General Counsel: (L to R) Wayne Budd, John Hancock Financial Services; Rosemary Berkery, Merrill Lynch; and Don Kempf, Morgan Stanley
Wall Street. That frenetically-paced, challenging world of finance, where millions are made and lost in minutes, where the world shakes hands daily, and where, until recently, the upper echelons of senior management were overwhelmingly pin-striped, attaché-cased Caucasian men. Yet, over the last decade the financial services industry has undergone significant change with regard to diversity. More women and people of color can now be counted among managers, executive officers, and general counsel.
The rise of minority and women investors, increase of global businesses as some of the most rapidly expanding client-bases for the industry, and the simultaneous increase of women and minority JDs and MBAs competing successfully for key positions are partially responsible for this change.
Highlighted here are four financial service industry leaders: John Hancock Financial Services, Morgan Stanley, J.P. Morgan Chase & Co., and Merrill Lynch. Each has chosen to take a more bullish approach when it comes to diversity. We spoke with each general counsel to determine their views and approaches to corporate law departments' diversity challenges, and to garner advice for aspiring attorneys interested in the industry.
John Hancock Financial Services
John Hancock Financial Services
In 2000, John Hancock Financial Services appointed Wayne Budd as the executive vice president and general counsel, making it one of only 26 Fortune 500 companies that is headed by a person of color. Wayne Budd, in turn, made John Hancock's law department one of the most impressive examples of successful diversity strategizing.
To date, 54 percent of the department's attorneys are women and minorities. Of Budd's two deputy counsels, one is a woman. Of the sector's seven divisions, African- Americans head two. "Both I and the leadership team at John Hancock have made diversity a priority in the law sector," says Budd, noting that the creation of an inclusive environment in the workplace allows them to successfully compete in the marketplace.
Internally, the company employs traditional diversity programs, such as corporate mentoring and mandatory diversity training for all new associates. On the not-so-traditional front are efforts like John Hancock's 12-year- old, on-site Child Care Center. The Center, which is open to the company's associates, offers company-subsidized tuition that is scaled based on a family's combined income. The effort is but one example of how John Hancock identifies and responds to the real-life demands facing its diverse workforce.
"You can [however] recognize more noticeable progress in our external efforts," says Budd. "Our use of [outside counsel] of color has increased by 500 percent since I have been here-which is not to say that we are satisfied with where we are now. We still think we have a way to go."
Budd's department makes a semi-annual request for its outside counsels' diversity profiles and descriptions of any programs designed to recruit and retain attorneys that are women and/or people of color. "We request these attorneys whenever possible because it gives them good opportunities and great experience," explains Budd.
The department also maintains a partnership with Nixon & Peabody, LLC, whereby the firm's summer associates work at John Hancock for a given number of weeks. "[The partnership] offers valuable experience to women and minority attorneys, making them greater assets to the legal community," he states.
The legal team also has a number of community service involvements in the Greater Boston area. For example, department attorneys serve as active mentors, bringing middle school students to the offices for simulated law school. "I had the benefit of great mentors that were helpful to me throughout my career and I think it is only fair to pass that along," says Budd.
John Hancock's efforts are purposely multifaceted. "This industry is specialized and specific. [Diversity within it] will remain a problematic issue until attorneys of color gain some expertise in the area," states Budd. He advises attorneys to recognize and build upon their skills regardless of their level or position. "As lawyers, we develop certain skills no matter where we are..leadership, good judgment, decision-making- these skills are all transferable."
With more than 700 offices in 28 countries, Morgan Stanley takes a progressive approach to diversity issues. The company's handbook, "Diversity: Life Is What You Make It," reads: "To maintain our position of leadership, we continually seek the broadest knowledge possible of the global markets in which we operate. Our workforce must consist of the most talented and creative individuals who represent a cross-section of our global community."
Philip Purcell, the company's CEO and chairman, is a strong advocate for diversity. Under his direction, in 2000 Morgan Stanley gave more than $37 million to charitable institutions, including such special interest organizations as the Anti-Defamation League. The company also sponsors annual Women's and Multicultural Business Exchange forums as part of career development programs for its female and minority employees.
