- The benefits and process of marketing yourself and your firm as a women-owned business today.
People might be surprised that a major project of mine in 2022 was to get our law firm certified as a women- owned business. I co-founded the firm with my law partner Lynn Susser in 1994, and for most of two decades it was a 50-50 venture that had a male and a female partner. But in recent years, we’ve been bringing on a new generation of leaders at the firm, and the majority of our shares are now women-owned.
The benefits of marketing the fact that we are a women-owned business didn’t really register with me until my friend, the marketing maven Carol Schiro Greenwald, asked me why we hadn’t gone through the process of getting certified as a women-owned business. I then had to ask her why it was important, and she educated me. As the one who took the idea back to the firm, I was, of course, tasked with figuring it out and making it happen.
We’ve just successfully finished a fairly involved process of getting certified by both the Small Business Administration (SBA) and the Women’s Business Enterprise National Council (WBENC).
Note that while this article doesn’t address the process of seeking minority-owned (such as Black, Hispanic, Asian or Native American) or LGBTQ-owned certification, the process and reasons for seeking such a designation are similar in many respects to seeking women-owned certification.
I’m not surprised when lawyers who might qualify for diverse owner certification don’t know much about the subject, given my own ignorance. But if your firm is majority-owned by women, hopefully this column will spark your interest and you can decide if it’s right for your organization.
The primary reason firms typically seek certification is to have opportunities to pursue legal work with clients that are interested in supplier diversity.
While women have made up a growing share of American law students for many years, the percentage of women holding equity positions in large law firms is still shockingly low. According to Bloomberg Law, women constituted 16% of equity partners at large law firms in 2005. By 2022, that number had only increased to 22%. In addition, male partners are still making 44% more than female partners.
This lack of gender diversity and pay equity has led many companies to seek out women-owned firms to source at least some of their business. The Institute for Inclusion in the Legal Profession (IILP) issued a 2022 report that examined just how much work was being sourced out to women-owned law firms.
IILP surveyed 136 companies, more than half being members of the Fortune 500, and found that almost 71% of the large companies surveyed are tracking the diversity of their outside counsel, with the highest percentages tracking gender and race/ethnicity. The report also found that while most business is still going to large law firms, nearly 82% of surveyed firms were sending at least a portion of their work to women-owned firms.
A separate 2022 survey conducted jointly by the National Association of Minority & Women Owned Law Firms (NAMWOLF) and IILP of 86 Fortune 1000 companies found that 88% of surveyed companies had referred at least some work to a diverse-owned law firm in the prior three years. And only about one-third of the surveyed companies that referred work to diverse-owned firms indicated the size of the firm was important.
What is less clear is how important having certification is to firms seeking diverse ownership. In the NAMWOLF survey, 40% of respondents considered certification important or somewhat important when selecting diverse-owned counsel. So, while a significant portion of work is being sent to certified firms, those diverse firms that are not certified may still benefit.
The NAMWOLF survey also found that not all diverse-owned firms are viewed equally. Factors like the pedigree of the lawyers, the number of years in business, recommendations by other corporate clients and the diversity at the firm beyond the shareholders all often factor into the decision.
Once a firm is certified as women-owned, it has access to organizations that can add it to databases accessible by companies seeking diverse-owned, outside law firms. That’s the case for organizations like Women’s Business Enterprise National Council (WBENC), as well as NAMWOLF. The SBA also publishes government contract opportunities available to SBA-certified, women-owned businesses, as part of an initiative to award 5% of all federal contracts to women-owned businesses. The organizations also host networking events designed to connect diverse owned businesses with potential clients and customers.
Certification is beneficial, as is joining organizations like WBENC and NAMWOLF that require certification for membership and also provide education and support and, importantly, the use of the certifier’s logo that can be used in the firm’s marketing.
Arguably, certification might also help in retaining shopping clients. A company that has sought out the services of a women- owned law firm and is happy with the work might be reluctant to issue a request for proposal to find a somewhat-cheaper provider if that means moving the work to a firm that is not diverse-owned.
The SBA has a certification for Women-Owned Small Businesses (WOSB) and another for Economically Disadvantaged Women-Owned Small Businesses (EDWOSB) with an owner having a net worth under $750,000, an adjusted gross income average over three years of less than $350,000 and assets with a fair market value of $6 million or less.
WOSB and EDWOSB designation can be sought for free directly from the SBA, or it can be sought through another organization that has separate certification programs as well. These include :
NAMWOLF does not certify directly. Instead, it requires certification by WBENC to be eligible to join.
Getting certified by one of these organizations typically costs several hundred dollars. Certification generally needs to be reissued annually. NAMWOLF’s annual membership cost in addition to the WBENC-certification cost is $1,275 for firms under five attorneys to $6,300 for firms with more than 50 lawyers (with several fee options in between depending on the size of the firm).
As for the application process, weeding out fraud is a priority, so be prepared to provide a lot of documents and information. That will include explaining the history of your business, providing resumes of the equity partners, any power of attorney or consulting agreements that might affect the ownership or management of the firm, evidence of gender and citizenship of the female owners (like a passport), corporate documents verifying share ownership and the governance structure, a range of financial documents, documentation of the management roles of the female shareholders, a list of all employees and payroll tax documents, and more. The process concludes with an interview of the female partners.
Getting certified as a women-owned business is time-consuming and, ultimately, not cheap. But the fact that the number of law firms getting certified and recertified continues to grow shows that many believe the investment is worthwhile, particularly as more companies seem to be getting serious about diversity and equity, including in the law firms they hire.