Robyn Forman Pollack of Trellis Consulting and Christina M. Reger of Griesing Law.

It is 2020. Big Law firm, ABC LLP, just experienced a loss of many of its women and minority mid-level associates. ABC is worried. It has had difficulty attracting talent in general, and even more difficulty attracting diverse attorneys. Now, with the departure of a significant number of its mid-level diverse ranks, it fears it will face even more challenges.

The firm has been hearing some chatter that the reason people are leaving—and why it cannot attract new people—is because its diversity and inclusion (D&I) initiative is lacking. While the Initiative exists on paper and the firm sponsors a few D&I programs a year, D&I is clearly not a priority. ABC has developed a reputation as a place that just "checks the box," where authenticity, equity and inclusion are not truly valued, and where equal access to good work, clients and partnership opportunities does not exist.

Further, the associate exodus and reputational damage resulted in the loss of two corporate clients. One of the clients told the originating partner that the firm's lack of commitment to diversity has forced it to place the work with a smaller, minority-owned firm. ABC is also having problems winning new business. The D&I issue is not one the firm can quickly fix, and if this trend continues, its future is uncertain.

While this scenario is fictitious, it more closely parallels reality every day. Although D&I has long been a topic of conversation in the legal profession, law firms still lag despairingly behind corporate America and governmental entities when it comes to meaningful change. In 2018, the percentage of minority partners grew to only 9.13%, less than a 1% increase over 2017. Women accounted for only 23.36% of law firm partners in 2018, up less than 1% from 2017, with minority women as the most underrepresented in the group. See National Association for Law Placement (NALP) "2018 Report on Diversity in U.S. Law Firms," Scott Flaherty, "Law Firms Took Steps Forward in Diversity in 2018, Not Leaps: Report," The American Lawyer, (Jan. 19, 2019). In an effort to address this issue, one firm has announced publicly its goal to have 40% women and 20% flexible gender among its partner ranks by 2025. Elizabeth Olson, " Baker Mckenzie Sets Gender Goals, Aims for More Women Partners," Bloomberg Law, (June 24, 2019). While laudable, the profession needs more firms to make this, and other, commitments to D&I.

While many firms appreciate the benefits that come from implementing a meaningful D&I Initiative in theory—for example, attracting and retaining the best associates, or the most desirable clients—too few firms are committed to making the needed culture shift. Rather, D&I is given a lower priority than other firm initiatives and programs because firm leadership often does not view it as a business imperative or as generating enough business benefit.

The problem with this approach is that firms that have not prioritized D&I may already be experiencing issues, and those that wait to focus on D&I in an integrated, comprehensive way will find that it is too late to remedy the consequences. Implementation and culture change take time. It is ironic that such a risk-averse profession continues to put itself at such risk, particularly when the risk is even greater now than ever before.

There are three recent, specific market forces affecting law firms today that make a prioritized, strategic approach to D&I essential to law firm sustainability: the changing cultural climate; generational shifts; and client/governmental pressure.

First, the cultural climate and impact of the #MeToo movement on D&I cannot be ignored. This movement has catapulted D&I to the forefront. Data proving the business benefits of diversity, and even more importantly, inclusion, continues to accumulate, and more companies are making D&I a focus. Furthermore, it is no longer a stigma—or a career derailer—to hold organizations responsible for sexual, racial or unlawful harassment, discrimination, gender bias and a host of other inequitable treatment in the workplace, and law firms are not immune. Large firms like Morrison & Foerster have been exposed for gender and pregnancy discrimination and accompanying pay inequities, see Kathryn Rubino, "More Plaintiffs Added to Astonishing Pregnancy and Gender Discrimination Case Against MoFo," Above the Law (Jan. 28, 2019. Smaller firms also face claims of sexual harassment and bullying, see Brian Hickey, " Paralegal: Center City law firm fired me for complaining about sexual harassment, bullying," Philly Voice (Mar. 20, 2019).

