An Analysis of Diversity and Inclusion in the Insurance Industry

Among the Least Diverse Industries in the United States

To evaluate the level of diversity within the insurance industry and the legal industry in the United States, it is important to identify a reference point from which we may draw conclusions. In the present matter, the national demographics of the United States is used as the reference point from which to analyze the level of diversity within the insurance industry and legal industry in the United States.

This analysis is, therefore, based on a presumption that it is reasonable to expect the insurance industry and the legal industry to reflect demographics on a par with the country that they do business in. To the extent that the demographics of either industry or both are substantially different from the demographics of the country that they do business in, we should question whether this is a natural occurrence or possibly the result of unconscious bias. The mere fact that one group is underrepresented or overrepresented in a particular industry does not automatically suggest that there is bias or discrimination. A thorough analysis is required before a conclusion can be made.

The demographics of the overall U.S. population. According to data from the U.S. Census Bureau, the U.S. population is about 50.8 percent female and 49.2 percent male.[2] With respect to race, the U.S. population is estimated to be 61.6 percent white (not Hispanic or Latino), 17.6 percent Hispanic (any race), 13.3 percent African American alone, 5.6 percent Asian, and 1.2 percent Native American; 2.6 percent of respondents identify with two or more races.[3] For the LGBT population in the United States, it is very difficult to get accurate numbers because many LGBT people in the United States fear discrimination and will not identify themselves to pollsters. Recent estimates of the LGBT population in the United States suggest that it could range from 5 percent to 10 percent.[4]

In light of these national demographics, one might expect to find comparable levels of diversity for industries doing business within the United States. However, recent data collected by the U.S. Census Bureau and a recent survey of 65 insurers in the United States conducted by McLagan, an independent subsidiary of Aon Hewitt, a division of Aon, tell a different story.

Comparing the demographics of the insurance industry to other industries in the United States. The chart below (please see PDF for all charts and graphs) compares overall gender diversity in the insurance industry with overall gender diversity in six other industries; specifically, engineering, health care, financial services, social services, legal services, and office support.[5]

At first glance, the overall numbers for both publicly traded insurance companies and mutual insurance companies appear to favor women. After all, 55 percent of the employees at publicly traded insurance companies are female, and 59 percent of the employees at mutual insurance companies are female.[6] However, as explained in more detail below, as we dig deeper into these insurance industry demographics, we will find that women are disproportionally underrepresented in the upper echelons of management at both publicly traded insurance companies and mutual insurance companies.

The chart below compares the overall racial demographics of the insurance industry with the overall racial demographics of the six previously mentioned industries—engineering, health care, financial services, social services, legal services, and office support.[7]

In the chart above, the contrast between the racial demographics of the insurance and the racial demographics of the general U.S. population (discussed above) is more stark than what is reflected in the gender demographics chart above. However, we still cannot fully appreciate the extent to which women and racial minorities are underrepresented in the insurance industry without also looking at the demographics of all levels of employment at insurance companies in the United States.

In 2016, McLagan, an independent subsidiary of Aon Hewitt, a division of Aon published data from one of the most comprehensive diversity surveys ever conducted of the insurance industry in the United States.[8] McLagan surveyed 65 insurers, more than 50 of which are in the property/casualty industry.[9] The 65 insurers surveyed by McLagan included both publicly traded insurance companies and mutual insurance companies.[10] The demographics reflected in the charts below were culled from the surveys conducted by McLagan.

Gender demographics at insurance companies in the United States at all levels of employment. The chart below reflects the gender demographics for all levels of employment at publicly traded insurance companies.[11]

The chart illustrates that while women make up a majority of the employees at publicly traded insurance companies, most women at publicly traded insurance companies are situated within administrative positions. Furthermore, their representation in management, senior leadership, and executive management falls off dramatically as they move up the corporate ladder. Their numbers drop from 83 percent at the administrative level to just 15 percent at the executive management level.[12]

The chart below examines the gender demographics for all levels of employment at mutual insurance companies.[13]

Based on this chart, it appears that women at mutual insurance companies are just slightly better represented in the upper echelons of management than their counterparts at publicly traded insurance companies. However, similar to their counterparts at publicly traded insurance companies, women at mutual insurance companies predominately occupy administrative positions, and their numbers diminish dramatically as they move up the corporate ladder. In particular, their numbers drop from 86 percent at the administrative level to just 26 percent at the executive management level.[14]

Racial demographics at insurance companies in the United States. We now turn our attention to the racial demographics at publicly traded insurance companies. The chart below examines the racial demographics for all levels of employment at publicly traded insurance companies in the United States.[15]

This chart indicates that racial minorities are underrepresented at all levels of employment at publicly traded insurance companies when compared with their demographics in the overall U.S. population. In addition, the representation of racial minority groups drops off significantly in upper levels of management. Notably, 96 percent of executive management at publicly traded insurance companies is white even though whites are only 61.6 percent of the overall U.S. population. Unfortunately, there are no statistics available regarding the numbers of LGBT employees at publicly traded insurance companies. It would not be unreasonable to conclude that a significant number of LGBT employees at publicly traded insurance companies are closeted.[16] This assumption is further supported by the author’s personal knowledge of several closeted LGBT employees at publicly traded insurance companies.

