Is There A Non-Business Case for Diversity?

Case-for-Diversity“The Business Case for Diversity”.  Type that into Google, you get 370,000 results.  “The Non-Business Case for Diversity”?  Type that into Google, you get nothing.

Now it could be the search terms of course.  But I’ve been thinking about the non-business case for diversity and I’m wondering – what is it?

Last week, I attended the Institute for Inclusion in the Legal Profession’s Chicago program, The Ethics of Diversity and the Politics of Inclusion.  Marc Firestone, General Counsel for Mondelez International (formerly Kraft Foods) delivered the keynote address.  Following him was a panel of various attorneys at Fortune 500 companies across the country: Elisa Garcia of Office Depot, Gerd Pleuhs of Mondelez, Barrington Lopez of Verizon Wireless, Cathy Tang of KFC, and Carrie Hightman of NiSource.  Moderating the panel was Willie Miller, Jr., also of Mondelez.

During his keynote address, Mr. Firestone made his personal case for increasing diversity in the legal profession.  From his perspective, it’s not about dollars and cents, but rather about how he wants his profession, one based on equality and justice, to look.  To be.  When he looks at the bar, he wants to see a diverse group of men and women as participants in that bar.

Mr. Firestone’s remarks echo those of James R. Slikenat, the new President of the American Bar Association.  In his recent President’s Message, Mr. Silkenat wrote:

“Our vocation is not just a job.  We belong to a profession that is a key part of our democracy and a free society.  We are officers of the court, and our justice system is central to the challenges we face as a society … We know that women and minority lawyers face unfair hurdles in promotion and pay, and that our profession – to a large extent – does not look like the public we serve.”

If the General Counsel of a Fortune 100 company and the President of one of the world’s largest professional organizations are both on the same page on diversity, what’s holding us back?  That topic constituted much of the afternoon discussion.  For example, Carrie Hightman talked about how we can’t simply be for diversity, we also must be for inclusion.  Cathy Tang mentioned the pipeline issue.  Are diverse candidates coming out of high schools and colleges?  Are they attending law school?  The pipeline, she concluded, looks bleak.  Several of the panelists also explained that although they would like to take more chances in hiring smaller minority and women-owned law firms, and often do, at times, the risk is not worth the reward.

However, it was Barrington Lopez who started the discussion that led to the title of this post.  He asked those present to raise their hands if they were against diversity.  No one did.  And that’s part of the problem, he said.  We are all for diversity but we aren’t moving it forward.  We’re complacent.  Part of the reason, the panelists later explained, is because there is no penalty for failure.

What is the penalty?  That, for me, is the million dollar question.  Literally.

If this blog post were about courts or prosecutors or public defenders, then I could easily discuss the “penalty” for a lack of diversity.  But it’s not.  This post is about about profit-making law firms and their profit-making clients.  It’s about starting salaries and profits per partners and realization rates.  It’s about money.

The panelists pointed out that law firms promote diversity when it make sense to their bottom line, i.e., when diversity brings in clients who can pay.  Conversely, clients will require diverse staffing from their outside counsel if it matters to their powers-that-be.  If people like Marc Firestone want outside counsel to have diversity, then in-house counsel and outside counsel will make sure it happens.

But what if the powers-that-be don’t mandate diversity?  According to the panelists, if their superiors don’t mandate it (or even, discourage it from being a considering factor), then neither will they.  And if they don’t mandate it, neither will the law firm servicing them.

See you can make the business case for diversity for a regular private sector company and many have.  But with law firms, it’s different.  In fact, it may not even exist.  The IILP itself discussed this issue in their recent report, The Business Case for Diversity: Reality or Wishful Thinking?  Here’s a quote from the report’s concluding chapter:

“We found that while a business case for diversity does exist, it stops short of generating the significant amounts of business necessary to enhance career sustainability, viability and success of meaningful numbers of diverse partners. Corporate clients’ interest in diversity serves as an impetus for law firms to increase efforts to recruit, retain and promote diverse lawyers to their partnership ranks, and to otherwise support diversity efforts in the broader profession. These diversity efforts by law firms, however, regardless how successful, do not track with a corresponding increase or decrease in business from clients committed to diversity.”

Law firms run a business, often a very profitable business.  They spend money to get clients, whether through recruiting or networking or public relations or business development.  If diversity initiatives don’t lead to getting clients, then why should law firms spend their time and money on them?  If clients don’t care that a law firm staffs a diverse team of attorneys, then why should a law firm do it?  Those were the questions I was left with.

Which leads to my question for you: is there a non-business case for diversity in law firms?  If your answer is like Mr. Firestone’s and Mr. Silkenat, then I ask you: are law firms in the business of social transformation?

I’ll put it to you another way.  You’re the hiring partner at a law firm.  The managing partner shows you the numbers.  He explains that diversity initiatives have led to more money going out than coming in and have not led to an increase in clients.  He’s run studies, surveyed the partners, and has concluded that there will not be any PR, recruiting, or business problem if the firm stops funding diversity initiatives entirely.  You’re on the hot seat.  What’s your non-business case for diversity?

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