DEI in the Business of Law: Challenges and Progress

Diversity, equity, and inclusion (DEI) have become pivotal pillars driving transformative change within the legal sector. For decades, the legal industry has grappled with issues of representation, equality, and inclusivity. Law firms, traditionally known for their homogeneity, are now actively striving to create more diverse and inclusive work environments. This shift is not merely a response to societal pressures but also a recognition of the tangible benefits that diversity brings to the table. In recent years, there has been a notable shift in mindset and strategy as law firms recognize the imperative of fostering diverse and inclusive workplaces. Let’s delve into the multifaceted initiatives reshaping the DEI landscape, exploring the challenges and progress made in advancing DEI within the legal sector.

The Imperative for Diversity, Equity, and Inclusion in Law Firms

Law firms wield considerable influence in shaping legal norms, policies, and practices. For that reason, their commitment to DEI initiatives holds significant ramifications not only within their organizations but also across the broader legal ecosystem. Several factors underscore the imperative for prioritizing diversity, equity, and inclusion:

• Client Expectations: Corporate clients, governmental agencies, and nonprofit organizations increasingly demand diverse legal representation. They recognize that diverse legal teams bring a breadth of perspectives, innovative thinking, and enhanced problem-solving capabilities to the table. As a result, law firms that prioritize DEI initiatives gain a competitive edge in attracting and retaining lucrative clients.
• Business Imperatives: Beyond meeting client expectations, fostering diversity and inclusion is intrinsically linked to business success. Research consistently demonstrates that diverse teams drive innovation, foster creativity, and enhance decision-making processes. By harnessing the collective talents and experiences of a diverse workforce, law firms can better navigate complex legal challenges and capitalize on emerging opportunities.
• Social Responsibility: Law firms serve as pillars of the legal community and wield considerable influence in shaping societal norms and values. Embracing DEI initiatives aligns with broader social justice imperatives, signaling a commitment to equity, fairness, and inclusion both within and beyond the legal profession.

Challenges and Opportunities

While significant progress has been made in advancing DEI initiatives, challenges persist:

• Implicit Bias: Overcoming implicit bias remains a persistent challenge in fostering diverse and inclusive workplaces. Addressing unconscious biases requires ongoing education, awareness-building, and structural interventions to mitigate the impact of bias in hiring, promotion, and retention decisions.
• Retention and Advancement: Retaining and advancing diverse talent remains a pressing concern for law firms. Despite efforts to recruit diverse candidates, retention rates for underrepresented attorneys often lag behind their counterparts. Fostering an inclusive culture where all employees feel valued, supported, and empowered is critical to addressing this challenge.
• Intersectionality: Recognizing and addressing the intersectionality of identity is essential in advancing DEI objectives. Law firms must adopt a holistic approach that considers the intersecting dimensions of diversity, including race, gender, sexual orientation, disability, and socioeconomic background.
• Data Collection and Analysis: Comprehensive data collection and analysis are vital for tracking progress and identifying areas for improvement. However, collecting accurate demographic data and analyzing trends can be challenging, particularly in cases where employees are hesitant to self-identify or where data collection mechanisms are not standardized.

By the Numbers

Bloomberg Law’s third annual Diversity, Equity, and Inclusion Framework report assessed 55 firms across more than 85 metrics, each associated with one of the framework’s six core pillars: demographics, leadership and talent pipeline, recruitment and retention, business innovation and strategy, marketing, and diversity and inclusion in the community. The report’s key findings revealed the following:

• Nearly all firms, 97 percent, reported having a public statement regarding their commitment to diversity and inclusion, up from 91 percent last year.
• 8 out of 10 firms that submitted data this year require diversity within a pool of candidates for management and leadership positions; however, only a third have a specific, time-bound action plan to increase representation of diverse groups in those leadership positions.
• 72 percent of firms mandate and monitor that minority and women attorneys have equal access to clients, quality work assignments, committee appointments, marketing efforts, and firm events, up slightly from 66 percent last year.
• Just over half of firms recognized as members of the DEI Framework say that practice group leaders have diversity and inclusion goals as part of their annual performance reviews, but only 14 percent of firms that were not recognized have this requirement of their practice group leaders.
• 80 percent of the respondent law firms have a chief diversity officer (or the equivalent).

The National Association for Law Placement’s (NALP’s) annual Report on Diversity in U.S. Law Firms for 2023 showed continued overall advancement in the representation of women, people of color, and LGBTQ individuals within U.S. law firms, despite growth stalling in some areas within the summer associate classes. Highlights from the NALP report include:

• Women made up the majority of associates (50.31 percent) for the first time in the more than 30 years that NALP has been tracking law firm diversity data.
• 2023 saw the largest year-over-year increase in the percentage of associates of color—growing by 1.8 percentage points to 30.15 percent.
• At the partnership level, women now comprise 27.76 percent of all partners (a 1.1 percent increase).
• Black and Latina women each accounted for at least 1 percent of all partners; but overall, women of color still account for less than 5 percent of partners.
• Within multi-tier law firms, white men remain disproportionately represented within the equity partner ranks. In 2023, just 23.7 percent of equity partners were women. Additionally, only 9.6 percent were people of color.

Leopard Solutions, in its 2023 report Navigating and Charting Progress of Diversity within the Legal Industry Today, found the number of diverse entry-level hires in the top 200 American firms dropped from 2,371 in 2022 to 2,049 last year. The number of experienced lawyers from ethnic minority backgrounds brought in by the firms had a greater fall from 2,790 to 1,879. “Ethnic diversity hiring took a hit in 2023 as the overall atmosphere surrounding DEI initiatives became fraught in legal and political contexts,” said the authors of the report.

The firms in question “saw an overall 23 per[]cent decline in lateral hiring, but the decline in ethnically diverse lateral hiring was 31 per[]cent,” they added. The findings come after a number of large firms were forced to scrap or widen their diversity fellowships after being threatened with legal action by a group led by conservative litigant Edward Blum, who had previously won a Supreme Court victory against affirmative action at U.S. universities.

Perkins Coie, Morrison Foerster, Winston & Strawn, and Susman Godfrey all modified their programs to remove racial considerations from recruitment criteria after coming under attack by Blum. Adams and Reese ended its “minority fellowship” altogether. While those changes did not affect Leopard Solutions’ analysis, the figures show the gap between diverse and non-diverse hires in top U.S. law firms widening, after remaining largely steady between 2019 and 2021, and falling in 2022.

Conclusion

As the legal profession continues to evolve, the commitment to DEI will remain paramount, ensuring that law firms reflect the rich diversity of the communities they serve and uphold the principles of fairness, equity, and inclusion. Through collective effort, collaboration, and leadership, the legal profession can serve as a beacon of diversity, equity, and inclusion, setting a precedent for other industries to follow.