Article Review -
Why Global Law Firms Should Care About Diversity:
Five Lessons from the American Experience
Author: Prof. David B. Wilkins. Publisher: European Journal of Law Reform (2000).
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Review
Some people may see diversity as merely positive thinking or something that has no real bearing on the bottom-line. However, Prof. David B. Wilkins lays out a simple five-point plan how European firms can gain competitive advantages in the global marketplace, by examining America’s experience with diversity in the legal services industry.
Lesson 1: Size Matters
Law firms have experienced exponential growth over the past two decades. If international firms wish to continue to grow, they cannot do so without including women and minorities. In the US, women and minorities make up almost 70% of the students at prestigious law schools. It’s ultimately self-defeating for firms to have work environments that either exclude or are inhospitable to such a large percentage of the talent pool.
In a competitive economy, rival businesses, such as accounting and consulting firms, will also wish to lure away talented individuals who are equipped to offer sophisticated advice in the areas where law, business, taxation, and/or accounting intersect. Historically, few lawyers have demonstrated interest in moving to other practice areas—such as accounting firms—that were perceived to be less prestigious. Consequently, these firms have targeted women and minorities—groups that have historically felt “left out.” By making their work environment more welcoming, they’ve successfully lured a significant number of lawyers away from firms. Finally, the successful recruitment of lawyers into alternative corporate careers gives these businesses access to the social network and recruitment policies of some of America’s most prestigious law schools and universities.
Lesson 2: Managing the Culture Wars
The legal industry has seen an explosion of mergers in the past few years, both domestically and internationally. However, many firms don’t achieve the synergy that had originally desired; firms from the same country can have distinct and different practices and cultures, and this problem is exacerbated in the international context.
International firms that wish to create a successful multi-cultural work environment can learn lessons from America’s experience from integrating women and minorities. Often women and minorities leave firms because they feel that they are the victims of stereotypes and excluded from the “old boys club” where much of the wheeling and dealing occurs. Cultural integration will require not only a change in attitudes but also a change in the corporate structure.
Lesson 3: The Real Rules of the Tournament of Lawyers
The typical law firm structure is one where a firm hires a large number of associates. The associates will work for a period of six to ten years, and the “best” will then be selected to become a partner. This process has been compared to an economically efficient tournament, for associates will be self-motivated by the desire to advance, decreasing the costs of monitoring and training.
However, empirical evidence reveals that in order to succeed in this “tournament” one must have access to working on high-profile/prestigious projects and established relationships with the partners. Given the pyramid structure of law firms (with a small number of partners and a large number of associates) good work and mentoring are always in short supply. The few young associates who get this special training become firmly set on the partnership track, while the others are left to fall by the wayside. Human beings naturally favor people who look like themselves; consequently, women and minorities have a harder time forming these valuable relationships.
Examining the experience of women and minorities also indicate valuable clues concerning a firm’s overall retention rate. Firms have continued to raise the salaries of young associates in order to keep them at the firm. However, empirical evidence indicates that the high turnover rate—among all associates, regardless of race or gender—is not due to a “low” salary, but rather they don’t believe that they have a long-term viable future at these firms.
Ironically, as firms continue to raise salaries, attrition rates continue; often this is because firms wish to “get their money’s worth” out of the associates and increase the required number of billable hours that an associate must produce. This only burns out the associates faster.
Lesson 4: Bypassing Boundaries in the Boundaryless Career
High turnover rates demonstrate the need for firms to change the structure of their work-force. It’s impractical to expect highly-skilled (and highly sought-after) individuals to invest five to ten years of their lives at one individual firm, all on a “probationary” basis. Again, this is an area where the experience of women and minorities can help benefit the profession as a whole. Groups of excluded individuals have had to forge alternative routes to success. Identity-based organizations have an important role to play. Within these organizations, senior lawyers mentor and advise junior ones. These organizations not only give the participants a supportive environment where they can receive training and advice.
This support reduces the pressure that they feel to leave a firm, allowing firms to hold on to talented associates for a longer period of time. An associate who is active in outside legal/business organizations develops relationship capital, and this adds value to the firm by increasing the firm’s own network of potential clients.
Firms should also recognize that many associates have no intention of staying for the long-haul. Firms that develop more flexible working practices—such as contract work, part-time work, and the ability to work from home—will attract and retain more talented individuals.
Lesson 5: “Unbleaching” Professionalism
When defining what it means to be a “professional,” such as a lawyer, business communities often assume that one’s race, gender, and religion are irrelevant to their capacities as a lawyer. This is sometimes referred to as “bleached out professionalism.” Many firms subscribe to the belief that lawyers who ask that their identities be recognized when judging what constitutes a professionally accepted career path are engaged in pleading for special treatment. Furthermore, by stigmatizing those who have different identity-related commitments, firms risk stifling innovation and creativity.
Feminists have long claimed that the adversarial system of the court system, which is aggressive and winner-take-all, is biased against women. Although such assertions are controversial—even among women—those feminist scholars who have critiqued the current legal system were pioneers in the methods of alternative dispute resolution and mediation. The more consensus oriented approach to negotiation has been one of the greatest innovations in the legal profession over the past thirty years.
In the context of global firms, people from different countries are unlikely to work well together if some believe that they are stigmatized for holding ideals and practices that are inherently tied to their own national culture and legal-system. Those firms that choose to promote innovation and differing views of professional identity are well placed to gain competitive advantages in the marketplace.
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