Doubling down on diversity can help law firms land big clients like Microsoft. Industry experts give two key steps to making firms more inclusive.

Burford CapitalJessica Woodhouse, VP of Burford Capital, said that many high-profile clients want to work with diverse law firms.
  • Law firms that are more inclusive and diverse are more likely to perform better than their less representative counterparts, and more GCs and in-house lawyers are actively seeking to work with diverse law firms, say experts from Clifford Chance and McKinsey.
  • The old-school culture at law firms is one of the biggest hurdles for achieving gender equality.
  • Some companies might hesitate to publicise information about diversity, but transparency and effective leadership are key for business. “Firms must be committed to transparency, full stop,” said Tiernan Brady, global inclusion director at Clifford Chance.
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Greater diversity at law firms can boost financial performance at law firms, win business with high-profile clients like Microsoft, and create a more inclusive work culture, according to legal and research experts.

Diversity and inclusion are sparking conversations across everything from media to restaurant industries. The legal sphere especially has long been regarded as one dominated by white males, inciting greater calls for change to shake up the traditional structures found in law firms.

Just 20% of equity partners at large US law firms are women, found a study on the gender gap in law, conducted by Burford. And, according to the National Association for Law Placement, only 6.6% of partners are racial or ethnic minorities. On top of this, a survey by Major, Lindsey & Africa revealed that male partners out-earn women by 53%.

At a webinar hosted by legal finance firm Burford Capital last Wednesday, panelists from McKinsey and Clifford Chance discussed how companies should continue to prioritise and leverage diversity – even, and especially, during the coronavirus pandemic.

There is a positive statistical correlation between diversity and company performance, said panelist Sundiatu Dixon-Fyle, senior fellow at the McKinsey Global Institute.

When it comes to gender diversity, the top quartile of diverse companies are 25% more likely to outperform the least diverse companies, according to the “Diversity Wins” report Dixon-Fyle and others at McKinsey authored in May.

And, the chances of outperforming in terms of profitability are boosted to 36% for more ethnically representative companies.

Because of these kinds of business incentives, some clients are actively seeking to work with diverse law firms, said Jessica Woodhouse, Burford Capital’s vice president.


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Microsoft, for instance, is one of the companies that’s stood out for its prominent list of expectations for outside counsel, establishing a formal law firm gender diversity program. Woodhouse said that the percentage of diverse lawyers working on Microsoft’s behalf increased from 30 to 48% in six years.

“It helps to be a leader,” she said, illustrating how diversity in law firms can improve client relationships.

Culture is one of the biggest hurdles to achieving gender equity at law firms

Law firms, known for their traditional hierarchical structures, are lagging when it comes to diversity.

Burford’s study on the gender gap in law found that nearly 60% of the more than 75 GCs and in-house lawyers surveyed cited factors like bias, historical inertia, law firm culture, and work-life balance as the primary obstacle for many female lawyers.

“It’s not a retention problem for women. It’s a promotion problem,” said panelist Tiernan Brady, global director of inclusion at Clifford Chance.

Despite modest advancements in diversity in recent years, women are 21% less likely to be promoted to a managerial role, according to Dixon-Fyle.

The number drops to 40% when ethnicity is factored in, underscoring the even greater barriers faced by Black women in the US – a consequence of different forms of discrimination, including sexism, classism, and racism, according to the McKinsey report.

Key tools for increasing diversity and inclusion: transparency and effective leadership

“There’s no silver bullet when it comes to diversity and inclusion,” said Dixon-Fyle.

But there are two key steps the panelists stressed as crucial to increasing representation within law firms.

The first is effective leadership, which is needed to change law firms’ traditionally rigid structure. Dixon-Fyle said that team leaders ought to set up acceptable norms within their teams, and actively solicit feedback from diverse talent.

Leaders must also be mindful of the cultures they’re operating in, added Clifford Chance’s Brady. They should step up to protect work-life boundaries for employees, especially given the changing work environment amid the pandemic.

The second is transparency about diversity within law firms.

“Firms must be committed to transparency, full stop,” said Brady, including releasing data on gaps in recruitment, retention, pay, and promotion.

“This is a permanent campaign. It’s never going to end and it won’t be fixed just by changing rules. You have to change the rules, you have to change the culture,” he said.

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