Honeywell/courtesy photo

Honeywell International Inc. no longer has a single white-shoe Wall Street law firm on its panel of preferred outside firms, which has shrunk from about 100 firms to 13 as part of an effort that began about a year ago.

The project, which is part of a collaboration with general counsel collective AdvanceLaw, has helped Honeywell increase diversity among its outside counsel. The effort also has allowed the Charlotte, North Carolina-based company to better manage outside counsel spending, according to general counsel and senior vice president Anne Madden. 

Madden and Scott Offer, chief lawyer for Flex, a global electronics manufacturer headquartered in Singapore with a U.S. base in Silicon Valley, spoke on July 14 during an AdvanceLaw webinar about creating results-based outside counsel panels through data analytics. 

"They're the right kind of firms and we know this because we put the firms through their paces," Madden said. "We have to have the courage to be able to move away from that comfort blanket and move to firms that give us just as much quality but at a lower price point and really being thoughtful about who we go to for what sort of matter."

Offer noted during the talk that his company also had too many outside law firms on its roster and initially began working to shorten the list to "increase understanding, commitment and investment" from Flex's outside firms. Later, cutting costs entered the equation. The effort resulted in Flex going from about 100 firms to 12, according to Offer.

As part of its firm selection process, Honeywell looks to a scorecard that AdvanceLaw designed and which rates firms based on diversity, innovation, size, billing rates and expertise. The approach pairs Honeywell and Flex with the best firms for their needs on a particular matter. Meanwhile, firms with high scores "will be rewarded with more work," Madden said. And not just from Honeywell and Flex but the nearly 300 general counsel that are part of the AdvanceLaw collective.

Most of the firms on the panels are still relatively large, about 500 lawyers on average, but are not so-called white-shoe Wall Street firms and therefore tend to charge relatively lower billing rates.

Madden noted that she serves as the gatekeeper for outside counsel hiring. And so any request to work with a firm that's not on Honeywell's new, smaller panel must go through Madden, who said she only grants exceptions when there is a "special reason."

"If you set up a control process like this and you don't wrap the right controls around it, it's not going to work," Madden said.

As for diversity, Madden said that Honeywell encourages diverse teams for all of its outside counsel hiring. She stressed that the company has a "very clear expectation for all of our law firms that that's what we want," adding that the expectation also applies to Honeywell.

"If we're going to hold our feet to the fire and say, 'Each interview slate has to have at least two diverse candidates,' we want our partners to make those same commitments in their hiring practices and in the assembly of the teams that we use on our matters," she said.

Offer, meanwhile, asserted that more progress has been made on gender diversity than ethnic diversity within the legal profession, though work remains to be done on the former as well. He advocated for mentorship programs as one way to increase diversity in the profession.

"I think on ethnic diversity we just haven't done enough," he said. "Now, I think, is the time to act."

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