The chart below examines the racial diversity at all levels of employment at mutual insurance companies in the United States.[17]

This chart indicates that racial minorities are underrepresented at all levels of employment at mutual insurance companies when compared with their demographics in the overall U.S. population. In addition, the representation of racial minority groups drops off significantly in upper levels of management. Notably, 93 percent of executive management at publicly traded insurance companies is white even though whites are only 61.6 percent of the overall U.S. population. Unfortunately, there are no statistics available regarding the numbers of LGBT employees at mutual insurance companies. As in the case of publicly traded insurance companies, it would not be unreasonable to conclude that a significant number of LGBT employees at mutual insurance companies are closeted.[18] As noted above, the author is personal aware of several closeted LGBT employees of insurance companies who are afraid to come out at work because they are worried about their job security.

Age demographics at insurance companies in the United States. This demographic analysis of the insurance industry would not be complete without reviewing the age demographics of both publicly traded insurance companies and mutual insurance companies. Included below is a chart analyzing the age demographics at all levels of employment at publicly traded insurance companies.[19]

The age demographics for publicly traded insurance companies reflected in the chart above are not surprising to anyone who has worked in the insurance industry in the U.S. The numbers above confirm that power at publicly traded insurance companies is concentrated among middle-aged executives between the ages of 45 and 65 years old. It is important to note that some companies have policies requiring executives to retire at 65 years old or older.[20]

The chart below analyzes the age demographics at all levels of employment at mutual insurance companies.[21]

Similar to the demographics of publicly traded insurance companies, the age demographics of mutual insurance companies reflected in the chart above are not surprising to anyone who has worked in the insurance industry in the U.S. The numbers above confirm that power at mutual insurance companies—just like at publicly traded insurance companies—is concentrated among middle-aged executives between the ages of 45 and 65 years old. As noted with respect to publicly traded insurance companies, some mutual insurance companies have policies requiring executives to retire at 65 years old or older.[22]

A Review of the 2016 Vault/MCCA Law Firm Diversity Survey

In 2016, Vault Career Intelligence and the Minority Corporate Counsel Association (MCCA) conducted a national law firm diversity survey in the United States and received responses from 225 law firms. Based on those responses, Vault and the MCCA published the 2016 Vault/MCCA Law Firm Diversity Survey Report. The 2016 report represents one of the most comprehensive diversity studies of any industry in the United States, which is why it is referenced here. The information included in the 2016 report can give us some perspective regarding diversity and inclusion issues in the insurance industry. Included below are data reprinted from the 2016 Vault/MCCA Law Firm Diversity Survey Report with permission from Vault and the MCCA.[23]

Below is a general summary of Vault and MCCA’s findings from the 2016 Law Firm Diversity Survey Report.

· The number of minority attorneys employed by law firms continues to grow at a slow rate; more than 15 percent of law firm attorneys are members of a racial/ethnic minority group.

· Nevertheless, lawyers of color remain underrepresented in the partnership ranks, as more than 90 percent of partners are white. While the 2015 partner class included a higher percentage of minorities than in past years, only one of every seven new partners promoted was an attorney of color.

·Overall, progress has been slow and uneven, and it has been especially elusive for African American lawyers, who enjoy few of the gains made by other racial groups. In fact, as of the end of 2015, black attorneys make up a smaller share of the law firm population than they did in 2007, thanks in part to declining recruitment and disproportionately high attrition.

· Even though Asians represent the largest group of non-white attorneys, they are less likely than black or Latino lawyers to be partners or to hold leadership positions at their firms.

· For the first time since 2008, law firms reported that new attorney hires included more Hispanic women than men and that nearly half of the Hispanic lawyers who made partner in 2015 were women.

· Women make up 34 percent of all law firm attorneys, and 8 percent of lawyers are women of color. Both figures are the highest reported at the time of the 2016 survey.

· Yet male partners still outnumber female partners by more than 3 to 1, and two out of three new partners promoted in 2015 were male.

· Despite gains in hiring and promotions, minority and female lawyers continue to leave their firms at a disproportionate rate. More than 20 percent of lawyers who left their firms in 2015 were attorneys of color, and 41 percent were women.

· The number of LGBT attorneys and individuals with disabilities reported by law firms continues to trend upward.

Summary of Vault and MCCA’s findings in the 2016 diversity report specific to minority men and women.

