It finally happened. Wal-Mart Stores Inc., a consumer of approximately $200 million in legal services annually, announced this past fall that it had fired one of its outside law firmsnot because of the quality of its legal work but because the firm failed to meet statistical recruitment and retention goals for minority and women attorneys. Many other corporations are threatening to do the same with respect to their outside law firms.
It is not surprising, therefore, that diversity is the hot topic in law firms these days. Diversity has grown well beyond a moral imperative; it has become a business necessity. It is no longer enough to commit to amorphous, if noble, goals of creating an inclusive environment. Corporations are now requiring their law firms to meet specific goals and prove that their legal matters are being handled by diverse lawyers.
This moment was a long time coming. In 1999, the chief legal officers of 500 corporate law departments signed a document entitled Diversity in the WorkplaceA Statement of Principle. These corporate signatories agreed to urge their outside counsel to make immediate and sustained efforts to improve diversity within their firms. However, after five years of increased focus on law firm diversity, in-house counsel acknowledged that progress toward the goal had reached a disappointing plateau.
Accordingly, in the spring of 2004, Roderick A. Palmore, chief legal officer of Sara Lee Corp. and a member of the board of directors of the Association of Corporate Counsel, authored A Call to ActionDiversity in the Legal Profession. Signatories to this document reaffirmed their commitment to the 1999 statement of principle and further pledged not only to choose law firms based in significant part on how effective they have been in creating diverse work forces but also to end or limit relationships with firms that failed to perform adequately in this area.
Despite this clear and compelling mandate, it was unclear whether real change would occur. Now that Wal-Mart, following the principles of the call to action, has fired an outside law firm, many firms are, or should be, scrambling to adopt or enhance diversity policies. As discussed below, the four key steps to consider are obtaining commitment from the top, investing in the commitment, tracking progress and celebrating successes.