The Human Rights Campaign's Corporate Equality Index: Are You Prepared to Know the Score?
By Robert Falk
It's time for a pop quiz. Please open your favorite word processor and record your answers to the following questions. Please begin:
That's it. Please remove your hands from your keyboards.
Class, how are we feeling about the quiz? Oh, you want to have a bit more of a review before the final exam? That's fine. Here we go.
The Basics of Rating Businesses on Their Policies Toward LGBT Employees
The Human Rights Campaign (HRC) is the nation’s largest advocacy organization dedicated to improving the lives of lesbian, gay, bisexual, and transgender (LGBT) individuals. The organization has more than 725,000 members and supporters around the country. Its publication Equality, with an annual circulation of almost 1.3 million issues, is the most widely read LGBT title in the nation. With daily video updates, newsletters, a daily blog, and 56 million email updates per year, HRC has positioned itself as one of the chief news sources for LGBT consumers and business people in the United States.
The Human Rights Campaign Foundation (HRC's 501(c)(3) educational arm) administers the annual Corporate Equality Index (CEI) and the Best Places to Work survey. Released each fall, the CEI provides an in-depth analysis and rating of large U.S. employers with regard to their policies and practices pertinent to LGBT employees, consumers, and investors.
First created in 2002, the CEI rates employers on a scale of 0 to 100% based on several key criteria that define corporate social responsibility in this area. In that first year, the CEI rated 319 companies, of which 13 rated 100%. By 2008, those numbers had grown to 583 businesses rated and 260 with perfect ratings.
Since 2006, HRC has made a concerted effort to reach out to large law firms. By 2008, 115 of American Lawyer magazine’s top 200 law firms were rated, 62 of which earned a 100% rating, and an additional 45 firms scored 80% or better. Of Fortune magazine’s 500 largest corporations, 272 were rated, 120 of which earned a 100% rating; of the 100 largest, 52 of the 82 participants earned a 100% rating. For major law firms and corporations, inclusive and fair practices for LGBT employees have increasingly become the norm.
The Value of Participation
In-house counsel report that they do pay attention to ratings when evaluating firms under consideration for their business, and HRC-rated law firms report that they receive positive feedback from their clients. Wayne Sobon, associate general counsel and director of intellectual property for Accenture, reports that it's extremely helpful that the CEI has been expanding the ratings of major law firms. "As a signatory to the Call to Action, Accenture is committed to diversity," he explains. "The CEI report is a tool that will help us examine where our existing legal vendors stand. It will also allow us to approach those firms who have room for improvement, so we can open up the dialogue around opportunities for advancement."
Charlie Berardesco, senior vice president and general counsel of Constellation Energy Group, reports that, as a matter of course, he looks at the CEI annually to see the scores earned by the firms that he uses on a regular basis. For him, a law firm's commitment to diversity is a factor that he considers in determining whether to engage a firm in the first place, or whether the firm receives referrals for new matters.
Other in-house law departments use the CEI as a tool for initiating dialogue with their outside counsel. Phillip Wells, senior vice president and general counsel of the Compass Group, relates that in his annual review of the CEI, he noticed that one of the national firms with which his company did a great deal of business scored poorly on the CEI. Upon further research, he also found the firm rated poorly for issues affecting women and other minority groups. He called the engagement partner at the firm and expressed his extreme concern regarding their performance. Within three years of that conversation, the firm dramatically improved its score on the CEI and other measures of diversity. Wells states that the CEI will be one of the metrics that his company will use in evaluating outside firms in 2009, and in holding them accountable for results.
Some in-house counsel use the CEI for evaluation purposes. Kent Crowl, senior legal counsel and co-chair of Shell Oil Company's diversity council, explains, "We will be using the CEI this year as part of our diversity conversation with our outside counsel. The CEI gives us a readily available metric on how our vendors our doing in this arena, how they are doing in comparison with their competitors, and how much they value inclusiveness. Given that Shell scored 100 on the CEI, we are interested in law firms that share our values."
Barbara Berish Brown, chair of Paul Hastings' Washington, D.C., office, notes that her firm participates in the CEI because diversity is an important part of the firm's culture and it helps her firm attract and retain exceptional attorneys. She states, however, that she is "always pleasantly surprised when my clients come to me and express their appreciation for our 100% score. It shows that they are paying attention to the CEI report."
Taking the Participation Step
Who Can Participate?
Businesses with more than 500 full-time employees are eligible to participate in the CEI. For law firms, this includes partners, associates, and other full-time employees. In March of each year, HRC reaches out to more than 1,500 businesses (including the AmLaw 200 law firms) by both email and regular mail, and invites them to participate in the annual survey process. The survey is conducted entirely online, and firms can create drafts of responses, store them, and release them at later dates.
Firms that have not received a formal invitation to participate, or firms that are concerned that they have not yet been contacted to participate, may send an email to CEI@HRC.org to get more information about how to participate.
How Are Firms Rated?
Firms are rated on their policies and practices in six different areas. The CEI tracks the following categories and their associated points.
Corporations or law firms with questions about establishing or evaluating best practices or policies do not need to conduct the work alone. HRC's Workplace Project staff have worked with law firm diversity managers and partnership committees, as well as with LGBT attorneys, to develop fair policies at many of the nation's most prestigious firms.
Samir Luther, senior manager of HRC's Workplace Project, reports that, although many law firms new to the CEI may be initially apprehensive about participating, those firms often become much more comfortable as a result of working with the HRC project team. The project has worked closely with in-house counsel at Fortune 1000 companies and AmLaw 200 firms alike to develop sample policies and guidelines that can be accessed directly from the web-based survey. The CEI project staff have extensive experience tailoring resources to a firm's specific needs. Luther states, "Several firms have reached out to us later in the process to find that they may be 'recreating the wheel,' rather than improving it-we're happy to meet firms where they're at to provide an initial overview of the process, and how best to prioritize CEI criteria versus needs internal to the firm."
Firms may start the survey process in March, conduct a gap analysis, and implement new policies and procedures before the survey closes in June. Consequently, firms that are new to the CEI survey process can benefit from starting their plans early.
For additional information about the HRC, the CEI, or other programs, please contact Samir Luther at firstname.lastname@example.org.
Robert Falk is the general counsel for the Human Rights Campaign and the Human Rights Campaign Foundation.
From the March/April 2009 issue of Diversity & The Bar®