· The 2016 survey results show the highest percentage of minority as of the end of 2015—across all categories, from associates to equity partners, from summer associates to management committee members.

· According to participating law firms, non-white attorneys represent 15.65 percent of their population, an increase over the 14.99 percent reported in the previous year’s survey. Since 2007, the percentage of minority lawyers in law firms has grown from 13.81 percent to 15.65 percent.

· Minority lawyers represent more than 23 percent of associates (23.54 percent) and 8 percent (8.46 percent) of all partners.

· While their progress has been slower than that of their male colleagues, women of color make up a larger share of the overall law firm population than minority men. Of the 98,858 attorneys at 225 law firms survey-wide, 7,781 are minority women and 7,694 are minority men. Nevertheless, minority men continue to outnumber minority women at the partnership level by almost two to one. In 2015, law firm partners included 2,359 minority men (5.57 percent) and 1,225 minority women (2.89 percent).

· Lawyers of color are better represented at the equity level than they were in the past, in part because of an increase in promotions. Of 31,859 equity partners survey-wide, 2,509 (7.88 percent) are members of minority groups, compared with 2007, when just 5.62 percent of equity partners were people of color. Surveyed law firms reported that 1,915 lawyers were made partner in 2015; of those new partners, 273 (14.26 percent) were attorneys of color, including 146 men and 127 women.

· Representation of minority attorneys in law firm management is also at its highest level since 2007 and parallels the advances in the partnership ranks. The percentage of attorneys of color serving on law firm executive or management committees grew from 5.42 percent in 2007 to 7.50 percent in 2015.

· The number of new attorneys hired by law firms in 2015 included the highest percentage of attorneys of color reported since 2007. In 2015, nearly one-fourth (24.72 percent) of all new hires—including both laterals and starting associates—were members of minority groups, a solid increase over 2014 (23.37 percent) and more than 3 percentage points higher than the 21.57 percent reported for 2007.

· While hiring has increased among men and women alike, the 2016 results show greater gains among female attorneys. The percentage of minority women among attorneys hired increased from 12.15 percent to 13.29 percent, while among men the figure increased from 11.21 percent to 11.43 percent.

· As has been the case since 2007, firms are also hiring more minority women than men into their summer programs. The 2015 summer class included 954 (16.51 percent) female and 765 (13.24 percent) male minority law students. Overall, minority law students represented close to 30 percent (29.75 percent) of the 2015 class of 2L summer associates—the highest figure reported since 2007, and substantially higher than the 25.95 percent reported back in 2007.

· Where the data reveal less progress is in the retention of minority lawyers. Of the 10,205 lawyers who left their firms in 2015, almost 21 percent (20.76 percent) were attorneys of color. That figure is little changed from the 20.81 percent reported for 2014, which was the largest number to date. Minority lawyers in their first two years of practice are the most likely to leave.

· More than one-third (33.46 percent) of first- and second-years who left their firms in 2015 were members of racial or ethnic minority groups—a figure greater than that reported since 2008. Minority lawyers represented 25.53 percent of departures among mid-level associates (third- through fifth-years) and 24.03 percent of senior associates (those in their sixth, seventh, or eighth year) in 2015.

· Among women, the numbers are especially stark: Nearly 14 percent (13.78 percent) of the 2,888 senior associates who left their firms were women of color, and 14.20 percent of mid-levels were minority women. But the biggest jump was in departures at the junior level. Women of color represented 18.11 percent of first- and second-years who left their firms in 2015, a substantial increase over the 15.42 percent reported for 2014 and more than 2 percentage points higher than that reported for any previous year. Overall, law firms reported higher attrition numbers for women of color in the 2016 survey; the figures exceed those recorded for all past years.

· These figures are all the more concerning when viewed against the overall demographic data. Women of color represent just 7.87 percent of attorneys in law firms but 11.29 percent of attorney departures. Together, minority men and women represent less than 16 percent of all law firm attorneys, but they account for more than 20 percent of the lawyers who leave their firms.

Vault and MCCA’s findings in the 2016 diversity report regarding individual racial/ethnic groups.

            African American/Black Attorneys

· Notwithstanding an increase in the overall numbers of minority attorneys, progress for black lawyers remains elusive. According to the 2015 U.S. census, African Americans represent 13 percent of the U.S. population. However, they make up just 3 percent of the attorneys practicing at U.S. law firms, and that number has undergone a steady decline in the years leading up to the 2016 survey. As of the end of 2015, black lawyers represented 3.09 percent of law firm attorneys; although marginally higher than the previous year (3.05 percent), the figure is still lower than it was in 2007, when African Americans represented 3.62 percent of law firm attorneys.

