(Left to right): Ivan Fong, Pamela Daley, Elpidio Villarreal and Ben W. Heineman, Jr.
GENERAL ELECTRIC COMPANY can boast of bringing a lot of good things to life. And now it can add to that long list a diversity program that actually works. In one year, GE's legal department, one of the largest in the nation, increased the number of minorities by 43 percent. Not only that, GE has also taken concrete steps to increase the number of women and minority outside counsel working on its legal matters.
"We at GE believe that diversity is not just a moral imperative but a business necessity," says Ben W. Heineman, Jr., senior vice president, general counsel and secretary at GE. "I want GE legal to continue to drive our diversity initiative at full speed."
The company, which posted $129 billion in revenues in 2000, and double digit profits for the fourth quarter and all of the year, has placed significant emphasis on globalization, growth in services, e-Business, and diversity. With operations in more than 100 countries and more than 340,000 employees worldwide, having a diverse workforce gives it a clear strategic advantage.
"There's a lot of talent out there and it would be silly for a company like ours to ignore large segments of the population," says Pamela Daley, vice president and senior counsel for transactions at GE's headquarters in Fairfield, Connecticut. "We need the best people and there's a lot of talent among women and candidates of color. That's especially true among lawyers."
The company as a whole has run a successful diversity program for years. Drawing from lessons learned throughout the company, the GE legal department's own program has led to significant changes in the composition of in-house lawyers. From 1999 to 2000, the number of Hispanic attorneys jumped from 8 to 17, a 113 percent increase; Asian attorneys increased from 11 to 14, a 27 percent rise; and African- American attorneys rose 26 percent from 23 to 29. Of the 540 attorneys in GE's U.S. department, 60 are minorities, and 172 are women.
"Whatever GE does, it wants to be a leader," says Elpidio Villarreal, counsel-litigation and legal policy, and chair of the legal department's Diversity Council. "My mission is to make the diversity program the best in the country. This is keeping with the GE way of doing things. We are not a company that does anything in a halfhearted way."
While most companies are eager to implement a diversity plan, few go the next step and establish a metrics or measurement system to ensure it works. GE has gone that extra step. "Metrics is one thing among many that GE does very well," says Ivan Fong, senior counsel, ecommerce and information technology at GE, who joined the company in April. "Being able to track how we are doing makes a big difference."
With approximately 750 in-house lawyers worldwide, GE's senior legal management decided that the legal department should have its own diversity initiative and committee.
"GE is unique in its diversity program in that Ben [Heineman] and other top management are committed to promoting women and diversity at GE, whether its among in-house lawyers or its outside counsel," says Daley.
In 1999, the legal department formed the Diversity Council, with about 20 lawyers from each business unit from the head of human resources for legal and support to the head of GE's overall diversity program.
The committee met regularly and created a plan that included several initiatives and a metrics system to measure progress. The committee came up with one of the most comprehensive programs in the nation. In 2000, Villarreal began meeting with the company's recruiters, which numbered well over a dozen, to ensure that they understood GE's focus on diversity. Eventually, the company will rely on a limited number of recruiting companies to provide GE with a diverse slate of candidates.
The council then turned its focus inward. It sent out a survey to all in-house attorneys asking their input on what areas needed improvement. The survey also asked for ways to correct or change the company's programs. Upon reviewing responses from the surveys, Villarreal was surprised because the feedback indicated that "the number one thing that attorneys wanted was a mentoring program," he says. "All of our lawyers are senior level. We don't hire right out of law school, so I never thought that they'd want this at the top of the list. I'm glad we asked."
After some thought, however, it made sense. Many GE lawyers work in small groups associated with particular business units or they work alone. For instance, even though Fong's ecommerce division has 200 lawyers, he works out of the headquarters building in Fairfield, Connecticut, which only has only a few dozen lawyers. "Ninety percent of my interaction with other attorneys is through phone or email," says Fong.
Through mentoring, the attorneys hoped to have more contact with other attorneys, build a community, and receive more guidance. Villarreal says that in response to the survey, the Diversity Council moved the mentoring program higher on its priority list. Drawing upon the experiences from other parts of the company, it has just finalized the design of the program and is preparing to implement it.
