One Year Later: Has the General Counsel Open Letter on Diversity Had an Impact?
Many say progress in law firm diversity has been limited, despite the letter from outside counsel.
February 07, 2020 at 07:59 PM
6 minute read
A little more than a year has passed since more than 170 general counsel signed an open letter demanding that law firms field more diverse teams and threatening their collective millions in legal spend if outside counsel didn't comply.
But gauging the success of the letter, and the subsequent advancement of women and nonwhite attorneys in the year since, is difficult and complex. Michelle Fang, chief legal officer of car-sharing company Turo, who penned the open letter, says she is hopeful that her fellow signatories have followed through. But would she bet her savings? No.
"My honest answer is I really don't know," Fang said. "From my vantage point, and I know it feels very qualitative, I know what companies in my sphere are doing, and we're doing a lot. Some announcements look good but some are less exciting."
Indeed, signs suggest the legal profession's progress in the past year has been limited. Just two of the 177 original signatories of the letter told Thomson Reuters that they had dropped firms that weren't diverse enough. One of them, Google Fiber GC Fleur Knowsley, added that the breakup came before they even signed the letter.
Recent numbers from the National Association for Law Placement found the ranks of black associates have finally surpassed pre-recession numbers, although NALP Executive Director James Leipold found few reasons to celebrate.
"While that is a positive sign, it is barely so, and it strikes me as somewhat of a tragedy that it has taken more than 10 years to achieve such a meager benchmark," Leipold wrote in a release accompanying the December report.
"Despite steady gains, great structural and cultural hurdles remain that prevent law firms from being able to measure more rapid progress in increasing diversity, particularly among the partnership ranks," he added.
An analysis by The American Lawyer found that minority attorneys are disproportionately filling the growing nonequity partner tiers among the world's largest firms. Another analysis by legal diversity organization Diversity Lab found that at the current rate of advancement, law firm equity ranks won't match the diversity of law school graduating classes for women and racial minorities in the equity partnership until 2057 and 2084, respectively.
Last year, firms including Jones Day, DLA Piper, Greenberg Traurig, Fox Rothschild and Davis Polk & Wardwell all faced racial or gender bias suits. And there have been several iterations of open letters calling for increased legal diversity in the past—a fact many who criticize the current letter haven't forgotten.
But signs have emerged signaling that maybe this recent iteration of the open letter may be more successful than its failed predecessors. For one, Fang followed up on her original letter by developing a set of actionable items that GCs can take to diversify legal spend. She will soon send out a survey to fellow signatories asking how they have followed through on their commitments.
Paul, Weiss, Rifkind, Wharton & Garrison—the firm whose all-white 2019 partner class galvanized the letter—announced a significantly more diverse partnership class this year, as have other Big Law firms.
Diversity Lab has rolled out and maintained a slate of programs that have gotten buy-in from dozens of Big Law firms. Sixty-four law firms qualified for the second iteration of the organization'sMansfield Rule, which requires that 30% of potential candidates for "significant" leadership roles be women, minorities and LGTBQ+ attorneys. About 102 firms are participating in the third round of Mansfield certification.
Five firms—Nixon Peabody; Orrick, Herrington & Sutcliffe; Goodwin Procter; Eversheds Sutherland; and Stoel Rives—have committed a collective $5 million over the next five years to Diversity Lab's Move the Needle Fund, along with more than 25 general counsel who hail from such corporations as Bloomberg, Ford Motor Co., Starbucks, and 3M, among others.
Diversity Lab founder Caren Ulrich Stacy said that "dozens and dozens" of legal departments have come to her organization for help in setting thresholds and metrics for diversity, adding that many GCs haven't announced their diversity pledges publicly.
"It has been a good year because the clients are doing more than signing pledges and open letters," she said.
The splashiest client announcement came in November, when Intel declared that it would drop firms whose U.S. equity partnerships aren't at least 21% women and 10% nonwhite.
Advocates further add that dropping all firms with white teams wasn't the intention: it's also about making sure that women and minorities are given opportunities on new matters.
The National Association of Minority and Women-Owned Law Firms CEO Joel Stern said NAMWOLF firms have seen a tremendous uptick in solicitations within the past year, including several from Turo, and more than 50 CLE presentations to Fortune 500 companies and hundreds more to other legal departments.
"It's not just saying, 'I'm not going to do business with you.' Legal departments will go to the firms and say, 'Remember the $17 million you gave me last year? This year it will be $5 million,'" Stern said. "I see more corporations coming to our meetings and using us to find law firms, and I see more minority- and women-owned law firms getting a bite of the apple."
Given all of these advancements, representation remains woefully low in law firms. A December report by NALP found that nonwhite attorneys accounted for less than 10% of law firm partners, either equity or nonequity, while women accounted for 24% of partners—up less than one percentage point from 2018.
Women of color continue to be the least represented. Asian women account for just 1.46% of partners, Latin women just 0.8% and black women 0.75%.
Critics such as Constangy, Brooks, Smith & Prophete name partner Don Prophete, who wrote a devastating response to last year's letter, said he's seen nothing materially change in the past year, adding that it is a "ridiculous" notion that corporations can regulate law firms long term. A recent report by the nonprofit Center for Talent Innovation found that African Americans account for just 0.8% of Fortune 500 CEOs and 3.2% of senior-level executives and managers.
"I no longer hold despair; I just move forward understanding what the real conditions are and move around those conditions," Prophete said. "If the expectation is that the law firms and the companies will get together and meaningfully fix this problem, then nobody is based in reality."
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