· The decline is most visible at the associate level. African Americans made up 5.11 percent of law firm associates in 2007; by 2015, that number had dropped to 4.22 percent. Although the number of black female associates has been falling faster than the number of male associates, African American women still represent a greater proportion of the associate population than African American men. Of the 43,984 associates at law firms in 2015, 1,082 were African American women and 775 were black men.

· The only category in which the percentage of black lawyers has increased since 2007 is partners, although that figure still hovers around just 2 percent (1.99 percent in 2015). Advances at the equity level have been minimal; as of the end of 2015, black lawyers represent 1.76 percent of equity partners—only a 0.02 percentage point increase since 2014 and just 0.16 percentage points higher than in 2007. Most of these gains are among African American women, although black men still outnumber black women by nearly two to one among equity partners (1.14 percent to 0.62 percent).

· Of the 1,915 attorneys who were promoted to partnership in 2015, 62 (3.24 percent) were African American. While that figure reflects an increase of 0.21 percentage points over the previous year, it is still lower than the 3.49 percent reported back in 2007. Similarly, representation of African American attorneys at the management level has shown some growth but remains low. As of 2015, 2.26 percent of executive/management committee members were African American, compared with 2.05 percent in 2007.

· Fewer black attorneys serve on hiring and diversity committees than in the past. In 2007, African Americans represented 5.91 percent of attorneys on hiring committees and 17.83 percent of lawyers on diversity committees. According to the 2016 survey, black lawyers represent 4.67 percent of hiring committee members and 12.18 percent of attorneys on diversity committees.

· One factor in the declining number of black lawyers is diminished recruitment. Although the percentage of black lawyers hired in 2015 showed an increase over the previous year, from 4.52 percent to 4.86 percent, that figure remains well below the 5.61 percent reported for 2007. The decline is evident among both genders.

· Similarly, although the hiring of black law students showed a small uptick in 2015, the number is still lower than it was in 2007. African Americans represented 6.97 percent of the 2015 class of 2L summer associates, 0.3 percentage points below the figure reported for 2007.

· Even though attrition rates for African American lawyers have declined in the years leading up to the 2016 survey, from 5.76 percent in 2007 to 4.89 percent in 2015, black lawyers continue to leave their firms at a higher rate than members of other minority groups. The 499 African American lawyers who left their firms in 2015 represent 16 percent of the total number of black attorneys in law firms. By comparison, the number of Asian Americans who left represents 14 percent of their population, the number of Hispanic and Latino lawyers represents 11 percent, and the number of white attorneys 10 percent. Within each group, the rate of departure among women exceeds that of men.

            Asian American Attorneys

· The percentage of Asian American lawyers at surveyed firms has steadily increased over the last several years among both men and women at all levels. In contrast to Hispanics and especially African Americans, Asian American lawyers represent a larger percentage of the law firm population than of the American population as a whole. While Asian Americans make up less 6 percent (5.6 percent) of the U.S. population, they represent more than 7 percent of lawyers at the firms surveyed. According to the 2016 survey, 7.05 percent of law firm attorneys are Asian, compared with 6.69 percent in 2014 and 6.15 percent in 2007.

· More than 11 percent of associates (11.37 percent) are of Asian background, the highest figure reported since 2016. Over half of these associates are women. The number of Asian American partners has also increased in that time. As of 2015, 3.17 percent of law firm partners are of Asian descent, higher than the 3.01 percent reported in 2014 and the 2.16 percent reported for 2007. Asian attorneys represent 3.08 percent of equity partners, a 0.21 percentage point increase over the prior year (2.87 percent) and well above the 1.90 percent reported for 2007.

· Even though Asians represent the largest minority group among law firm partners, they remain underrepresented based on their share of the attorney population. The percentage of Asians among partners promoted grew from 5.62 percent in 2014 to 5.90 percent in 2015 and is higher than that for any other minority group. Yet, the ratio of partners to associates among Asian Americans is 0.27, lower than the ratios of partners to associates among both Latino lawyers (0.52) and black attorneys (0.45). In other words, there is just one Asian partner for every three or four associates, and one African American or Hispanic partner for every two black or Hispanic associates. In contrast, with a partner-to-associate ratio of 1.16, there is more than one white partner for every white associate.

· Asian Americans are also less well represented at management levels than other attorneys of color. Although Asian lawyers represent a much larger share of the law firm population than other minority groups—in 2015, law firms reported 6,970 Asian American attorneys, compared with 3,561 Hispanic or Latino attorneys and 3,052 African-American lawyers—they are less likely to serve on management-level committees. Of the attorneys serving on law firm executive committees, just 2.09 percent are Asian, compared with 2.26 percent who are black and 2.22 percent who are Latino. The numbers are similarly low for other firm-wide committees, with Asians representing 2.32 percent of partner review committee members and 3.78 percent of those serving on associate review committees.