Next, generational shifts in the workplace make it impractical, if not impossible, for law firms to not prioritize D&I if they expect to remain competitive. By 2020, according to the U.S. Bureau of Labor Statistics, approximately 50% of the U.S. workforce will be made up of millennials, with that number growing to 75% by 2030, see Mark Emmons, "Key Statistics About Millennials in the Workplace," Dynamic Signal. The majority of that generation, and the next generation (Gen Z), feel that diversity and inclusion are essential to an ideal workplace and that diversity has a higher priority than merit, see Paul Bedard, " Survey: Millennials Choose Diversity Over Merit, Environment Over Jobs," The Washington Examiner, (Apr. 15, 2019). In other words, millennials and Gen Zers have an expectation of diverse, inclusive workplaces, and that includes law firms. Firms that do not clearly and consistently commit to this culture in a meaningful way will not attract and retain talent.

Finally, governmental and client pressure significantly impact law firms. Earlier this year, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) announced that it intended to take a harder look at diversity and discrimination at law firms through random audits of firms that perform legal services for governmental agencies. Law firms that fail to meet the OFCCP requirements could be subject to the OFCCP's enforcement powers, including conciliation agreements, sanctions and termination of their government contracts.  MP McQueen, "Government Warns Law Firms of Consequences for Diversity Failures," The American Lawyer, (Apr. 10, 2019). The OFCCP's  focus on this underscores not only the importance of D&I, but the fact that so many law firms are not doing nearly enough.

Clients are also exerting more pressure on firms. While corporate clients have typically requested demographic diversity data from firms submitting RFPs or pitching work, more recently, clients have been requesting diversity information about matter responsibility and leadership of cases. Earlier this year, more than 170 general and corporate counsel signed a warning letter to law firms, committing to allocate work, and consequently dollars, to law firms that have truly prioritized D&I. Many of these companies are pulling work from Big Law firms who are not doing enough to demonstrate that they take D&I seriously, and reassigning it to smaller, women- and minority-owned firms, see Dylan Jackson, " Frustrated with Big Law Diversity Many Companies Are Looking Elsewhere," The American Lawyer, (June 3, 2019).

What can firms do to make D&I an essential component of their business strategy today to maximize success and survival in the marketplace of tomorrow?

There are four things that law firms must do:

• Brave Data Gathering. It is essential to identify the issues and root causes that are creating cultural problems. Without this data, firms lack the necessary information to initiate the right solutions. While lawyers can issue-spot, these kinds of issues tend to reveal themselves better through audits and assessments. But, firm leadership needs to be brave—leadership has to want to know—and demonstrate a commitment to face the truth, good and bad.
• Strategic Roadmap. D&I should not be an ancillary initiative. Invest the time to create short- and long-term strategic business plans based on the data collection results. Use measurable objectives and SMART goals as part of the roadmap, set forth priorities and integrate the firm's business goals and values.
• Just Do It. Determine how the firm plans to identify and implement the solutions to reach the objectives and goals set. There are a myriad of potential solutions depending on the issues uncovered and the priorities of the firm. The key is to do something to move the strategic plan forward and to do it in an integrated, comprehensive, accountable way.
• Measure the Metrics. Implement measurable metrics. The only way to know if the firm has achieved success is to quantify the results. Measuring the metrics also maximizes accountability and allows for agility and flexibility to make adjustments.

Firm leaders must commit to making D&I an integral priority to the business and practice of law. The sustainability of firms—and of the profession—depends on it.

Robyn Forman Pollack is CEO and founder of Trellis Consulting. A business strategist with a focus on diversity and inclusion. Pollack has been actively involved in diversity issues for 20 years. She has lectured and written extensively on issues of diversity and inclusion, harassment, best practices, communication, team collaboration, networking, negotiation and effective leadership. Contact her at [email protected].

Christina M. Reger is a member of Griesing Law and the chair of the employment practice group.  She handles a variety of employment litigation matters including breach of employment contract disputes, unfair competition, discrimination and harassment, enforcement of restrictive covenants, business divorces and a wide variety of other general commercial litigation matters. Contact her at [email protected].