The benefits of having a diverse workplace are well established and in the world of business the lack of diversity can have a negative effect on a company’s bottom line, as well as negative social consequences for society’s future. The legal profession, however, has not taken full advantage of the business benefits of diversity and inclusion. Of course, law firm leaders should be focused on the financial health of the firm. But the best leaders are also constantly evolving to develop the best business models to serve the firm’s clients, the firm’s owners and the firm’s employees. Increasing the representation of women and diverse lawyers in a law firm can enhance business as more clients factor in diversity when choosing outside counsel. The business case for diversity makes not only good business sense, but “Diversity . . . is essential to prosperity in the global economy.”

1. The paradigm of diversity initiatives has evolved over the past 40 years. In the 1960s, once a number of civil rights laws were passed, workplace diversity issues were driven by concerns about compliance with the new civil rights laws. After companies began complying with the various civil rights laws and regulations that focused on diversifying the workplace, the rationale behind diversity changed as corporations began implementing diversity initiatives. The reasoning was that attracting and maintaining a diverse workforce was simply the right thing to do for their employees and business from a moral standpoint.
2. The more recent evolution of the diversity and inclusion paradigm has shifted from morality-based to the business case. The business case suggests that diversity improves a law firm’s financial performance and that law firms that are not diverse suffer reputational damage and have higher employee turnover, both of which affect the bottom line of a law firm.
3. Likewise, the conversation surrounding the business case for diversity in law firms is shifting. The shift is from discussing whether there are internal issues to implementing strategies to determine how to increase the number of women and diverse attorneys in law firms. This shift, essentially a switch from discussing past moral failings toward a discussion about revenue growth, without surprise, is often more palatable among a law firm’s most entrepreneurial thinkers. But, regardless of the motivation for a law firm seeking to obtain a diverse and inclusive workforce, forward-thinking firms today should have a strategic plan to make the ranks more diverse. When addressing the business case for diversity and inclusion, law firms would do well to focus on the following areas:

Talent The business case for diversity in law firms requires an understanding of how to attract the best legal talent in the marketplace. The largest percentage of law school graduates is now female and a larger percentage of diverse students are graduating from law school. Further, our society is becoming more and more diverse on a daily basis. The business case for diversity thus means that law firms should hire and consider the strategic use of women and diverse attorneys in litigation. Indeed, there can be a clear strategic advantage to having a trial team that consists of diverse attorneys since jury pools are more diverse today than they have ever been. Thus, in a gender discrimination suit, there may be a distinct advantage in having a woman be the lead litigator defending a corporation as opposed to having a male lead counsel because doing so may make the corporation’s position more relatable. Law firm management, however, should be careful to staff matters so that diverse attorneys are an integral part of the team rather than used solely because of their diverse background as “window dressing.”

Client Relationships The business case for diversity and inclusion also relates directly to law firm marketing and business development. The legal profession is a relationship driven business. Selection of counsel is often determined by how comfortable someone feels with another person. Therefore, when corporations are looking for outside counsel, having a diverse workforce can be a great advantage. In fact, corporate clients today are demanding that law firms have respectable diversity statistics in order to win business. For example, Hewlett Packard announced that it will “withhold up to 10 percent of bills from firms that do not meet or exceed HP’s diverse staffing requirements,” and Facebook’s legal department now requires that outside counsel teams working directly on a matter be 33 percent composed of women and ethnic minorities. The message is clear. Corporations are expecting law firms to make real efforts to diversify their workforce and as such, law firms will need to ensure that they are taking steps to make sure their teams are diverse in order to remain competitive in the legal marketplace. Requests for business proposals from government agencies and private companies almost always include a section requesting diversity information about the firm, and often the request clearly states that firms without any diversity will not be highly considered.

Be Different The business case for diversity also means that law firms can stand out as a leader from the pack of lawyers seeking work from corporations. In particular, law firms have to find a way to differentiate themselves from the global law firms that are seeking work from major corporations. One such way to create a distinction is to ensure that your firm is making tremendous efforts toward diversifying its workforce. By making and showing significant efforts toward obtaining a diverse workforce, law firms open themselves up to better opportunities to attract business and in turn, increase the profitability of the firm. As noted by Merck General Counsel Kenneth Frasier, “We are in the fortunate position of having many highly capable law firms lining up to work with us. And it was hard in some ways to differentiate among these firms. But we found that diversity was something that would allow us to make that differentiation.” Building a diverse and inclusive workplace continues to be a paramount priority for most law firms. To be successful, law firms should be very open and honest in their discussions about diversity and inclusion, and discuss these issues in a way that pushes the ball forward. Law firms should make diversity and inclusion a core value of the firm, and recognize that by not improving their diversity and inclusion initiatives, they are leaving dollars on the table and will most likely be a much less profitable enterprise and quite possibly obsolete in the future business landscape.

Paul M. Fires is a Partner, Firm Chair Emeritus, continued from previous page and Co-Chair of the Workers’ Compensation Group at Weber Gallagher. In recognition of his skills as a litigator, Paul has been named the US News and World Report/Best Lawyers – Philadelphia Lawyer of the Year for Workers’ Compensation – Employers, 2020.

Kenneth E. Sharperson is a Partner, and Diversity & Inclusion Chair at the firm Weber Gallagher. He serves as national counsel for clients in insurance coverage and commercial litigation matters and is also part of the Law Firm Anti-Racism Alliance’s Education Working Group. In 2019, Kenneth was recognized by the New Jersey Law Journal as one of the Diverse Attorneys of the Year and in 2020, as one of the Trailblazers in Law for his efforts to diversify the legal profession.

article was originally published with IADC 1 David B. Wilkins, Symposium: Brown At Fifty: From “Separate Is Inherently Unequal” To “Diversity Is Good For Business” : The Rise Of Market-Based Diversity Arguments And The Fate Of The Black Corporate Bar, 117 Harv. L. Rev. 1548, 1553 (March 2004). 2 See Kelli A. Green, Mayra Lopez, Allen Wysocki, and Karl Kepner, Diversity in the Workplace: Benefits Challenges, and the Required Managerial Tools , citing ,Richard Koonce, Redefining Diversity: It’s Not Just The Right Thing To Do; It Also Makes Good Business Sense, Training and Development, December 2001).