· Nearly 11 percent of all new attorneys hired in 2015 (10.77 percent) were of Asian descent, slightly lower than the 11.00 percent reported for 2014, though still higher than the 9.87 percent reported for 2007 and much higher than the figures for other minority groups. And among summer associates, law firms reported that nearly 14 percent (13.76 percent) of the 2Ls hired in 2015 were Asian, the second-highest figure recorded to that point.

· Attrition numbers among Asian attorneys have fluctuated in the years leading up to the 2016 survey, but the latest increase puts the figure at a record high. In 2015, 9.52 percent of attorneys who left their firms were Asian, compared with 8.91 percent in 2014 and 8.24 percent in 2007. The increases were most notable among women. Of all lawyers who left their firms in 2015, 5.34 percent were Asian women, compared with 4.61 percent in 2014. And among associates, women of Asian descent represented 7.14 percent of all departures, the highest figure as of the end of 2015.

            Hispanic/Latino Attorneys

· While progress for Hispanic and Latino lawyers has been more consistent than that for African American and Asian attorneys, as a group they remain underrepresented in law firms. Hispanics are the largest minority group in the United States (17.6 percent, compared with 13.3 percent for African Americans and 5.6 percent for Asians), but they are the least represented in law firms, relative to their share of the overall population. Just 3.6 percent of law firm attorneys are Hispanic or Latino, compared with 3.1 percent for African Americans and 7.1 percent for Asians.

· That said, the 2016 survey results show the highest percentage of Hispanic and Latino lawyers to date. Hispanic or Latino lawyers represent 3.60 percent of all law firm attorneys, up from the 3.41 percent reported for 2014 and higher than the 3.13 percent reported in 2007. That increase is reflected among all categories of attorney and for both genders. The percentage of Hispanics among associates is 4.77 percent, and Latino attorneys represent 2.55 percent of all partners, compared with 1.86 percent in 2007. Among equity partners, 2.36 percent are Hispanic or Latino, compared with the 1.75 percent reported in 2007.

· In 2015, 3.81 percent of all lawyers promoted to partner were Hispanic or Latino. That figure represents an improvement over the 3.24 percent reported for 2014, attributable largely to an increase in the number of women promoted. Nearly half of the Hispanic lawyers who made partner in 2015 were women (35 women to 38 men).

· More Latinos also serve on management-level committees than in the past. In 2015, 2.22 percent of attorneys on executive or management committees were Hispanic, slightly lower than the 2.30 percent reported for 2014 but still higher than the 1.82 percent recorded back in 2007.

· One reason for the growing number of Hispanic attorneys is increased recruitment. Of the 14,896 attorneys hired by law firms in 2015, 797, or 5.35 percent, were Hispanic or Latino. That is the highest percentage reported in nine years. The most substantial increase was among women: in 2014, 2.11 percent of attorneys hired were Hispanic; in 2015, that figure climbed to 2.77 percent. For the first time, law firms reported hiring more Hispanic women than men (412 to 385).

· Despite a drop in the percentage of Hispanic students among the 2L summer associate class, from 6.05 percent in 2014 to 5.47 percent in 2015, the number reported remains the second highest as of the end of 2015. The number of female law students hired outpaces that of men; 2.84 percent of 2Ls in 2015 were Hispanic and Latina women, compared with 2.63 percent for Hispanic men.

· Another factor contributing to the gains among Hispanic and Latino lawyers is that their attrition rate, relative to their law firm population, remains lower than that of other minority groups. Hispanic lawyers represented 3.95 percent of all attorneys who left their firms in 2015. The rate of attrition among Hispanic lawyers, as a percentage of their overall law firm population, is 11 percent, compared with 14 percent for Asians and 16 percent for African Americans.

            Openly LGBT Attorneys

· The numbers reported for openly gay, lesbian, bisexual, and transgender attorneys at law firms continue to grow. Increased reporting of LGBT figures may have had an impact on the percentages reported, so not every numerical increase necessarily translates to an actual increase in the LGBT population.

· According to the 2016 survey results, openly LGBT lawyers represent 2.29 percent of law firm attorneys (2,260), the largest number reported since 2007. The majority (70 percent) of these lawyers are men. Among associates and partners, specifically, the numbers have been climbing since 2007, especially among men. LGBT attorneys represent 3.00 percent of associates, up from 2.74 percent in 2014 and well above the 1.98 percent reported for 2007.

· Within the partnership ranks as a whole (including both equity and nonequity tiers), LGBT lawyers represent 1.69 percent of partners—the highest number reported as of the survey—and they account for 1.72 percent of equity partners. A little over 2 percent (2.04 percent) of the partners promoted in 2015 were openly LGBT, notably higher than both the previous year’s figure (1.30 percent) and that reported in 2007 (1.18 percent).

