Novartis AG, the Switzerland-based pharmaceutical company, released its 2020 preferred panel of global and U.S. law firms with strict staffing requirements that its firms believe will help create a more diverse legal profession.

Each of the 22 firms on the panel has committed to having no less than 30% of billable associate time and 20% of partner time be "provided by females, racially/ethnically diverse professionals or members of the LGBTQ+ community. If a firm does not hold up to that staffing commitment for a particular matter, Novartis will withhold 15% of the total amount billed over the 'life of that specific matter.'"

Shannon Thyme Klinger, group general counsel at Novartis, said in an email interview with Corporate Counsel the participating firms "see this initiative as a catalyst to drive further positive change within their own organizations."

Saul Morgenstern, a partner at Arnold & Porter in New York, said Klinger has taken Novartis' commitment to diversity and inclusion to a new level. He said Arnold & Porter has been helping train diverse associates for years to prepare them for partner promotions.

"When Shannon's newest version of the program came across the wires, we were pleased because it dovetails nicely with our firm's culture and our firm's ethics," Morgenstern said.

He said Arnold & Porter often meet or exceed the diversity requirements set out for the firm from Novartis as well as for other clients and they will continue to work toward improving diversity among their ranks.

Mary Ellen Connerty, director of diversity and engagement at O'Melveny & Myers in New York, said in an email that clients like Novartis help drive change for the better.

"Clients like Novartis play a powerful role in driving law firms to become more diverse and inclusive. Like Novartis, we know that diverse and inclusive teams do the best work for our clients and are essential to our firm's future," Connerty said.

She said O'Melveny also uses artificial intelligence tools to bring in diverse talent. She explained they use a tool called Pymetrics to learn about candidates' potential at O'Melveny. Connerty said this helps eliminate any implicit bias that seeps into résumé reviews and helps to expand a diverse pipeline.

Other firms on the panel mentioned the preferred firm program will help move the needle forward on diversity and inclusion in the legal profession.

"We are very pleased to be selected by Novartis as a preferred law firm, which aligns with our collaboration with the Move the Needle Fund, recognition as a 'Mansfield Certified Plus' firm by Diversity Lab, and our deep commitment to creating a more diverse and inclusive legal profession," stated Elizabeth Holland, a senior partner in Goodwin's intellectual property litigation group in New York, said in a statement to Corporate Counsel.

Lori Cohen, vice chair of Greenberg Traurig in Atlanta, said the firm is honored to be a part of the panel.

"We believe Novartis' [Preferred Firm] 3.0 will have a significant, lasting impact on the legal profession, and we applaud Shannon Klinger and Novartis leadership for this visionary, groundbreaking program," Cohen said.

"We are confident that Hogan Lovells can meet and exceed the Panel 3.0 staffing requirements as they are aligned with our own strategy to provide better client experiences through diverse and inclusive teams," said Alice Valder Curran, head of Hogan Lovells' global regulatory practice group in Washington, D.C.

The legal department at Novartis will be leveraging technology to drive firm engagement and track the metrics of ongoing matters. Klinger explained the technology will allow the legal department and its law firms to be notified if the hours being billed by diverse partners and associates "fall below agreed commitments."

Klinger said the preferred panel program will be evaluated on a continuous basis.

"In a constantly changing external world, with ever-changing demands on the legal function, we will also continue to ensure that the capabilities reflected on our Preferred Firm Panel match what Novartis needs to deliver on its mission to reimagine medicine. Where gaps are identified, new firms will be added," Klinger said.

Novartis' latest panel has more firms. Klinger said the company previously had a preferred panel of 10 generalist firms. The firms currently on the preferred panel "serve in specific legal verticals."