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The divide in diversity between law firms and in-house legal

Posted by: Laurence Simons 07/05/13

I have worked as a legal recruiter for many years, and I have recruited for associate and partner positions at law firms as well as for in-house legal departments at all levels.  Having placed lawyers both in corporate legal departments (in-house) and at law firms, I can compare the two quite easily.  If we contrast law firms who hire lateral attorneys and in-house legal departments that compete for the same talent, we find that corporations are better at recruiting women and minorities than law firms. 

Not that I'm taking sides.

Diversity as a high priority

To be clear, there is little doubt that the resolve exists on both sides of the legal hiring coin.  I believe that law firms understand and genuinely work to encourage diversity in their ranks as much as corporations do.  I am happy to say that I no longer have to pitch diversity as a good idea in hiring:  it is fairly well-established that a diverse pool of employees is a better pool of employees.  We have defined the conventional wisdom regarding diversity in the workplace, and we are agreed.

As much as we all agree that diversity is important, I would be surprised if anyone took the position that law firms have evolved far enough.  There is clearly still great work to be done, and instead of looking at each other to determine best practices in the diversity recruitment world, I suggest that law firms look at the corporate in-house world for an outline to increase the effectiveness their diversity efforts.

In a recent salary survey conducted by Laurence Simons, the salary divide between men and women in law firms was far more pronounced than in the in-house setting.   While recruiting diverse lawyers is a slightly different issue than how women and minorities are paid within their organizations, it remains inter-related.  When comparing the compensation differentials between men and women, both within in-house legal departments and law firms, we see that the differential is less in corporations.  In other words, the compensation divide between men and women is smaller at corporations.  While this statistic relates to how lawyers are treated once recruited, retention and recruitment are certainly two sides of the same coin.  Anecdotally, we see some progress in diversity recruitment in the in-house world we hope will soon be matched in the law firm recruiting market. 

What corporations do:  They get motivated.
There are several reasons why corporations are better at maintaining diversity recruitment than law firms.  First, many multinationals conduct business with government agencies who require them to put an aggressive plan in place to facilitate hiring without discrimination and to encourage minority recruitment.  Publicly held corporations are subject to a great deal of scrutiny, so their hiring practices must be refined, evaluated, and tested on a regular basis.  Depending on the business, there are specific regulations guiding a corporation's recruitment strategy.

Second, the Human Resources Department of a corporation is tasked with hiring more than just lawyers.  In fact, hiring lawyers may constitute a small percentage of the total employees evaluated and/or hired by the company.  Thus, corporations are accustomed to competing with their rivals for talent in a variety of fields.  Because of the breadth of experience that a Human Resources Department has, their recruitment is simply better evolved than the niche recruitment industry inside of law firms.

On the other hand, law firms are private organizations that hire professionals with a narrow skill set and specific credentials.  Law firms may answer to the marketplace, but do they have the same level of scrutiny as their in-house counterparts?  Generally, there is no board of directors; there aren’t any government agencies or watch-dog groups telling law firms to turn their interest in increasing diversity into a reality.  There is no doubt that this is related to why they fall behind their corporate counterparts in recruitment. 

It would be unfair to say that law firms do not have external pressure to make diversity more of a priority.  Certainly, there are law firms with recruiting and reporting responsibilities to government and private clients.  Even so, from the perspective of a legal recruitment professional, there still seems to be far more pressure and immediacy among corporations than within law firms. 

We believe, however, that this can and will change.  As mentioned, there is increasing pressure from clients for law firms to diversify their associate and partner ranks.  This will almost certainly increase diversity within these firms, as law firms become increasingly accountable to the marketplace.  With the desire for more diversity already established, maybe it would be worthwhile for law firms to think about mirroring some of the efforts of those corporate clients. 

Develop a plan for diversity recruitment, not a promise
In general, we see law firms developing similar commitments to diversity, written the same way and in the same context as corporations.  We receive letters from our clients with one or two sentences reminding us that they are an equal opportunity employer.  We receive specific requests for candidates for a role with a note that it would be nice to see women and minorities, but not to the exclusion of other candidates.  Our law firm clients are generally quite good at letting us, the recruiter, know that diversity is important.  I have been impressed with the ubiquity of the references my law firm clients make to the importance of diversity hiring.

"A little less conversation, a lot more action" 
What do I mean by that?  Corporations talk about diversity hiring, too.  Certainly, corporations are just as likely to use the language about a desire to see female and minority candidates as their law firm colleagues.  However, corporations are more likely to back up their story with an action plan for recruitment.  As recruiters, we often have conversations with our in-house clients, with whom we must answer specific questions in the context of looking at women and minority candidates.  We'd like to see more of those conversations between law firms and their recruiting partners.

Corporate clients ask us to specify exactly what we do to identify and recruit diverse candidates.  We are given information about the organization's track record, motivation, and future plans with respect to diversity in the workplace.  We have specific and detailed conversations designed to ensure that qualified diverse candidates are making up a meaningful portion of the candidate pool for any particular role. 

In corporate speak, there are 'action items' surrounding diversity hiring at multinationals.  It is simply not good enough for corporations to state that they hope to see diverse candidates as some stage in the process, for some position.  There is a resolution and a plan to ensure that it happens. 

Additionally, we see that corporations do an effective job of communicating up and down in the organization.  Usually, a person in Human Resources is accountable for promoting diversity.  The Hiring Manager on each role must be equally committed.  The legal recruiter working to fill the role should be challenged to identify and recruit in accordance with the goals in the organization, as well.  Thus, all of the participants and decision-makers have the same vision. 

On the law firm side, we see so many great efforts undertaken by various stakeholders at the firm.  We struggle to think of a client who does not have a committee devoted to diversity, and/or a Director of Diversity.  Again, the commitment is there without question.  But I have seen much more across-the-board buy-in and communication within in-house departments than I have in law firms.

Metrics are meaningful
Corporations love metrics.  How many diverse candidates were presented for a specific role?  How many were interviewed?  Who was hired?  These metrics, when quantified across a large organization, help define the direction and effectiveness of an organization's commitment to diversity.

Certainly, some law firms ask for voluntary disclosures from candidates for their positions.  This, while satisfying some regulatory requirements, will also aid an organization in benchmarking how successful they are in attracting diverse candidates.  However, once collected, what is being done with this information? 

Without careful evaluation of the recruitment efforts in the context of diversity candidates, there is an opportunity missed.  Is there an individual in your organization who is accountable for reporting on the success of attracting diverse candidates?  Is this person establishing metrics for hiring across each job opening and for every position?  Who is responsible for reporting to the organization what progress is being made in increasing the profile of the firm to diverse candidates when the firm is actively recruiting in the lateral market? 

At the end of a fiscal year, or at the conclusion of a successful lateral search, is anyone having the conversation about the metrics surrounding diversity?  Your corporate clients are probably having these meetings.  They are asking whether, in the context of any filled role, there were diverse candidates.  If not, why not?  When our corporate clients review their own metrics, they use them to help shape their continuing efforts, and we are seeing positive results.

Pushing the Process
While law firm recruitment is more diversity-focused than it has been historically, the need to push forward in evolving the hiring function is not going away anytime soon.  Luckily, there are some great ways to improve this organizationally, and they are just a phone call away.  A law firm's biggest clients are putting some great recruitment techniques in place and gaining momentum in their own diversity recruitment. 

Maybe just this once, law firms might want to call their clients for advice.