Taking his cue from Purcell, Don Kempf, executive vice president and general counsel, formed an internal Diversity Committee to focus on recruitment and retention issues within his legal department. He is also active in the Association of the Bar of the City of New York, where he is the current chair of its Committee to Enhance Diversity in the Profession.
"Before I joined Morgan Stanley, I spent a lot of time recruiting minority attorneys," says Kempf. "I scoured the sourcebooks and dropped candidates notes asking them to stop by when I was on-campus," he explains. "I would additionally call minority students, once again encouraging them to stop by." These minor extra steps went a long way in securing top candidates, and Kempf applies such tactics within his present department as well.
A separate committee pairs new associates with mentors, whose job it is to provide career guidance. "We give people every opportunity to succeed," says Kempf. "They generally feel good about this effort. Across the board, I think we recognize that this is good for all of us and we see the importance in this field for it."
Kempf has observed a disparity between the rise of women through the ranks versus that of minorities. "A generation ago, five percent of law school graduates were women. Now roughly 50 percent are women," remarks Kempf. It comes as no surprise to Kempf that there are more women in senior positions: "When given the chance, women distinguish themselves for employers."
Racial minorities, by virtue of their numeric make up, are a different case. "If only 5 to 10 percent of the graduating body are African-American, this makes it that much harder to compete for candidates," says Kempf. "In my own view, there seems to be a high demand for minority attorneys. Everyone is seeking to recruit and retain them. It is an on-going and real challenge."
To aspiring attorneys, Kempf says, "The highest compliment to a lawyer is to say that he or she is a good associate." While the tendency is to want to rush onward and upward, Kempf cautions against this temptation, saying instead, "Your building blocks are the most important key to success. Nurture them. The opportunities will take care of themselves."
J.P. Morgan Chase & Co.
J.P. Morgan Chase & Co.
"My anecdotal impression is that a decade ago progress had been made in other parts of corporate America and the financial services industry was lagging far behind," says Bill McDavid, general counsel. "Now, I feel like we have made great strides and have significantly shrunk the gap between us and other industries." McDavid continues, "Many of the innovative programs JPMorgan Chase and predecessor firms have had in place – including Diversity Councils, mentoring and reverse mentoring programs, career development opportunities, Supplier Diversity initiatives, and so on – are showing great results, both in terms of the diversity within the corporate departments, and the attention that is being paid to diversity within the firms that service JPMorgan Chase."
Bill McDavid has more than 20 years of experience in the financial services industry informing his impression. In 1990, observes McDavid, "There still were few diversity programs in place.and little effort to help people of color and women identify opportunities and to succeed."
Even in the early 1990s, when larger numbers of graduates from business and corporate finance programs were women, "You would often have extremely smart, competent women, but they would rarely make it to the top," recalls McDavid. "Women were doing great things as middle-managers, but there seemed to be a glass ceiling." In contrast, McDavid now points to J.P. Morgan Chase & Co., Merrill Lynch, Citigroup, American Express, and elsewhere for examples of minorities and women in the senior most positions of their companies.
"At JPMorgan Chase, our Chief Financial Officer, Dina Dublon, is a woman and the Chairman and CEO of JPMorgan Private Bank, Maria Elena Lagomasino, is a Hispanic woman," states McDavid. Fifty percent of the legal department and one-third of all senior partners and senior managers in the legal department are women.
McDavid explains that while advances for African Americans, Asians and Latinos exist, the demographics are still not where we want them to be, particularly at the top levels.
Numerous mergers at J.P. Morgan Chase & Co. have made senior-level change difficult. The legal department has done little recruiting outside of the company for senior hires in 12 years, instead retaining senior managers from the former heritage companies.
