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BRING THE DATA: WHERE NEXT FOR DATA, TRANSPARENCY & DEI
BRING THE DATA
Where Next for Data, Transparency & DEI
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To move the needle on DEI we need to know what is working and where the challenges remain. With more clients now requiring DEI data from law firms, what are the best practices around asking for and using this information? And do legal suppliers that resist this move to transparency risk being left behind? By Catherine McGregor
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DATA: MANAGEMENT BEST PRACTICE
Data and its analysis are central not only to good management practice, but to managing DEI. W. Edwards Deming, whose work with Japanese companies in the 1970s helped make that country an industrial superpower, saw the significance of data to leadership when he said: “Without data, you are just another person with an opinion.” As an industry, law needs to make progress on diversity. Data is central to this, says leading consultant and strategic advisor Peter Zeughauser: “Unless we’re reporting and know where we are, how can we measure progress? If the legal profession wants to be more diverse, transparent data on DEI is an essential element of making progress. Sunlight is always the best antiseptic.” Increasingly, leading general counsel and chief legal officers see that the collection, analysis and use of data in
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management – both of their own teams and outside counsel – is going to be fundamental to meaningful change in DEI. But what sets apart those legal departments who are embracing the use of DEI metrics in the most forward-thinking ways?
BUY-IN FROM LEGAL LEADERSHIP
Firstly, it’s buy-in and involvement from the GC in discussions about DEI. If law firms choose not to participate in diversity data tracking and reporting, GCs will see that first-hand and have a lot of discretion that they can wield. For example, Tony West, the CLO of Uber, says, “Uber has a Preferred Counsel Program (PCP), and we ask for DEI data as part of that. If firms do not share their data, we’ve said, ‘Although we’d love for you to be a part of the program, getting that data is a prerequisite. Hopefully next year you’re able to share some information.’”
In the rare instances when Uber’s lawyers want to engage counsel outside of the PCP for very specialized services, that request must be escalated to West or the Chief Deputy General Counsel, Tammy Albarrán, and one of them must personally sign off on the engagement. This level of evaluation shows his team that it’s a significant choice to go outside of the PCP and also demonstrates to law firms the centrality of the PCP program. “It keeps us true to what we’re trying to achieve,” states West.
Don Liu, Chief Legal Officer at Target, agrees that for data requests about DEI to be meaningful, the leader of the legal department must be fully involved. “There’s no doubt; law firms can tell when this is a mere exercise that legal departments go through, and that the GC is not involved. When we started the project for sharing DEI data for legal in Minnesota, it was the three of us: Ivan Fong at 3M, Anna Richo at Cargill, and myself. The three of us have been very personally engaged in activities; not just reporting, but also sharing best practices – even worst practices, to the extent that an organization tried something and it hasn’t worked.” COLLABORATION NOT PUNISHMENT
For many years in DEI in law there have been discussions on whether it’s better to offer the carrot or the stick. What’s happening now is that clients are moving to a much more collaborative approach with their law firms, where the end goal is neither a reward nor a punishment, but rather figuring out practical solutions together.
This collaborative approach means that many of the most forward-thinking legal teams are collecting and analyzing their own legal department data as well as asking their law firms for theirs. This sends a strong message that ‘we are in this together.’ Law firms that do not want to share their data are potentially signaling to clients that
they do not want to collaboDon Liu, Chief Legal Officer rate for change in DEI. A willingness for companies at Target, agrees that for to examine their own data is data requests about DEI to fundamental for success in transparency around DEI, feels be meaningful, the leader of Don Liu at Target: “We need to walk the talk. We’re asking law the legal department must firms to become transparent be fully involved. and benchmark with each other; why would that logic apply to law firms, but not legal departments? There was some reluctance at first because how would we look comparatively, since we don’t know exactly what other legal teams look like? Our HR department was also nervous that this might start a trend for segregating and reporting based on departments: legal, finance, HR. That hasn’t happened and I do think that because the legal industry is far behind on DEI, this transparency and accountability is needed.” Uber’s Tony West also feels it’s crucial for clients to model the same behaviors they are demanding of their suppliers: “There are 15 attorneys on my leadership team. Twelve of them are women, four of them are women of color. You have to model the values you say are important, through concrete actions, if you’re going to lead with credibility.” “NetApp have been collecting metrics on diversity for a decade. We are at a different point in the evolution of the DEI, so now the metrics are deeper; they’re more pervasive; they have taken on a new life and a new focus.” — Connie Brenton
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Connie Brenton, Head of Legal Operations at NetApp, is used to working with data. Her organization is ahead of many of its law firms in this regard: “NetApp have been collecting metrics on diversity for a decade. We are at a different point in the evolution of the DEI, so now the metrics are deeper; they’re more pervasive; they have taken on a new life and a new focus.” She feels that law firms need to wake up to the fact that metrics are not going away and that they are invaluable in getting to the heart of an issue: “Metrics are a beautiful thing. They identify issues that organizations didn’t have any idea they had; issues that can be deep and pervasive and destructive.” But Brenton feels it’s important for law firms to understand that it’s not a punitive issue, so long as they are committed to learning and change and realize that their clients are on the same journey: “Nobody likes to report out metrics that are not flattering. It makes it easier to report out these metrics when we appreciate that we’re all in the same boat, unfortunately: both in-house legal departments and outside counsel.”
