Leverage data to make meaningful change: a recap of Consero 2022’s “Diversity, Equity, and Inclusion in the Law” discussion

Diversity of outside counsel and vendors is important to in-house counsel but the path to achieving improved diversity contains two major hurdles: (1) the difficulty of collecting data to track diversity of outside counsel and (2) the challenge of framing the subsequent conversations with outside counsel to drive change.

Addressing these challenges was the topic of a recent panel discussion at the Consero Legal Operations Forum moderated by SimpleLegal Director of ELM Sales, Karen Moor. Panelists included Jeff Aschbrenner (Amgen), Misha De Larkin (Flex), LaTrece Johnson (Palo Alto Networks), and Hilary Sledge-Sarnor (MUFG Union Bank).

Why is diversity important to in-house counsel?

Moor kicked off the discussion by asking the panelists why legal departments care about the diversity of timekeepers in their outside firms. The panelists agreed that diversity is important because, as articulated by Delarkin, “Each of us have different world views and perspectives and we bring those into conversation to bring better or different ideas than would have been thought of by sitting in a group that looks just like us.”

The panelists also agreed that the spend power wielded by in-house counsel gives them the unique ability to effectuate change. Sledge-Sarnor stated because of this power, “We can have difficult conversations with law firm managing partners letting them know that we want teams that reflect our societies.”

The audience was polled as to whether they are collecting DE&I information from their outside counsel and half said they were.

How can in-house counsel drive diversity initiatives?

While half the audience is collecting DE&I data, very few of those audience members are having conversations with their law firms about that data. For the panel, this was a problem. Per Johnson, “We need to ask ‘why we aren’t seeing those diverse timekeepers on matters?’ We need to push back and demand accountability.”

Moor then asked the panel how they can encourage diversity in our outside counsel. Aschbrenner said his company sent surveys to their outside counsel seeking DE&I information. He said that some declined to share that information claiming it was a privacy issue. Aschbrenner noted that this excuse was not compelling to his in-house team as they know there are ways to share that information that do not infringe on privacy rights. “Our DE&I counsel internally aren’t going to accept that easy out.”

At MUFG Union Bank, they collect data on outside counsel and use it to rank law firms. Those rankings are then used in outside counsel hiring decisions. And, while the bank does not have the sufficient data infrastructure to track and report diversity data to formal Mansfield certification standards, they have implemented the Mansfield Rule informally.

Johnson said that her company has quarterly discussions with its outside counsel where they ask who the “originating partner” is because it is important to them that diverse counsel not just work on their matters, but also lead them. Palo Alto Networks’ legal department wants accountability and they are using their buying power to get it.

Sledge-Sarnor said MUFG Union Bank also asks for origination credit information, stating, “I want real change, all the way to where the dollar goes.” They believe that the more you give good work to diverse teams – to a star who has been overlooked – the easier it will be for them to be that billing/originating partner down the road.

Flex reshuffled its entire list of outside counsel to include firms with provable data supporting their diversity efforts.

Johnson recounted a recent experience where Palo Alto Networks had a new outside counsel first chair assigned to a matter and that person wasn’t diverse. The in-house practice lead called the outside law firm and asked for a list of diverse attorneys from which to select the first chair and instead selected from that list, replacing the originally named first chair.

Can diversity be incentivized?

The panel agreed that while hard conversations are important, incentives can also be used to encourage diversity in outside counsel. For instance, some companies give awards for diversity achievement to outside counsel.

An audience member said that her company told its panel firms that it would track their diversity staffing for the term of the panel. Those firms that did well on diversity did not have to go through the panel requalification process next time around. She noted that firms could show either material improvement or a positive absolute position on diversity to be eligible for automatic renewal.

Johnson’s former employer started a joint diversity internship program with its outside counsel firms. One of those law firms is doing that same program with four to five other clients now.

How can we enact meaningful change?

Delarkin echoed the sentiments of the entire panel and audience with the observation that for real change to happen, there must be more companies that are willing to let go of firms that don’t improve. And to do that, they must have the data that shows them who is doing the work to improve.

The good news? The discussion around diversity is getting louder; the tools to measure diversity spend are getting better; and the conversations are becoming more direct.