Backstory: City Bar Gets Tough on Diversity

Friday, November 4, 2016 - 12:55

In an attempt to jumpstart what it calls “stalled progress” for minority and women lawyers, the New York City Bar is getting tough on firms in the world’s biggest legal market.

In its recently released Diversity Benchmarking Report – which included the news that representation of minority attorneys has declined despite firms’ increased support for diversity initiatives, the City Bar noted some “significant changes” to its reporting based on recommendations from a task force assigned to review the benchmarking survey with an eye toward strengthening the impact of its data.  One change in particular stands out: participation in the survey is now mandatory for the 119 law firm signatories to the Bar’s Statement of Diversity Principles. The statement says, in part, “[W]e pledge to facilitate diversity in the hiring, retention and promotion of attorneys and in the elevation of attorneys to leadership positions within our respective organizations.”

Seventy-five firms complied. This led to a far more robust harvest of information, as reflected in the 2015 report. Those firms that did not participate will be stripped of the right to be listed as signatories, says the Bar, sending a strong signal that it means business.

In addition, for the first time since launching the survey in 2004, the City Bar sought detailed breakdowns from firms on individual racial and ethnic groups rather than gathering aggregate data on “minority attorneys.” It also added three sections: workflow and bonus structures; pipeline efforts; and highlights of firm initiatives – “better practices” – that appear to be having a positive impact.

So what’s the upshot of the 2015 report? While there are some bright spots, including leadership gains for women, there are some worrisome trends that threaten the progress for women and minority attorneys and, as the report says, “may have a long-term effect on the future of firm leadership.” The problem is in the associate pipeline. Hard-fought gains for women and minority lawyers have stalled, or are actually eroding.

For example, gender diversity has leveled at 45 percent for junior and mid-level women associates, and has declined for mid-level and senior associates at 25 percent and 20 percent respectively. Moreover, minority and women attorneys are voluntarily leaving their firms at a far higher rate than white men. And minority women, who make up a mere 3 percent of all partners at signatory firms, continue to face monumental challenges.

“Progress remains incremental,” said City Bar President John S. Kiernan, “and the attrition and pipeline numbers are not where they should be.” 

There are some bright spots. Women partners continue to make slow-but-steady gains in leadership, reaching a high-water mark of 19.7 percent in 2015. That includes 20.3 percent representation on firm management committees, as well as 37 percent of firms with three or more women serving on their management committees. Despite that progress, however, one in four signatory firms has no women on its management committee and one in eight has no women practice leaders. The percentage of women promoted to partner was unchanged, and it has not returned to the levels attained in previous years. As the report warns, “Current flattening of the pool of female talent may affect the long-term representation of women leaders.”

Another bright spot is that despite flat minority attorney leadership representation, the percentage of law firms with three or more minority attorneys on their management committees more than doubled from 7 percent to 14 percent from 2014 to 2015. Other bright spots include a doubling in LGBT representation since reporting began, and continuing gains among Asian/Pacific Islander women, the only group with consistent increases since 2004.

Nonetheless, the fact remains that more than three in four equity partners are white men, with women and minorities disproportionately concentrated at the income partner level. Combined with their turnover rate, which is more than double that of women and minority equity partners, there seems to be trouble brewing.

One of the most interesting changes in the report is the new Better Practices sections highlighting promising firm initiatives. These include several innovative programs for the recruitment, retention and promotion of minority attorneys such as Weil’s Upstander program, which is discussed here. Many other firms are called out in the report for their initiatives focused on leadership, recruiting and retention, and flexible work programs.

Signatories who participated in the survey each receive an individualized report prepared with the assistance of Deloitte Transactions and Business Analytics and Deloitte Finance Services LLP.

The report concludes that monitoring firm metrics is a “critical tool to advance diversity.” Knowledge is power – and empowerment. By knowing more about themselves and their peer firms, the signatory firms should gain a better understanding of the challenges they face and what they can do to meet those challenges.

A final word on clients. There are 20 corporate signatories to the Statement of Diversity Principles, including companies such as American Express, CBS, Merck, Morgan Stanley, PepsiCo and Viacom. According to the report, clients have a big role to play in moving the diversity needle through the financial incentives they wield. “[T]hey can make a concentrated effort to ensure that diverse attorneys are staffed on their matters and given substantive work, increase the specificity of their RFP metrics, and ultimately drive change by reducing the volume of business directed to law firms that do not demonstrate improvement,” the report says.

Tough language for a tough problem.