· At the leadership level, LGBT numbers remain fairly low, though the 2016 survey results included higher figures than previous years. As of 2015, 1.63 percent of attorneys serving on management/executive committees were reported as openly LGBT. At 1.59 percent, the percentage of practice leaders who are openly LGBT is higher than any figure reported since 2008, the first year the  data were collected. LGBT lawyers represent 1.64 percent of attorneys heading U.S. offices, again a number higher than every other year as of this survey.

·  The 2016 survey also shows an increase in law firm recruitment. Among summer associates in 2015, the number of LGBT students climbed to its highest rate. Firms reported that 4.17 percent of 2Ls were openly LGBT, more than double the number reported in 2007 (2.01 percent). And of new attorneys hired in 2014, 2.70 percent were reported as openly LGBT. This figure is nearly twice the 1.43 percent reported in 2007.

· Firms also reported an increase in attrition among LGBT lawyers. The percentage of LGBT attorney departures among attorney departures in 2015 was 2.36 percent, the highest figure reported as of the survey. However, it’s worth noting again that at least some of the higher numbers are likely attributable to more widespread reporting rather than to an actual increase in the number of attorneys leaving their firms.

            Individuals with Disabilities

· Reliable data for attorneys with disabilities remain difficult to capture because of underreporting, although the numbers do seem to be trending upward. According to the American Community Survey (ACS), individuals with disabilities represent about 13 percent of the U.S. population. The Vault/MCCA survey data indicate that attorneys with disabilities represent less than 1 percent of lawyers at law firms, but a sizeable minority (about 30 percent of surveyed firms) do not disclose disability information. Of 98,858 attorneys survey-wide, 318 (0.32 percent) were reported to be individuals with disabilities in 2014. This reflects a small increase over 2014, when firms reported 0.26 percent, and is nearly double the 0.15 percent reported for 2007.

· Individuals with disabilities represent 0.29 percent of associates, 0.31 percent of all partners, 0.32 percent of equity partners, 0.29 percent of nonequity partners, and 0.45 percent of counsel. Each of these figures reflects the highest number recorded as of the survey. According to the 2016 survey, law firm partners promoted in 2015 included just two attorneys with disabilities (0.10 percent).

· Law firms report few individuals with disabilities at the management level. Among the 225 law firms that took the 2016 survey, just three lawyers with disabilities were recorded as members of executive/management committees (0.13 percent), one on a partner review committee (0.05 percent), and seven on associate review committees (0.21 percent). Among attorneys managing U.S. offices, 0.31 percent are individuals with disabilities. Lawyers with disabilities represent 0.36 percent of practice group leaders.

· Among summer associates in 2014, 11 students were reported to be individuals with disabilities (0.19 percent of the 2L class), and 28 attorneys with disabilities were reported among law firms’ new hires (representing 0.19 percent of all new hires). While those numbers are low, they are substantially higher than the figures reported in 2007, when firms reported hiring just 5 summer associates and 12 lawyers with disabilities.

· The number of lawyers with disabilities who left their firms increased in 2015, from 15 to 24, representing 0.24 percent of all attorney departures. That increase, however, may be as attributable to greater disclosure on the part of individual lawyers or firms as to an actual rise in the number of departures.

            Women

·  Law firms reported that female attorneys represent more than 34 percent (34.44 percent) of their population, the highest number as of the survey. That number had hovered close to one-third since 2007. About 45 percent (45.15 percent) of associates are women—a figure that has grown relatively little since 2007, when 44.66 percent of associates were female. Among of counsel, 39.39 percent are women, a slight increase from the 39.32 percent reported the previous year.

· Where gains are more evident is at the partnership level. Women represent nearly 22 percent (21.86 percent) of all law firm partners, a half point higher than the 21.34 percent reported in 2014 and more than 3 percentage points higher than the 18.46 percent reported back in 2007. Women represent more than 19 percent (19.45 percent) of equity partners, a 0.7 percentage point improvement over 2014 and well above the 16.05 percent reported in 2007.=

· In other positive developments, a higher percentage of women were promoted to partner in 2015 than in any of the previous eight years. In 2015, 34.57 percent of the partners promoted at participating law firms were women, compared with 34.56 percent in 2014 and 30.03 percent in 2007. In addition, at 26.44 percent, the percentage of women among all new equity partners in 2015— which includes lateral hires as well as internal promotions—was the highest as of this survey, almost two percentage points higher than 2014. Like minority lawyers, however, female partners are better represented at the salaried level than at the equity tier. Women represent 29.15 percent of nonequity partners.

·  In addition, over one-half of all permanent offers made to 2Ls in 2015 were given to female students (52.02 percent), representing the first time since Vault and MCCA began collecting the data that women received more than half of all offers. Although the percentage of women among summer associates who accepted their offer was lower (49.14 percent), it still represents the highest figure reported.

