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Is Diversity a Victim of the Weak Economy?

By Stephanie R. Renner


In recent years, the legal community has been bombarded with stories of layoffs and difficult economic times. Many have been left wondering whether all the efforts to encourage and support diversity initiatives will fall victim to the current economic environment. Thankfully, it appears that diversity is not a victim of the down economy. There is much support for this conclusion as well as why law firms and corporations cannot allow diversity to become an economic victim.


This year, the eighth annual Human Rights Campaign Foundation's Corporate Equality Index, which rates companies for their commitment to LGBT equality, awarded a record 305 companies with a perfect score of 100 on their ranking scale—up from 260 companies last year. While the study does not focus on legal departments, 88 of those companies were law firms. The increase in numbers of employers receiving a perfect score is a sign that companies continue to place a high priority on diversity and evolve in their focus even in a down economy. In fact, many companies have made it clear that the current volatile economy is no excuse for cutting back on diversity initiatives. Rather, now is the perfect time for companies to focus on these important issues. As Paul Chadha, an attorney and manager at Accenture, told InsideCounsel, "You don't want to send the message that when times are tough you cut fat and that this is fat." According to Chadha, "The economy actually sharpens focus on diversity because of its benefits. 'It's not fat—it's strategic, it's important, and it's important that people recognize that." [1]


Corporate legal departments and law firms have been demonstrating their commitment to staying the course on diversity over the past few years.


  • In 2009, InsideCounsel recognized Sun Mircosystems as one of its IC-10 for its expansion of its diversity program to include a focus on international diversity. [2]
  • In 2009, the StreetLaw, Inc., Corporate Legal Diversity Pipeline Program reached 800 students and added 5 new companies to its volunteers. [3]
  • In July 2008, Microsoft caught the attention of law firms across the country when it launched a Law Firm Diversity Program for its 17 Premier Preferred Provider law firms. Microsoft’s program uses a "pay for performance" approach to enhance diversity. [4]
  • In January 2009, Darragh J. Davis, vice president and general counsel of PETCO Law Department; Deborah Epstein Henry, founder and president of Flex-Time Lawyers LLC; Rupa G. Singh, a partner in the San Diego office of McKenna Long & Aldridge LLP; and Elizabeth B. Daniels, chief legal counsel for the SIMNSA Health Plan launched Balanomics, "an initiative that demonstrates a direct economic link between productivity, profitability, and work/life balance in the legal profession." [5] Balanomics already counts among its signatories three corporations, eight law firms, and ten professional associations.
  • In May 2009, senior legal executives from The Coca-Cola Company, Microsoft, Wal-Mart, and 11 more Fortune 500 companies collaborated with the managing partners of O'Melveny & Myers, DLA Piper, Debevoise, and other leading law firms to form The Leadership Council on Legal Diversity (LCLD), "an organization dedicated to using all means at their disposal to create a truly diverse legal profession. The LCLD recognizes and affirms that having diverse talent is a critical element in having the best talent. To assure that the legal profession enables the best talent to flourish, the LCLD is committed to eliminate impediments which preclude minorities and women from having a full and fair opportunity to perform, to succeed, and to lead." [6]
  • The 2009 Law Firm Diversity Professional Survey, cosponsored by the Minority Corporate Counsel Association and the Association of Law Firm Diversity Professionals, found that 50 percent of the 200 law firms surveyed reported that their diversity budgets would remain about the same in 2009 as in 2008, and 20 percent of the law firms said their budgets would be higher. [7]

Despite this demonstrated commitment among the country's largest corporations and law firms, times are tough, and many companies are feeling pressure to cut back on non-revenue generating activities. No one feels this pressure greater than corporate legal departments, who are often already viewed as cost centers by management. But, according to Doug Harris, owner of The Kaleidoscope Group, a Chicago-based diversity consulting firm, "It's a true sign of the commitment of the organization [to diversity and inclusion] when the economy starts to take a dip." [8] So how can corporate legal departments and law firms demonstrate their commitment to diversity while being fiscally responsible in these trying times?


According to diversity professionals, now is the time to evaluate what is really working in your diversity plan and to make sure dollars are being spent effectively. Jane DiRenzo Pigott, managing director of R3 Group LLC, sees this economic downturn as an "opportunity to be more strategic about how you spend your money." Rather than cutting back on core programs or simply slicing into the diversity program because it is a line item on the budget, pay attention to travel costs, entertainment costs, outside providers, and other items not absolutely essential to the success of the program. Additionally, there are a number of low-cost measures corporations can take to keep moving the ball forward toward increasing diversity in the profession.


