12 August 2016

Why diversity matters to us

Law firms, like business generally, have traditionally lacked diversity (both of gender and otherwise). Similarly, law firms, like business generally, are now understanding the benefits of diversity and doing more to encourage diversity in their firms and leadership teams. However, progress remains slow.

Why diversity?

The case for diversity is clear and powerful.

In summary:

  • Firms need to encourage diversity if they are to recruit, retain and engage the best and the brightest. Well over 50% of law graduates are women, and increasingly law graduates come from diverse backgrounds. If only white males with stay at home spouses can expect to progress and succeed in firms, it then follows that the quality of the people in firms (and the service provided to clients) will suffer. Whilst there may be a glut of law graduates, high quality talent is always scarce and in demand.
  • To align with their clients and the community, firms must be diverse. More than half of our legal counsel clients are female, and many come from diverse backgrounds. We cannot expect to build strong relationships with our clients unless we likewise have a diverse profile.
  • Clients are requiring diversity. Increasingly we are asked to talk about our diversity in client pitches and tender submissions. In her article ‘The High Cost of BigLaw’s lack of Diversity’, Melissa Maleske quotes Acritas in stating that corporate clients spend 25% more with legal teams that they consider ‘very diverse’. Nowadays clients will use diversity as one criteria to trim down legal panels. Some corporates have fired outside legal suppliers who didn’t take diversity seriously.
  • Diversity is also important for brand alignment. Clients want to work, and invest in a relationship, with law firms that share their values. Just as diversity is increasingly important to large corporates, it needs to be important to law firms. You can’t be a progressive, forward-thinking, ‘smarter’ law firm without investing in diversity initiatives.
  • Diverse organisations are more profitable. Various studies, including by McKinsey & Co. and Deloitte, have found that highest performing organisations – in terms of cashflow, profitability and growth – make diversity and inclusion a priority.

The importance of diversity of thinking

Perhaps most importantly, diversity encourages diversity of thinking and, therefore, better outcomes. A group of people with different backgrounds will perceive the world differently and develop better legal and business solutions.

Any astute law firm leader understands that the business of law is being disrupted and to remain competitive firms need to innovate and do things better. At Hall & Wilcox, Smarter Law’ and innovation in how we service clients is central to our strategy. Studies quoted by Silvia Ann Hewlett, Melinda Marshall and Laura Sherbin in ‘How Diversity can Drive Innovation’ (HBR, December 2013) provide compelling evidence that diversity unlocks innovation and drives market growth.

Challenges for firms

The case for diversity is well made out. Why, therefore, do we and other firms find it challenging?

There still seems to be a glass ceiling in firms, with many mid-level and upwards female lawyers opting out to go in-house or pursue another career. Our organisations tend not to be ethnically diverse. Most partnerships and management teams are still comprised predominantly of white males.

There are challenges to diversity created by the traditional law firm business model. Clients are demanding and often expect their providers to go above and beyond. This is particularly exacerbated in a competitive market. It then becomes the culture that lawyers are available 24/7 (particularly with the advent of mobile devices and email).

There is also the tradition of the billable hour, with rewards often based around time spent rather than quality of outcomes. Even if billable hour targets can be reduced, many ‘non-billable’ management responsibilities are binary, with partners and senior people expected to contribute equally notwithstanding their personal situation.

Even with the best of intentions, we find that life is pretty tough for our senior people without a ‘wife’ (to borrow from Annabel Crabbe) to support them. Clearly we all need to do better.

What are we doing?

There are a number of things that we at Hall & Wilcox are doing to tackle this problem and improve how we embrace diversity in our firm. We accept that how we do this will be fundamental to the success of our business.

Our over-riding strategy is Smarter Law. Central to Smarter Law is diversity. We will not innovate and develop new and better ways of doing things for clients unless we can encourage diversity of thinking at all levels in the firm.

Further, to be a firm that attracts, retains and engages the best and the brightest, we need to encourage and provide opportunities for those from diverse backgrounds.

We are introducing unconscious bias elimination in our graduate recruiting round to better encourage diversity. I think we also need to make a conscious effort to recruit people from different backgrounds and with different experiences (especially with a technology focus given the importance of technology to law).

I think that flexibility is key. We talk about being an agile workplace and encourage flexibility at the firm. However, those working part time and flexibly (especially those who are primary carers and / or with young children) really struggle with the demands of practice. Likewise, our managers can find it challenging to align the demands of clients and business with a team working flexibly. If we can be better at supporting our people in managing flexible work practices for the benefit of our clients and the firm, I think it can be a real game-changer.

There are other things we can also do – like better development and support for people from diverse backgrounds, generous parental leave and increased willingness to encourage career breaks and sabbaticals.

Perversely, I think that the relative inflexibility of our remuneration model (a traditional albeit modified equity lockstep) also can discourage diversity and flexibility.

Diversity is fundamental to the success of our business. We accept that we need to continue to strive to do better. We are committed to being a diverse and inclusive workplace so as to be the best that we can be. I commend all forward thinking firms and businesses to do likewise.