Firms that do not share DEI data are just delaying the inevitable, as well as missing a valuable opportunity for collaboration, feels Peter Zeughauser, long-time strategic advisor to many leading global law firms: “Sooner or later, more likely sooner, to maintain many important client relationships, firms are going to have to share their data with clients. Better to do it sooner and when you do that, engage the client in ways that you can work collaboratively to improve the data at the firm.” This can create a real competitive advantage: “Firms that are sharing data are also using their data to convince their partners that the firm needs to do better if they’re going to maintain and expand important client relationships,” he explains.
AN ASSERTIVE STANCE
Legal departments that are at the leading edge are taking a more assertive position with law firms. The message is clear that data equals transparency, accountability and, ultimately, progress. But it’s broader than just the data, asserts Don Liu; it’s about shared values. He says, “Firms who do not wish to engage in sharing of information on DEI make it virtually impossible for us to assess how they’re doing in DEI. It means it’s not a core value for that firm, and if we’re not aligned on values, we won’t work together. There’s no requirement that we have to work with firms that don’t believe in what we believe in.”
Connie Brenton feels that clients using their purchasing power is the best way to create change: “Law firms have consistently been responsive to requests from the customer that affect their business.” It’s also a great opportunity to deepen relationships with clients by seeing DEI as an opportunity for greater collaboration. She expands: “Working together will enhance our partnership. And this is an area where we really can combine forces with law firms and create joint solutions.”
Steady improvement and taking the long-term view are essential to DEI. Clients and firms need to measure progress and feel that both sides are committed to meaningful change. That’s why clients like Tony West at Uber feel that engagement and sharing metrics must be ongoing and backed up with meaningful discussions: “What we’re looking for is not a snapshot on diversity, where folks are in a given year, or at a given moment. We’re looking for a sustained commitment to diversity over time, with sustained improvement, and a genuine desire to move the needle.”
MOVING FORWARD
Over the next 18 months, the focus on data, transparency, and accountability regarding DEI in the legal profession is likely to grow further, mirroring a general trend in both business and wider society. Clients are not going to decrease their requests, particularly as operational efficiency becomes a greater area of scrutiny, believes
Connie Brenton at NetApp. She feels that DEI metrics are challenging for law firms, as are lots of other data requests, as firms are not evolved enough in how to capture and use data. Part of the issue is an unfamiliarity with the process and lack of resourcing: “Anytime you start capturing data at this level, you also have to put resource in. That’s what we’re chasing in this evolution. We know the identity of the problem: we have a systemic problem. You can’t just change this on a dime. But capturing metrics allows us to make that first determination of where effort should focus.”
The increasing importance of ESG in business is likely to make DEI (which falls under the ‘S’ for ‘social’) an area where there is more emphasis from both clients and law firms’ own potential future talent. Happily, most law firms are courageous change agents who see the value in these changes. However, some are still reluctant. RESISTANCE IS FUTILE
While the majority of corporations in the U.S. could be more transparent around their DEI data, that is starting to change – the number of firms which hold themselves to account through transparency and accountability around their DEI data has doubled since 2019. As this trend grows within those who comprise most law firms’ clients, how can the firms themselves resist? Why, indeed, would they want to?
One of the historical arguments against sharing data was that the firms’ HR systems used to be the only place where the data was available; it was private, with no other means of sharing. Now it’s everywhere. Most law firms already post a significant amount of information about their people on their websites, including photos, from which the ‘obvious’ type of diversity attributes can be reasonably identified. Entire work histories for individ-
uals are visible on platforms “The flipside of Big Law firms like LinkedIn. All this data is readily available for data being so white is that in-house scraping; this is a worldwide legal departments, the SEC, activity in which law firms cannot control the accuracy DOJ, they’re all becoming of the data or what happens to it. Some of the emerging more and more diverse.” technologies, such as Out— Macey Russell side Counsel Search, even give diverse attorneys the ability to promote themselves and be more easily found. Firms shouldn’t hide from what is already out there for anyone to see. Many firms complain about survey fatigue – but are not trying to solve the problem, or voice complaints only when asked questions they don’t want to answer. Many want credit for transparency when they are picking and choosing what to share and what to keep to themselves. Such selective transparency isn’t really transparency at all. This disconnect is going to cost law firms in the talent market, feels Macey Russell, a partner at Choate, Hall & Stewart, and a leading DEI advocate for many years. Younger generations are used to a world of greater transparency. For them, values such as DEI (and openness around this) may trump the traditional ‘money and prestige’ rewards of a career in Big Law. Law firms are not the only career options for ambitious lawyers, she cautions: “The flipside of Big Law firms being so white is that inhouse legal departments, the SEC, DOJ, they’re all becoming more and more diverse. In the SEC, about 33% of their in-house staff are minorities: a lot of them are people who left law firms. So, if you have that type of dynamic on top of a matter before the court, there’s the potential to see the other side of the fallout of all of this – how a lack of diversity can be a disadvantage.” Peter Zeughauser agrees: “Law firms that do not share data and therefore cannot establish that they are making progress will lose work, lose clients and lose diverse lawyers: it’s a triple whammy.” Fortunately, most law firms are transparent about their DEI data and see the value in this both for their own organizations and the wider legal profession. These firms also understand that the corporate landscape has changed. The rise of ESG means that metrics which even ten years ago were seen as ‘nice to have’ are now central to the success of global brands. This contributes to the inevitability
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of DEI data being normalized, says Zeughauser: “There is going to be more pressure to be more transparent on reporting on DEI and ESG. There’s a growing awareness throughout business and society of the importance of this, so that the lack of diversity, the lack of ESG awareness and activity, mean that the consequences of looking the other way, or keeping it murky so that nobody really knows what’s happening, are becoming starker.”