"GE calls itself a boundaryless company, and there's a lot of truth to that," says Fong. "I've been impressed with how candid the business people are in meetings. They'll say we've tried five things, these worked and these didn't and here's why. When you have that kind of knowledge sharing going on other business units don't have to repeat mistakes. You get the best throughout the company."
Fong, who was previously a deputy associate attorney general at the U.S. Department of Justice and prior to that a partner at Covington & Burling in Washington, DC, who also served on the firm's diversity committee, says that mentoring is critical to retention. "In my past jobs, we've had mentoring programs with some combination of formal and informal elements," he says. "So much of it has to do with chemistry."
Daley also contributed her insights to the Diversity Council's mentoring proposal. Daley participated in a GE mentoring program two years ago that placed senior executives in a relationship with highly potential women and minorities. Daley is located in Fairfield, Connecticut. Her mentee worked in GE's Washington, DC office in state and government relations. "We talked once a month on the phone," says Daley. "She would describe what she was doing, what to do next." They also met face to face. "It's important for women to have exposure to senior people to learn style and presentation. For that kind of informal learning to occur, there must be a fit between mentor and mentee."
What Villarreal and the others learned from the other business units is that the mentoring program should be voluntary. Moreover, if a match doesn't work, there must be a way to exit gracefully. And, of course, there should be a way to measure its effectiveness. "We'll have both the mentor and the mentee evaluate each other," says Villarreal.
The Diversity Council put sharp teeth into the program early on, setting up a unique metrics or measuring program to track the department's success. "Keeping measurements in front of people focuses on results," says Daley. The department measures the number of women and minorities among the prospective candidates, offers made, current legal hires, new hires, direct reports, managers, and officers or senior executives.
The need to establish accountability was extended to the legal department's performance and compensation review. Each year, senior lawyers are evaluated, including their performance with their mentee, and hiring and promotions of women and minorities in their respective groups. "We do a self evaluation and a manager evaluates you," says Daley. "It's a very important component of our diversity program."
The teeth embedded in GE's diversity program also sunk General Electric into its vendors and service providers. The company asked its nine top-billing law firms to supply it with the number of billable hours by ethnicity and gender of attorneys assigned to GE's legal matters. The Diversity Council then compared the data that the firm reported to the National Association of Law Placement (NALP) and noted the discrepancy between who worked on GE's matters and the overall composition of the firm.
During the fall of 2000, Villarreal began meeting with the firms to talk about diversity and if there was a disparity between NALP's numbers and attorneys who worked on GE matters to find out the reasons for the gap. "I was initially concerned that our approach would be taken the wrong way," he says. "That we would be perceived as interfering. The response, however, has been very positive. I couldn't be more pleased."
Two firms in particular, Winston & Strawn (see sidebar) and Shearman & Sterling (see sidebar), put together comprehensive diversity programs. "These two firms in particular welcomed our input," says Villarreal. "Diversity was something they were wrestling with too."
Winston & Strawn decided that at the beginning of each new matter for GE, the pool of attorneys would include women and minorities. It also agreed to give GE a full report regarding the number and seniority of women and minority attorneys as well as the time devoted to GE matters by each attorney as a percentage of the total time spent by all Winston & Strawn attorneys on GE matters.
What's on the horizon for GE legal department's diversity program? That's easy: more diversity. Remember, "We don't do anything halfheartedly," says Villarreal. But there are interesting challenges ahead, including tackling diversity on a global scale.
"We need to think about meshing diversity with the global nature of the company," says Fong. "We hire people in Europe and Asia, but our diversity effort is U.S. centric. To truly become a global company, we have to expand our notion of diversity. And when you are talking about offices in Europe, Asia, and Latin America, you need to think, what do you mean by diversity?"
One consideration on the burner is to implement exchange programs where U.S. attorneys swap places with attorneys in Europe or other countries for three to six months. "That would lead to enrichment on both sides," adds Fong. "You'd have different backgrounds, which bring different and better insights to the work we do."
When challenged by the General Electric Company, Shearman & Sterling was already one step ahead.
Since 1992, the firm has had a diversity committee that has focused on recruiting, retaining, and promoting associates of color as well as other differences among the associate population. It has also run a joint scholarship program with the NAACP Legal Defense and Educational Fund, awarding scholarships to assist talented students to go to law school. Finally, since 1991 the firm has been a signatory of the Association of the Bar of the City of New York "Statement of Goals of New York Law Firms and Corporate Legal Departments Increasing Minority Representation and Retention."