· The number of female attorneys who joined law firms in 2015—whether as laterals or as starting associates—also showed gains. The percentage of women among all new attorney hires increased by nearly a full percentage point over the previous year, from 41.28 percent to 42.25 percent, the highest number reported since 2010.

· Attrition is one area in which the survey results are less favorable for women. In 2015, the number of women lawyers who left their firms rose to 40.82 percent, from 39.97 percent in the previous year, representing the highest figure reported since 2011. Among associates specifically, the percentage jumped up again after having declined for four years. In 2015, 46.84 percent of all associates who left their firms were women, compared with 45.25 percent in 2014. The numbers increased among associates at the junior, mid-level, and senior levels. Women also represented 24.38 percent of partner departures in 2015, the highest as of this survey.

The Role of Implicit or Unconscious Bias

Almost everyone, including minorities, have implicit or unconscious bias. In light of the aforementioned research regarding the underrepresentation and attrition of various minority groups in the insurance industry and legal industry, it seems logical to question whether the underrepresentation is the result of natural phenomena or implicit or unconscious bias. There is no easy, one-size-fits-all answer to this question, and this analysis will not make any broad assertions regarding the underrepresentation and attrition of various minority groups in the insurance and legal industries. Instead, the author would like to encourage members of both industries to have an open and honest dialogue about these issues.

The concept of implicit or unconscious bias is widely misunderstood. People often become defensive when they are confronted with the notion that they could be implicitly biased against anyone.

Researchers at the Kirwan Institute at the Ohio State University explain that implicit bias refers to the attitudes or stereotypes that affect our understanding, actions, and decisions in an unconscious manner.[24] These biases, which encompass both favorable and unfavorable assessments, are activated involuntarily and without an individual’s awareness or intentional control.[25] Residing deep in the subconscious, these biases are different from known biases that individuals may choose to conceal for the purposes of social or political correctness, or both. Rather, implicit biases are not accessible through introspection.[26]

The implicit associations we harbor in our subconscious cause us to have feelings and attitudes about other people based on characteristics such as race, ethnicity, gender, age, perceived sexual orientation, and appearance.[27] These associations develop over the course of a lifetime, beginning at a very early age, through exposure to direct and indirect messages. In addition to early life experiences, the media and news programming are often-cited origins of implicit associations.[28]

Harvard University has thoroughly researched the concept of implicit bias through its program called Project Implicit.[29] The Project Implicit program offers an online test that anyone can take to measure the extent to which they have implicit bias.[30]

Research has shown that implicit bias is not exclusive to non-minorities.[31] It is often the case that women, members of ethnic and racial minority groups, and members of the LGBT community demonstrate implicit bias against their own group as a result of internalized sexism, racism, and homophobia or transphobia.[32] On a personal note, I took several of the implicit bias tests on the Project Implicit website out of curiosity, and I was shocked to discover that I have implicit bias against several groups, including African Americans, even though I myself am African American.

As it relates to the insurance industry and the legal industry, I encourage everyone to visit the Harvard University “Project Implicit” webpage to self-evaluate the extent to which you may have implicit bias. It is nothing to be ashamed of. Everyone has some level of bias. The important thing is to acknowledge it and to develop strategies address it. We should never allow implicit or unconscious bias to negatively affect our workplace or business relationships.

 We now explore the concept of “confirmation bias.”

The famous Nextions LLC confirmation bias study. There have been several studies that have examined the concept of “confirmation bias” with respect to the legal profession.[33] Researchers at Nextions LLC have defined “confirmation bias” as a mental shortcut—a bias—engaged by the brain that makes one actively seek information, interpretation and memory to only observe and absorb that which affirms established beliefs while missing data that contradicts established beliefs.[34]

One of the most famous studies examining confirmation bias in the legal profession involved 60 different law firm partners (who had previously agreed to participate in a “writing analysis study”) from 22 different law firms, of whom 23 were women, 37 were men, 21 were racial/ethnic minorities, and 39 were Caucasian.[35] While all of the partners received the same memo, half the partners received a memo that stated the associate was African American while the other half received a memo that stated the associate was Caucasian.[36]

The results of the study were shocking. The exact same memo for the hypothetical African American associate averaged a 3.2 rating.[37] By comparison, the exact same memo for the hypothetical Caucasian associate averaged a 4.1 rating.[38] Notably, the partners found three times as many errors in the hypothetical African American associate’s memo.[39] The comments on the African American associate’s memo were also much harsher by comparison.[40] For example, on the hypothetical Caucasian associate’s memo, partners often wrote “has potential” and “good analytical skills”;[41] whereas, on the hypothetical African American associate’s memo, partners wrote comments like “needs lots of work” and “can’t believe he went to NYU.”[42]

The Nextions LLC study illustrates that just by changing the perceived race of the individual, our view of that individual and the quality of his or her work can be altered dramatically.[43] The same analysis applies to gender, sexual orientation, and disability. It is important that we all take inventory of ourselves and keep our biases in check. We cannot completely eliminate our biases, but we can take better control of them once we acknowledge that they are there.