Transparency and accountability will be the yardsticks by which ESG metrics, including DEI, will be measured, and the reporting of data is a central tenet of this. The message is clear: bring the data.
EXPERT INSIGHTS Data Resistance
For that minority of firms that are slow to embrace transparency, these are the most common objections raised to sharing diversity data. We asked clients and leading industry commentators to give us their perspectives on these perceived problems – and why they needn’t be barriers to change. 1) DATA PRIVACY CONCERNS
This is usually the first objection raised. But many of the companies collecting data, whether they are clients or third parties, undertake rigorous data privacy assessments. Indeed, some of the clients involved in these efforts are data-focused, marketleading technology companies whose awareness of data privacy outpaces many law firms’ behavior in this space. The data analyzed for most projects is only used as aggregated data and all subjects need to agree for their data to be used.
Increasingly, refusing to provide their data is going to put law firms out of sync with the move to embrace transparency in a data-rich world. 2) SECURITY ISSUES
Again, many of those involved in analyzing DEI data are tech companies, whose awareness of security issues is more enhanced than many law firms. Full evidence of security protocols and proper use of data is always shared prior to data collection projects. 3) ‘IT’S OUR POLICY TO NOT SHARE THIS DATA WITH ANY THIRD PARTY’
Can this attitude really last in a world that is being so driven by data? Especially when the decision to share – or not to share – can be seen as reflecting where the firm’s priorities lie. Explains Macey Russell: “For those law firms who share their diversity data publicly, you know that DEI is a true core value of their organization. Because what they’re basically saying is, ‘This is important to us. It is a core value and not an aspirational value. We may take some hits, we may be criticized, but that’s okay. As opposed to firms that say, ‘We don’t want to put our data out there; if our clients don’t ask and don’t make any decisions based on our data, we’ll just keep it to ourselves.’”
Not sharing DEI data also makes the analysis of supplier DEI impossible and shows a lack of cohesion on shared values. That’s now a deal breaker for many high-profile clients. 4) PROTECTING THEIR PEOPLE
Some firms worry that in small data groups, such as female Black equity partners, people can be identified because there are only one or two individuals to whom those descriptors apply. However, such lawyers are often equally identifiable from a quick scan of the firm’s website. There’s also the question: Do people want this protection? From what, exactly – getting more work?
Russell, as a successful Black partner, feels that this attitude is laughable: “Corporations over the years have asked law firms to see bios of all the diverse partners so they can be profiled internally such as on an internal website. Clients wanted to be able to go to the firm’s relationship partner and say, we’d like this diverse partner on our matters. Some firms would say, ‘We can’t give you that information, that’s private information.’ But the joke is if the client asked the firm to send a bios of associates who work on transactions, they would send that to you in two seconds. That’s hypocritical. It also contributes to this growing sense of a continued reluctance to develop and empower diverse lawyers because it challenges traditional notions of how things work within a law firm.”
Don Liu also finds this argument hard to understand, since clients like himself are asking for reports of who is working on matters regularly and getting reports of that billable data. Since legal teams know mostly who their lawyers are, they can join the dots. It’s also crucial that clients know who the diverse talent is to be able to advance change: “We have a program where we try to identify promising diverse lawyers. We’ll work with law firms identifying the diverse lawyer and say, ‘We think Joe Smith is a fantastic lawyer and is very promising. Can we help you to develop that lawyer?’ How can we do that development work if law firms hide who their diverse talent are?”
Connie Brenton at NetApp agrees: “The information is readily available on their website. It just makes it more difficult for us, the client, to obtain because now we must do more. We can’t go to a central location to obtain this information. “Or we can run an RFP and we can ask for this information as part of that: we can get the data. It’s just a matter of how we ask for it.