In September, when the firm's representatives met with GE's lawyers, it had already made a significant investment in enhancing diversity: it had hired a diversity management attorney,Anna Brown, whose full-time job is to promote diversity at the firm.
"GE's efforts complemented our efforts in a positive way," says Denise Grant, who serves as co-chair of the diversity committee and became the first black partner at the firm in 1998. "GE's efforts give us the opportunity to collaborate with one of our outstanding clients in the area of diversity."
Since GE's challenge, Shearman & Sterling has stepped up its efforts to enhance diversity. In September, when Brown came onboard, the firm launched its "Global Diversity Initiative."
"As the firm becomes more global, we want to make sure that we celebrate and value the differences among our lawyers within and also outside the U.S.," says Brown, who after graduating from law school, was an associate at Shearman from 1990 to 1995 and then left to become associate general counsel at Continuum Health Partners, a healthcare company in New York. The Global Diversity Initiative is supported by the Diversity Committee, which is made up of 10 partners, 8 associates, and Brown. They meet on a quarterly basis.
Brown, along with Grant and William Hirschberg, a senior partner at Shearman and co-chair of the Diversity Committee, are speaking with partners about the effort, making presentations to the entire partnership and smaller groups. "We are working to get everyone signed up and involved in the effort," says Grant.
To fulfill GE's demand, the firm now makes sure that GE's matters are staffed with a diverse slate of attorneys. "When a client like GE makes diversity a priority, it makes the issue even more significant for us," says Brown.
What's on the horizon? The firm is working with GE and the New York bar associations to come up with different ways to enhance diversity in the legal community. "We intend to take a proactive role in collaborating with our clients in the area of diversity," says Grant.
The firm is also designing a benchmark system to measure its success. "We will measure and monitor all of our different efforts to enhance diversity," says Brown. Shearman is also redesigning its mentoring program to make it stronger.
When General Electric Company challenged its top-billing outside law firms to improve their track record on diversity, a few firms went beyond the company's expectations.
Winston & Strawn has doubled the number of minority attorneys from 11 in 1999 to 24 in 2000. In 2000, minorities represented 13 percent of all new hires. Between 1998 and 2000, the number of partners of color increased from two to five.
"Promoting diversity is the right thing to do," says Jane DiRenzo Pigott, head of the environmental law department at Winston & Strawn in Chicago.
In response to GE's challenge, Winston & Strawn vowed to include women and minorities of color within the pool of attorneys considered to staff GE's matters. The firm pledged to compile and report to GE the number of senior women and minorities assigned to GE matters. In addition, the firm kept track of the time allocated to GE matters by these attorneys as a percentage of the total time spent by all Winston & Strawn attorneys. The firm, through its Diversity Initiatives, agreed to conduct an annual review of the GE/Winston & Strawn diversity program and meet with firm leaders to discuss the results. Finally, the firm pledged to model GE's legal department diversity program.
While Winston & Strawn's response to GE was truly exemplary, in truth, the firm was just continuing along a path it had carved out years ago. In 1996, the firm established the "Women's Initiative," to help retain and promote women in the firm.
The Women's Initiative began with a conference, the Women's Business Development Conference, which brought together all women partners and associates from the firms' offices to discuss retention and promotion issues. Another conference is planned for March 2001. From the conference, the initiative was formed. Since then, the initiative has addressed maternity leave, family leave, and part-time work arrangements for associates.
The firm adopted a policy that part-time work did not preclude an associate from becoming partner. It also established the Backup Child Care Program in New York and other offices, providing childcare to its attorneys. It didn't take long for the Women's Initiative to discover that many of its issues also affected attorneys of color.
The committee changed its name to the "Diversity Initiative" and had twenty-five attorneys from each of the firm's offices, including the managing partner, the partner responsible for recruiting, three members of the firm's executive committee, and two department heads. The committee, which meets monthly, set out to eliminate barriers to diversity in the firm; implement best management practices with regard to diversity; and develop a metrics system to evaluate the effectiveness of its program.
Already the firm has diversified its key policy-setting committees, such as hiring and compensation. It has also tied its evaluation of partners to their efforts to promote diversity. Like GE, the firm asked its recruiters to send the firm a diverse pool of candidates.
From the March 2001 issue of Diversity & The Bar®