According to McDavid, "There hasn't been sufficient diversity in terms of lawyers of color in the legal groups we've inherited." To counter this, the legal department makes a concerted effort to fill junior positions with lawyers of color, with the goal of having these attorneys advance. Even hiring attorneys of color, however, has been difficult. As in-house counsel for a financial company, the department recruits attorneys almost exclusively from law firms, and rarely with less than four years experience. It is always trying to recruit lawyers of partner-caliber. "This can be challenging for us because nowadays the top law firms are trying desperately to keep their talented lawyers of color," states McDavid.
Along with career development opportunities and mentoring, the company maintains a Supplier Diversity Program that tracks the diversity profile of outside counsel requesting that people of color and women work on their legal matters, where appropriate, and which also tracks JPMorgan Chase's work with under represented- and women-owned law firms.
McDavid's advice for all up and coming lawyers is, "Do your job, whatever it is, in an outstanding way that gets you noticed by others." To lawyers of color and other underrepresented groups-the message is to be assured that the financial services industry generally and their legal departments, starting with JPMorgan Chase, recognize and are acting on the opportunities to further their careers.
Merrill Lynch is one of the largest diversified financial services firms on Wall Street, which makes the diversity within their executive leadership ever more visible and impressive. Two obvious examples are Chief Executive Officer, Stan O'Neal, and General Counsel, Rosemary Berkery, an African-American man and a Caucasian woman, respectively, although they are not alone in the diversity of the firm's management ranks.
This symbolic commitment to diversity resonates throughout the company at every level and in every department, and links strongly to Merrill Lynch's leadership as a global financial services company. Its focus increasingly shifted to matters of gender and race, as the company grew more global in scope. "Our client base is incredibly diverse," says Berkery, "Tokyo, New York, London, Buenos Aires, as well as individuals, corporate clients, institutions and governments. We have become," she continues, "more diverse over the last decade.and we find that to best serve [our clients] it is helpful to have a diverse employee population."
Berkery recently sent core outside counsel a letter outlining Merrill Lynch's diversity objectives, asking for each firm's diversity strategies and requesting that Merrill Lynch matters be staffed with minority attorneys.
"We call it 'shared values.' We set our expectations from the beginning," remarks Berkery. The purpose is to promote diversity amongst their outside counsel while simultaneously giving diversity candidates direct experience in the financial services industry.
Merrill Lynch's law department also established an "externship" program designed to reach a diverse law school population. Utilizing relationships with law schools in the metro area, the department selects six students to spend several hours a week in Merrill Lynch's law department. "The students get school credits, training and hands-on experience," describes Berkery. "It makes them very attractive to legal firms and other potential employers." In some instances, the department has further extended itself by personally recommending outstanding "externs" to potential employers that students may not have been able to get interviews with if not for the Merrill Lynch experience.
The law department boasts a Diversity Committee that studies issues of diversity raised by the committee or by any professional. Subcommittees tackle issues pertaining to recruitment, retention and development, and outreach.
The latter includes sponsorship and participation in external diversity efforts-for example, the National Bar Association's Corporate Council Forum, where members of the department networked with law firms marketing themselves under the diversity banner, eventuating in new business relationships with minority-owned businesses. Outreach also includes Merrill Lynch's relationship with MCCA®.
"We were the first in the financial services industry to join MCCA, and we hosted the first-ever industry-specific General Counsel Roundtable," recounts Berkery. Indeed, 12 general counsel from leading Wall Street investment firms and exchanges attended the roundtable and reviewed Diversity Best Practices. The discussion allowed participants the opportunity to assess their diversity efforts, identify any problems inhibiting the success of such programs and develop plans to overcome these challenges.
Berkery advises young lawyers to do the best job possible, to be seen as a leader actively and aggressively working with others to arrive at the best possible solution. She also says to be open to career moves, particularly those that may increase your learning curve and give you experience that you may not have had before.
Alea J. Mitchell worked for MCCA as a summer intern upon her graduation from Wesleyan. She is now employed at D'Arcy Advertising in New York City and is the Features Editor for Diversity & the Bar® magazine.
From the January/February 2003 issue of Diversity & The Bar®