matters.

A recent survey by data provider Preqin found that 5.2% of private equity firm board seats are occupied by women. Minority-owned firms account for 3.9% of all private equity firms.

On the law firm side, private equity practices have long been perceived as dominated by white men, even as other institutional clients and Fortune 500 companies continue to diversify.

"I can name, like, four black fund lawyers nationwide," said Fried, Frank, Harris, Shriver & Jacobson partner Matt Howard, who began his career as a private equity lawyer at Cleary Gottlieb Steen & Hamilton in 2004.

"Many of the small houses that are relatively successful have very small partnerships, [made up of] a handful of individuals that tend to be white," Howard, who is black, added. "People form relationships and business is developed with the guy who you went to college with or who you know from the golf club. There's an unintentional exclusionary effect."

But there are some indications that the dynamic may be changing.

PricewaterhouseCoopers expects that the assets under management in the private equity industry will more than double from $4.7 trillion in 2016 to $10.2 trillion by 2025. And with the increase in money managed has come an increase in head count. Blackstone, for example, employs more than 250 private equity professionals.

At the biggest funds, that growth has come with diversity infrastructure—inclusion executives, diversity plans. Many believe the discussion around private equity diversity will only grow with expansion of the industry.

The Carlyle Group, one of the world's largest private equity funds, has a written diversity policy and created a diversity and inclusion council in 2013. In 2018, Carlyle appointed Kara Helander, who was a diversity executive at BlackRock for a decade, as the firm's first chief inclusion and diversity officer.

"Year to date, out of our hires in the U.S., 59% have either been female, black, Hispanic, Native American or Pacific Islander," Helander said. "Our team set a goal across our companies globally to have at least one diverse board member within two years of ownership."

Carlyle has also begun requesting from each of its law firms a copy of the firm's American Bar Association model diversity survey. The fund wants hard data to show its legal teams are addressing the issue, much like the corporate clients who have been clamoring for increasingly diverse legal representation.

The question many are asking now is whether the increasing focus on diversity will affect the composition of the world's top private equity practices, which stand to make a killing off of the private equity boom.

The private equity world has considerable sway over the bottom lines and hiring decisions of the world's top law firms. The firms with the two busiest private equity teams, Kirkland & Ellis and Latham & Watkins, hold the No. 1 and No. 2 spots, respectively, on the Am Law 100.

Erica Berthou, a senior investment funds partner at Kirkland & Ellis, is optimistic. She's noticed an uptick of women on private equity in-house legal teams, which she believes will bring in more women on the law firm side.

"Maybe because I'm a glass-half-full kind of person, I'm very optimistic about greater female participation in private equity practices, especially as those at the top become increasingly diverse," she said.

Whereas before there were almost no senior women in private fund practices, Berthou and her peers such as Kirkland private equity partner Jennifer Perkins are providing a template for women looking to advance in the space, she said. Changing attitudes and gender parity regarding parental leave and caregiver status as well as a more collaborative, team-oriented approach to modern law have also helped women break into the private equity world.

"As a woman coming into a law firm, you look for diversity and role models," she said. "And because there hasn't been senior-level female diversity in private equity practices until fairly recently, there hasn't been a natural pool of female role models."

Howard is similarly optimistic.

"As these organizations grow, they necessarily become more institutionalized," he said. "You can't run a 400-person organization the way you run a 15-person organization. The expectations on them, through visibility, become greater."

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