BigLaw Needs a Diversity Hack
Because innovation and diversity go together like peas and carrots
The legal profession is finally at an inflection point.
At the time of this writing, there are 899 legal startups on AngelList, with an average valuation of $4.1M. A veritable tech revolution continues to redefine how we practice law. Technology has given lawyers the gift of document automation and visualized legal search, while the specter of Watson and machine learning pushes us to contemplate existential questions about our chosen line of work. (Are we human? Or are we dancers?) As new entrants like Axiom and Riverview challenge the incumbent AmLaw firms — and our clients — to reconsider the humdrum outside counsel model, tech-focused startups like Lawdingo and Lawkick are redefining how individual consumers and solo practitioners connect to buy and sell legal services.
So, change is happening — but to what end?
Recently, Seyfarth’s longtime chairman and fearless leader Steve Poor has been writing and speaking about the need to close what he calls “the value gap,” which he defines as the gap between the value legal providers believe they are offering and the value purchasers perceive they are receiving.
I agree. As a partner at Seyfarth, where we believe we are building the law firm of the future, I am fortunate to have a front-row seat to what I see as a sea-change in our industry, and have experienced firsthand the capacity of new ideas creating greater value for our clients.
Steve’s discussion of the value gap, however, prompted me to share my reaction: I posit that we have a second and different gap in the industry that also requires systemic change — a people gap. That is, a gap between the demographics of the wide world around us, and the world within the law. Closing the people gap has powerful potential to help close the value gap — by delivering higher value to our clients.
The “people gap,” by the numbers
Like many industries, the makeup of the legal industry fails to reflect the makeup of the wider world around us. Across the profession, and at all levels, the profession suffers from a lack of diversity, starting from the halls of our academic institutions, continuing across the talent pipeline in private practice, to top-level leadership in legal organizations and on the bench.
A 2014 article in Harvard Business Review provides a grim snapshot of the reality for women in law:
“[n]o area of the business world is more illogically gender imbalanced than law firms. Every year, top law firms recruit 60% female and 40% male law graduates into their practices. Within two years, their female majorities begin to leave. The percentage of female equity partners is now 17% in the top 100 US law firms.”
People of color, those who identify LGBT and disabled populations lag even further behind. The statistics are particularly alarming for attorneys of color. According to the American Lawyer, the number of minority attorneys working in BigLaw has not significantly changed since 2008 and has reached only 14.4% in 2014. This number falls far below the estimated 37% of racial or ethnic minorities in the U.S. The numbers for BigLaw partnerships are worse. Only 7.7% of both equity and non-equity partners are minority, with some BigLaw firms reporting no minority equity partners, or no minority partners at all.
Put simply: we have systemically failed to welcome diverse people into the profession in ways that would allow those people to thrive and rise within it. Firms are now making great investments in diversity programs to address the people gap, but progress is slow as the numbers demonstrate.
The power of differences
We don’t often talk about why we strive for diversity in the workplace — perhaps because equality of opportunity is embedded within the social contract or (thankfully) because social norms have progressed far enough that we don’t need to defend diversity as an idea. In my own work as Seyfarth’s National Co-Chair for Diversity & Inclusion, I’m often focused on practical matters: ways and means to drive greater diversity and inclusion, or to raise awareness about resources and communities available to diverse attorneys in our organization and in the profession. While a focus on action is important, I want to take a step back just for a moment and talk about why diversity and inclusion matter in our profession, and in BigLaw specifically.
Studies show that diverse teams breed innovation. When a group of people looks the same, acts the same and thinks the same, they can fail to embrace, or even produce, innovative and unconventional ideas. (Seriously, here’s more evidence, in a fascinating read in the Scientific American, to support the notion that “Diversity Makes Us Smarter.”)
The idea of “2-D diversity” — which combines inherent traits such as gender, ethnicity and sexual orientation, with diversity of acquired experience, skills and education — seems especially relevant to the current needs of the legal profession.
Imagine the innovation firepower of a cross-functional, multi-disciplinary team of lawyers, project managers and technologists that is also cross-cultural.
In fact, extensive research by the Center for Talent Innovation provides compelling evidence that this kind of diversity is good for business:
“By correlating diversity in leadership with market outcomes as reported by respondents, we learned that companies with 2-D diversity out-innovate and out-perform others. Employees at these companies are 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market.”
If our goal is to deliver higher value to consumers of legal services, and if we want to change the profession to meet this goal, closing the people gap is clearly a critical step to success. It’s not just science — many clients agree, and many of them are voting with their dollars to ask for the change they want to see. Similar to how global companies have used the reach of their global supply chain to drive conflict-free sourcing, law departments are using their purchasing power to demand diversity from their outside counsel. Increased structure in legal buy processes, growing reliance on data to measure provider performance, and the trend toward convergence have all created opportunity for law departments to hold their outside firms accountable.
BigLaw — especially the firms committing to real value innovation — must embrace the power of differences: not only because it’s the right thing to do, period, but also because it delivers higher value to clients.
A call to action for innovators: build a virtuous cycle
So, in a profession that has awakened to the idea of creating change to bring greater value to our clients, why is there not a louder call to action demanding that we address this people gap? Where is the dialogue about how diversity and inclusion can create greater innovation for our industry?
To all of you legal innovators — you leaders, doers, creatives, design thinkers, project managers and technophiles alike — I issue an open invitation: let’s come together to devise creative, systemic solutions to close the entrenched people gap. You have an opportunity to contribute your talents to build a better ecosystem for innovation, one that will spur greater creativity and give rise to more and better ideas.
I have some ideas to get you started: How might we help corporate law departments better leverage their buying power to drive greater diversity in their vendor firms? Could we establish a universal, shared data pool to measure and benchmark diversity and inclusion efforts? Without a comprehensive set of measurements, organizations define success (and failure) independently.
Connecting communities
I also encourage the community of legal innovators to reach out and get to know diversity-focused partners and affinity groups in this industry. There are legal diversity organizations who have been focused on systemic change for many years, long before the recent calls for “disruption” and “innovation” gained traction in the industry as a whole. To refer back to the science supporting the effectiveness of diverse teams, imagine what a diverse group we could pull together.
Here is a list of just a few of Seyfarth’s key diversity partners, any of whom would be happy to hear from those willing to combat the people gap in innovative and tech-enabled ways:
- California Minority Counsel Program
- Minority Corporate Counsel Association
- Leadership Council for Legal Diversity
- National LGBT Bar Association
- Hispanic National Bar Association
- National Bar Association
- National Asian Pacific American Bar Association
BigLaw could certainly use a diversity hack — maybe we should start off with a hackathon.
