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November 2012 (To print, click the print icon on your browser
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Election Illustrates Business Case for Diversity

The post-election coverage saw pundits of all stripes agree that the outcome of the election was swayed by a diverse coalition that included women, ethnic and racial minorities, blue-collar whites and voters for whom LGBT equality mattered. Rarely has the "business case" for diversity been made with such stunning clarity.

The day after the election, when asked to describe the most important lesson from the results, former Republican National Committee Chairman Michael Steele said, "50,000 Latinos turn 18 every month in America. What are [Republicans] going to do about that?" His question hinted at potential future electoral failures resulting from an inadequately diverse base. On the same program, National Urban League President Marc Morial said the election illustrated that "coalition politics will rule the 21st century." Commentators from disparate political perspectives, from the Reverend Al Sharpton and Rachel Maddow to Karl Rove and Louisiana Governor Bobby Jindal, acknowledged the diversity of the coalition that re-elected the president.

This rare, bipartisan and full-throated acknowledgment of the advantage and importance of diversity and inclusion is a welcome and encouraging development. I am hopeful that it will emphatically demonstrate what many have argued for years, and which is well supported by empirical data. Inclusiveness is a strength; diverse groups produce better results; and inclusion and excellence are not mutually exclusive. This point is well illustrated by a 2011 study by Catalyst entitled "The Bottom Line: Corporate Performance and Women's Representation on Boards." The study demonstrated that increased board diversity correlated to a proportionate increase in profitability. My hope is that the increased recognition of the power of diversity will be the clarion call for which the legal profession has been waiting.

Numbers alone haven't sufficiently awakened the legal community. According to a 2010 Bureau of Labor Statistics report, the legal profession remains the least diverse white-collar profession. Racial and ethnic minorities comprise 11.6 percent of all lawyers. Surprisingly, this number is below the percentage of minorities that comprise chief executive officers (11.7 percent). Much like the American electorate, corporate clients — especially at the decision-making level — are becoming more diverse. They expect tangible results on diversity from their outside firms because their interactions with legislators, regulatory bodies and customers mirror the diverse electorate that revealed its complexity and strength on November 6.

Each year, the Minority Corporate Counsel Association (MCCA) releases its annual general counsel survey of the 1,000 largest companies. According to this year's survey, the number of women general counsel grew from 44 in 1999 to 108 in 2011, with 23 being added in the last year alone. The number of minority GCs in the Fortune 500 also increased, reaching 9 percent in 2011, the highest percentage in the 13-year history of the survey.

IN-HOUSE INITIATIVES

Last year, MCCA also conducted a first-of-its-kind research study entitled "A Comprehensive Examination of Diversity Demographics, Initiatives and Policies in Corporate Legal Departments." A total of 765 corporate law departments were surveyed in order to assess the demographic makeup of in-house legal teams, explore the types and efficacy of in-house diversity programs, and most importantly, determine the expectations corporate clients have of outside counsel.

Overall, 30 percent of legal departments reported having some initiative to increase diversity and inclusion. The larger the department, the more likely they were to have a program in place. For example, 87 percent of respondents with more than 75 attorneys have initiatives to increase diversity.

Thirty-one percent of the legal departments of 11 to 25 attorneys reported having special outreach or recruiting efforts to attract racial/ethnic minority attorneys, while departments of 26 to 75 and 76 or more attorneys reported having these outreach efforts in place at much higher percentages, 52 and 74 percent respectively. Most telling is that 77 percent of the largest corporate law departments track the diversity efforts of their outside law firms and 54 percent track the hours billed by diverse attorneys in outside firms.

For many firms, the lack of urgency on diversity has been based upon the belief that few large corporate clients were serious about diversity, and that fewer still were willing to hold their outside counsel accountable for making meaningful progress on diversity and inclusion. This study indicates that this belief is mistaken. Soon client demands regarding diversity will be to law firms what voter demographics are to the 2012 post-election discourse: a game-changing realization.

This year's MCCA/Vault firm demographic survey shows that only 6.6 percent of large-firm equity partners are minorities, a number that has remained flat, and actually dipped slightly over the past several years. Although minorities made up only 14.1 percent of attorneys at large law firms in 2011, they represented 19.4 percent of those who left their firms either voluntarily or involuntarily.

Fully 76 percent of minority women who are now in-house began their careers in law firms. Of that number, 81 percent reported being subjected to nonsupportive, isolating or hostile work environments, as well as being denied mentoring and client-development opportunities.

If the demographic changes shown by the election are any indication, firms need to renew their efforts to attract and retain a more diverse work force. They should solicit as much information as possible from both existing and potential clients about those clients' internal diversity programs and the extent to which the clients have expectations of their outside counsel. Law firms must endeavor to shape their own diversity programs around those expectations, even to the point of offering to assist clients in the development of their own programs. Most importantly, firms should ensure that the environments into which they recruit diverse lawyers are inclusive for everyone.

My post-election optimism was tempered by a story I read that was not related to either politics or the law. Eugene Brazley, a highly prized high school football recruit from powerhouse Carver High School in New Orleans, had committed to play at the University of Mississippi. He was stunned to read accounts of race riots, complete with racial slurs and burning effigies of the president, on the campus following President Obama's re-election. Brazley chose Ole Miss because he wanted to play close to home and he believed a Southeastern Conference school would give him the best opportunity at the National Football League. Now, he's considering changing his commitment to Arizona State. Other star recruits to Ole Miss, in this 50th anniversary year of James Meredith's tumultuous admission, are considering decommitting as well.

If the 2012 election is any indication, politicians aren't the only ones who may find themselves crushed by the combined weight of demographic inevitability and constituencies that are increasingly cognizant of diversity and inclusion.

Joseph West is president and chief executive officer of the Minority Corporate Counsel Association. This article first appeared in the National Law Journal. Reprinted with permission from the 11.19.2012 edition of The National Law Journal ©2012 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.

 

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