Diversity as Law Firm Risk Management
Jeff Cunningham
Outside General Counsel for Law Firms | Ethics Advice, Legal Malpractice Defense & Holistic Law Firm Risk Management | I cram legal ethics into memes and movies
Diversity, Equity & Inclusion (DE&I) is challenging for even large law firms with vast resources and a diversity officer overseeing a team devoted to DE&I initiatives. At most small firms (20 lawyers or less) DE&I is, at best, a lofty goal for some mythical day when all of the fires have been put out and the named partners can finally put their feet up and relax.
Those same small firms of 20 lawyers or less make up a shocking 72% of ALL legal malpractice claims in the US! Likewise, those same firms tend to be extremely homogenous.
Despite being one of the most diverse places on the planet, in the New York City area where I practice, small law firms tend to follow a similar pattern being essentially named: 3 Jewish guys, 2 Italian women, 4 Irish names, etc. They also tend to actually come from the same places - the same town on Long Island, the same law school, etc. This homogenous makeup tends to extend to their nonlawyer staff, although generally not as starkly.
It certainly makes sense that people with similar backgrounds start law firms together and I don't think there's anything sinister behind it, but very simply - non-DE&I law firms are much riskier. Add the non-DE&I risks on to the natural riskiness of small firm practice and you've got a recipe for disaster.
We'll focus on the D - Diversity, but E&I will be further explored in later editions.
Organizations with a gender-diverse executive team are 25% more profitable than peers, while ethnic diversity on the executive team outperforms rivals by 36%. Companies with a diverse management team have a 19% higher rate of revenue. Across the board, diverse businesses outperform less diverse competition.
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Small firms are at a major disadvantage against their large firm competition - they usually can't just hire diversity like the NY Yankees buying big bats. Instead, small firms should look to outsource their DE&I by partnering with teammates, vendors and even clients from different backgrounds.
Start small but make a conscious effort to diversify your firm's team, internally and externally. Diversity comes in so many forms, but some major areas to look for are:
While you focus on the first step - Diversity - remember that the E&I are just as important. Future articles will focus on those aspects of law firm risk management.
DE&I isn't just the right thing to do, it is also great law firm risk management!
English as a Foreign Language Teacher at National Taipei University of Business
2 年I’m neither an attorney nor in the DE&I space. I teach in Taipei, Taiwan to immensely homogeneous classes among immensely homogeneous colleagues. I also teach Vietnamese graduate students online, with very few non-Vietnamese students. Nonetheless, I found this article quite interesting. I didn’t know about the link between diversity and profitability and I wonder what the “why?” is behind those figures. Has anyone followed up with maybe qualitative research to figure out, for example, how Attorney X of the Y ethnicity brought in $Z to the firm and helped the firm earn profits above the industry average?
Leveraging the Power of Fun (and data) to Increase Engagement & Productivity
2 年Yes! Similar people with similar backgrounds and similar experiences tend to have similar concerns, ideas, problems, and solutions. So they will be more likely to overlook risks, problems, and solutions that would come to light if the people at the table were more diverse. Assuming, of course, they are respected and heard. #DiversityEquityInclusionBelonging
Because THRIVING in law isn’t just about long hours—it’s about strategic focus, strong well-being, and celebrating each milestone
2 年Sometimes D & I can seem Overwhelming but starting small and making a conscious effort to diversify the firm’s team, internally and externally.