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In March, mass media and information firm Thomson Reuters and legal research firm Acritas released a report looking at diversity in corporate law firms. According to the report, low diversity remains an issue in many law firms and legal departments and a more proactive approach is necessary to solve the problem.
The report was based on research from the Legal Executive Institute, Acritas, the International Bar Association and the Corporate Legal Operations Consortium. Overall, the data revealed that both law firms and corporate law departments continue to under-represent female talent at the most senior levels.
According to the data, only 29 percent of legal departments have formal diversity programs and only 29 percent of law departments require the law firms they work with to provide diversity information. The report concluded that male in-house counsels are more likely to hire male external advisers and select women as their lead partner only 17 percent of the time. Additionally, women account for less than 20 percent of law firm equity partners and 25 percent of general counsel.
These findings are likely not surprising to many. Gender diversity remains a problem across a variety of industries in the United States. However, more focus is being placed on this issue than ever before and the federal government is stepping up to put the nation’s law firms in particular on notice.
At a legal industry compliance event this week, the head of the Office of Federal Contract Compliance Programs for the U.S. Department of Labor criticized law firms for poor diversity and inclusion practices.
“Law firms need to get their house in order,” OFCCP Director Craig Leen said at the April 10 event. “There is a big problem at law firms for women and women of color.”
Leen’s criticism centered around a recent study by the National Association for Law Placement. Like the recent Reuters report, the NALP study found that women are woefully underrepresented. Roughly 22 percent of equity partners are women, while only 1 percent are women of color. According to the report, minority women continue to be the most dramatically underrepresented group at the partnership level.
“These numbers are glaring, they are concerning, they are troubling, they are problematic, and they are systemic,” Leen said at the event. “They’re something that law firms need to take a look at, and it’s something it’s going to be a focus of OFCCP.”
The event was designed to help the OFCCP obtain insight on what federal contractors in the legal field experience when implementing and managing their equal employment opportunity requirements, and how the agency can help. The town hall was open to human resource managers, equal employment opportunity specialists, chief compliance officers, and other personnel in the legal industry and related fields.
Let’s remember that the OFCCP is tasked with enforcing the federal nondiscrimination and affirmative action requirements for federal contractors and subcontractors. This oversight includes law firms working with federal agencies and Leen said these firms could soon be under increased scrutiny.
Specifically, Leen said the OFCCP plans to issue guidance regarding the agency’s power to address problematic practices involving lawyers who are equity partners. According to the OFCCP director, issues surrounding promotions for equity partner positions would fall under the agency’s jurisdiction.
“The promotion of associates or nonequity partners to partner is something I think we would have jurisdiction over because we have jurisdiction over the employees who are being promoted to partner or not promoted,” Leen said. “Someone who’s not promoted to partner is still an employee. So, they’ve been harmed would be the argument if they’ve been discriminated against, particularly if that affects their compensation or their opportunities at the firm. Generally, I do think we have a hook here, which is the promotion hook, and we are going to be pursuing that when we look at firms.”
Based on Leen’s remarks at the town hall, the OFCCP could start seeking equity partner information in future audits as part of its analysis of promotions in order to determine whether these promotions are based on discriminatory bias. The OFCCP could begin looking at this issue as early as next fiscal year.