Prioritizing diversity and inclusion in your practice is not just altruistic – it’s a smart business move as well.
It will give your firm an edge in recruiting and retaining top talent. It’ll enrich your firm’s culture. And it might even put you in the running for new clients.
That’s because a growing number of businesses are demanding that the law firms they hire have a robust diversity and inclusion policy.
Facebook, for instance, requires its outside firms to have at least 33 percent women and ethnic minorities. Hewlett-Packard withholds up to 10 percent of invoiced fees if firms don’t meet diversity targets. Microsoft provides incentives for firms that emphasize diversity.
And yet the legal industry still lags, experts say.
“Despite the studies that show diversity drives profitability, most law firms have not been taking great strides to become more inclusive,” says Colleen Cochran, JD, of IMS Consulting & Expert Services, in this ABA Journal article. “In fact, all businesses and industries benefit from diversity.”
Below are some takeaways from the article.
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Making The Case for Law Firm Diversity and Inclusion
Here are some highlights from the ABA Journal piece. All quotes are from the author, Colleen Cochran, JD:
- A 2020 study from McKinsey & Company found that the more diverse a company is, the more likely it is to outperform less-diverse peers on profitability.
- This 2020 study from the Legal Executive Institute showed that the gap between low- and high-diversity firms is nearly $180,000 per partner per year.
- A 2019 National Association of Women Lawyers survey of the top 200 grossing firms found that women comprised only 16 percent of the firms’ equity partners. Ten years later, that figure had risen only to 21 percent. This is so even though women comprise 54 percent of law students at ABA-accredited law schools nationwide. The same survey showed that people of color made up 9 percent of equity partners and women of color only 3 percent. LGBTQI+ individuals were about 2 percent, and persons with disabilities only 1 percent.
- “When it comes to retaining the women and minorities they do hire, firms face an even greater challenge. The attrition rate among women, and particularly women of color, is high. Some of the reasons women give for leaving a firm include unfair compensation systems, feelings of being sideliners in the firm, denial of access to significant assignments and pathways for advancement, lack of mentors, and stress of trying to maintain work life and home life.”
- The average cost to replace a single associate is estimated to be around $400,000.
- “The legal system benefits when it is representative of all the people it serves. When law firms open themselves up to people who possess a range of different perspectives, they become more creative, innovative and appealing to clients. Diversity is smart and ethical business practice, and the firms that choose to make it a priority will discover it is also very profitable.”
Source: ABA Journal