Suggestions for Promoting Diversity and Inclusion Within the Insurance Industry and the Legal Industry

Now that we have examined the demographics of the insurance industry and the legal industry confirming that various minority groups are underrepresented and often have higher than average attrition rates, and now that we have come to terms with the possibility that everyone—even minorities—have some degree of implicit bias, we must look at possible solutions.

As an initial matter, ignoring the issue will not make it go away. The underrepresentation of women, racial and ethnic minorities, and openly LGBT people in the insurance industry and the legal industry will not fix itself. We must deal with this issue directly. By taking direct action to address diversity and inclusion, we can build better relationships between employees and management and the clients that we do business with.

Included below are some steps that insurance industry professionals and law firm leaders can take to promote diversity and inclusion in their workplace:

· Appoint a professional to address diversity and inclusion in the workplace (a chief diversity officer);

· Establish a diversity and inclusion committee;

· Consult with a diversity and inclusion professional (preferably a law firm because of attorney/client privilege and discovery issues);

·  Provide diversity and inclusion training for employees and management;

·  Help diverse employees establish affinity groups;

· Establish a mentorship program for diverse employees; and

·  Leverage diversity and inclusion to further business development.

Each of the foregoing steps can facilitate a more diverse and inclusive insurance industry and legal industry. If you have any questions about any of the issues discussed in this article, please contact the author.

Terrance J. Evans is a partner in the San Francisco and Los Angeles offices of Duane Morris LLP.

*Please note that the views expressed in this article represent the views of the author alone. The author does not purport to speak on behalf of Duane Morris LLP. Terrance J. Evans published an earlier version of this article under the title “A Critical Discussion of Diversity and Inclusion in the Insurance Industry” in 2017 as part of the written materials that he prepared for the ABA Annual Seminar.

Endnotes

[1] Terrance J. Evans, a partner in the San Francisco and Los Angeles offices of Duane Morris LLP, serves as the vice chair of the firm’s Banking Practice for the Western United States. Evans is also the cochair of the Duane Morris San Francisco Diversity and Inclusion Committee.

[2] U.S. Census Bureau, Quick Facts.

[3] Please note that the numbers add up to slightly more than 100 percent because of rounding by the U.S. Census Bureau. See U.S. Census Bureau, Quick Facts.

[4] See James Peron, “How Many LGBT People Are There?  Should It Matter?,”
Huffington Post, Oct. 24, 2012.

[5] See U.S. Census Bureau, Sex, Race, and Hispanic Origin by Occupation 2012 (July 10, 2014); https://www.census.gov/people/io/files/Table%202.%20Occupation.xlsx; see also Mark Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Management, Apr. 11, 2016.

[6] See U.S. Census Bureau, Sex, Race, and Hispanic Origin by Occupation 2012 (July 10, 2014); https://www.census.gov/people/io/files/Table%202.%20Occupation.xlsx; see also Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[7] See U.S. Census Bureau, Sex, Race, and Hispanic Origin by Occupation 2012; (July 10, 2014); https://www.census.gov/people/io/files/Table%202.%20Occupation.xlsx; see also Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[8] See Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[9] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[10] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[11] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[12] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[13] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[14] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[15] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[16] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[17] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[18] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[19] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[20] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[21] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[22] Hollmer, “For Insurance Industry, Diversity Remains Elusive at the Top,” Carrier Mgmt., Apr. 11, 2016.

[23] 2016 Vault/MCCA Law Firm Diversity Survey Report. Unless otherwise noted, the information that follows in this section of the article is quoted or derived from the Vault/MCCA report. The data are reprinted by permission of the Minority Corporate Counsel Association and Vault. All rights reserved.

[24] See Kirwan Institute, Implicit Bias.

[25] Kirwan Inst., Implicit Bias.

[26] Kirwan Inst., Implicit Bias.

[27] Kirwan Inst., Implicit Bias.

[28] Kirwan Inst., Implicit Bias.

[29] See Harvard University, Project Implicit.

[30] Harvard Univ., Project Implicit, Preliminary Information. A link to the test is found on this webpage.

[31] Harvard Univ., Project Implicit.

[32] Harvard Univ., Project Implicit.

[33] See Nextions LLC, Research and Insights.

[34] Arin N. Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills (Nextions 2014).

[35] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[36] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[37] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[38] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[39] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[40] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[41] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[42] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

[43] Reeves, Written in Black and White: Exploring Confirmation Bias in Racialized Perceptions of Writing Skills.

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