Meeting Diversity Goals Starts with Measuring Them

Note: This article was originally published in Legal Tech News on 2/11/2021. See here: https://www.law.com/legaltechnews/2021/02/11/meeting-diversity-goals-starts-with-measuring-them/

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The legal industry, like many others, has been working to improve its efforts toward diversity and inclusion. According to the American Bar Association (ABA), 85% of lawyers in the United States were white and 64% were men as recently as 2018. A myriad of initiatives aimed at remedying the lack of diversity exist, but one place corporate legal departments (CLDs) can start is by requiring an improvement in the diversity of their outside counsel.?

While increasing diversity can seem like a daunting task, having quantifiable goals is a key and helpful step for kickstarting progress. Because, while hard numbers do not inherently create the cultural change required of true diversity and inclusion, data can still help propel law firms along.??

Here are three steps for ensuring your organization can quantify its pathway to diversity.?

Step 1: Define diversity and set reasonable goals.?

The first thing legal teams should do with regard to diversity is admit they may not fully understand the problem. In order to define diversity and set reasonable goals, it’s crucial to have candid conversations with key stakeholders. Ideally, you should gather input from HR managers, outside counsel, and other clients of those law firms. Diversity consultants can be a great resource for holding these discussions.???

In such conversations, the first step is simply defining diversity. Diversity means different things to different people: race, gender, sexual orientation, disability, and minority- and women-owned enterprises (MWOBE) can all fall under the diversity umbrella. These definitions and focus areas should be shared and agreed to between organizations and law firm partners to ensure they can be measured. Reaching a common definition can also prevent organizations from working at cross purposes with other groups’ goals. The ABA has an incredible set of resources to guide goal setting and measurement including the model diversity standard that sets some great guideposts.??????

Goals should be set and understood by as many stakeholders as is feasible. To use a rowing analogy, if everyone rows as hard as they can but out-of-sync, the boat barely goes anywhere. If everyone rows less hard but all together, you can accomplish more. Make sure all groups are working under the same definition of diversity and with the same goals.?

Step 2: Measure against those goals.??

There are a number of ways to effectively measure diversity in an organization, starting with how work is allocated among employees. Diversity isn’t just about headcount. Legal teams need to look beyond simply having diverse timekeepers to consider how different employees are being used. Who gets the glamorous, high-value cases? Tracking the distribution of high-value tasks is also a way to measure diversity and inclusion.??

There are several other methods law firms can use to measure the success of their efforts. For example, they can also track origination and matter credits to ensure minority employees are represented in this key measure for future promotion and success. They should track equity vs. non-equity partners, as purchasers of legal services want to see how much of the business, in percentage terms, is owned by people from diverse backgrounds. Finally, it’s beneficial to track how much client contact the firm is giving to different types of diversity among associates at the firm. The closer an attorney is to the client relationship, the closer they are to power.??

Step 3: Act on those measurements.?

If CLDs don’t put pressure on outside counsel to improve their numbers, progress will be slow, if it happens at all. Corporate legal teams must be explicit about the numbers they want. Of course, organizations can only act on measurements if outside counsel provides information in easy to access, documented ways.??

I’m aware of one leading organization that even ranks its top 20 firms on diversity, applying the same algorithm to each of them to produce an overall diversity score. Outside counsel can then see where they stand among their peers. This strategy serves as a powerful motivator— no one wants to be number 20.?

It’s also good for CLDs to put their money where their mouths are. Some organizations hold back 5% of fees and release it only if diversity targets are hit, while others give bonuses for hitting targets. I’m a proponent of the latter, as reward is generally more effective than punishment.??

Diversity is associated with increased profitability in companies and law firms and brings the breadth of perspectives necessary to understand and compete in today’s global marketplace.? Inclusion takes diversity one step further. Both require more than simply hitting a quota. Quantifying progress can help further these efforts, especially if CLDs use hard numbers to hold outside counsel accountable.??