Send a clear message to outside counsel. Obviously, not every company has Microsoft's budget to offer bonuses to firms who step up their diversity efforts, but every company can communicate its commitment to diversity to the outside lawyers who handle its matters. Sending a clear message, engaging in dialogue, and requiring reports of the efforts firms are making toward diversity can go a long way toward encouraging commitment to the cause.


Encourage mentoring. In this economy or any economy, one of the best investments in efforts toward increasing diversity is often not money, but time. Encouraging attorneys to participate in mentoring programs for women and minorities—both in-house and in law firms—demonstrates a commitment to improving the retention and development of diverse members of the legal profession and helps ensure that the lawyers will continue to represent the varied viewpoints of our culture.


Focus on affinity groups. Affinity groups are a low-cost way to provide internal support to minority and women attorneys. They can also be used as a tool for gauging progress in your diversity efforts and for raising awareness within the firm or corporation. Other benefits are improved retention, informal mentoring and coaching, a voice for communication with management, and assistance with recruiting. [9]


Engage in strategic planning. The down economy is an opportunity for an organization to take stock of its diversity plan and evaluate what is or isn't working. Jeanne Picht, professional development and recruitment coordinator at Stites & Harbison PLLC, points out that while this is a time that companies and firms have to make tough choices, it is an opportunity to focus on the initiatives that are getting results. Jane DiRenzo Pigott also suggests that in this process, law firms in particular ask "Where are the opportunities for a law firm that has taken diversity seriously when the economy starts to recover?" This preparation can position you to be a leader in an area that has been dominated by large corporations and firms.


By now, we all know the business case for diversity. Corporate America has sent a clear message that doing nothing is unacceptable, and that message does not seem to have diminished in this volatile economy. Similarly, large law firms continue to heed the call and commit valuable resources to the cause. For those companies and firms with smaller budgets, now is not the time to throw in the towel. A renewed focus on diversity is an investment in the future, and it does not have to drain an organization's resources. Most importantly, it is the right thing to do.


Keywords: litigation, diversity, affinity groups, economy


Stephanie R. Renner is vice president, head of compliance, and CRA at American Founders Bank.


This article appears in the Spring 2010 issue of the Woman Advocate, the newsletter of the Woman Advocate Committee.


 

Endnotes


  1. Melissa Maleske, Designing Diversity: Driving Diversity and Inclusion in Your Legal Department, InsideCounsel, June 1, 2009 (last visited Jan. 28, 2010).
  2. Christopher Danzig, Cathleen Flahardy, Melissa Maleske, and Mary Swanton, Game Changers: The 2009 IC-10 innovative legal departments create winning solutions, InsideCounsel, Sept. 1, 2009 (last visited Jan. 28, 2010).
  3. Street Law, Inc., Pipeline Program Reaches 800 Students During Fall 2009, Dec. 15, 2009 (last visited Jan. 28, 2010).
  4. Microsoft, Inc., Legal and Corporate Affairs (LCA) (last visited Jan. 28, 2010).
  5. Darragh J. Davis, Deborah Epstein Henry, Rupa G. Singh, and Elizabeth B. Daniels, ACC Docket, Increase Profits and Savings Through Work Life Balance, Nov. 2009 (last visited on Jan. 28, 2010).
  6. Minority Corporate Counsel Association, MCCA Salutes the Formation of a New Legal Diversity Organization, May 6, 2009 (last visited Jan. 28, 2010); Business Wire, Fortune 500 Legal Officers, Top Law Firm Managing Partners Launch Leadership Council on Legal Diversity (last visited on Jan. 28, 2010).
  7. Minority Corporate Counsel Association, New Study Finds 70% of Law Firm Diversity Budgets Holding Constant or Increasing Despite Weak Economy, Apr. 29, 2009 (last visited on Jan. 28, 2010).
  8. Rebecca R. Hastings, SPHR, Society for Human Resource Management, Should Diversity Pay the Price in an Unstable Economy?, Jan. 2, 2009 (last visited Jan. 28, 2010).
  9. Virginia G. Essandoh,Why law firm affinity groups are a valuable resource, The Legal Intelligencer, Oct. 23, 2008, (last visited Jan. 28, 2010).

 

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