Law firms should be focusing on growth through diversity in their workforce, challenging the legal industry’s appalling status that means it needs to catch up with other industries on diversity. While women make up 47% of all lawyers, this number falls to 33% when considering partners. Cultivating an inclusive and diverse work culture in the law is a social justice issue, but it can make a real difference to the global growth and financial performance of a firm. At Obelisk Support, diversity in the legal profession (or the lack thereof) was the very reason we were founded in 2010 and it still makes total business sense for us. This could be anecdotal but it’s not. It is reinforced by the statistical findings of a January 2018 McKinsey report, Delivering through Diversity.
An organisation cannot aspire or claim to be global without true inclusion and diversity (also referred to as I&D) throughout each level. Often I&D in the workplace is talked about in terms of targets and numbers, but it shouldn’t be just about bodies; there needs to be a clear and thoughtful approach to creating a diverse working culture and inclusive leadership.
Why Diversity is So Strongly Linked to Financial Performance
Why should firms concentrate so much of their efforts on growth through diversity? The link between diversity and company growth is not an unexpected one: A company can only really claim or aspire to be global with a global and diverse team to drive them. By employing people of different ethnic and social backgrounds, you bring in a broad range of talent and viewpoints to help gain better understanding of different markets, clients and societies at large.
In the McKinsey report, companies in the top quartile for gender diversity and ethnic and cultural diversity were 15% and 35% more likely to experience above average profitability. Exploring this correlation further, the more gender diversity within an executive team consistently correlated with higher profitability. Overall, companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability.
McKinsey’s hypotheses about what drives this correlation are that “more diverse companies are better able to attract top talent; to improve their customer orientation, employee satisfaction, and decision making; and to secure their license to operate—all of which we believe continue to be relevant.”
An ethically and gender diverse workforce attracts the top talent as it brings fresh perspectives from global enterprises and structural philosophies. Diversity brings first hand experience of other cultures and ways of working that can enrich and improve an organisation’s approach to all aspects of their work, from workplace culture to communications, client relationships to hierarchies and departmental structure.
Expanding Measures to Improve Diversity in the Law
Ethnic and gender diversity in the law still lags behind many other sectors. As frustrating as it might be, the industry is still trying to figure out the best approach to incentivising and encouraging diversity in the law. The typical starting point is targets, however it has been argued that targets in the judiciary are not effective. Writing in The Times, David Pannick QC states that though he agrees the lack of diversity of ethnicity age and gender present a real problem, but he believes targets would only serve as a distraction.
To some degree he is correct: there is little sense in implementing national targets when the focus should be on the factors that are not just preventing people entering the law, but also staying and progressing in their career. Going further than targets, some companies introduce incentives and punishments such as HP’s diversity mandate, which we previously discussed here. However, targets and incentives should not be the first point of call. We need to answer the questions as to why women are disproportionately leaving the law to have children/care for family. Also the motives need to be correct: with targets in place there is less focus on an organisation adapting to ensure it is a good environment for a diverse workforce and making the best use of that talent, and simply reduces it to good representation on paper.
How to Successfully Implement a Diversity Strategy
Diversity can be incentivised, but this needs to come with true inclusion and a vision for growth. This is a slower process focusing on the culture and attitudes within the organisation, and approaching the issue from a business perspective as well as a social justice concern can be more effective. The suggestions put forward in the McKinsey report for implementing a successful strategy for diversity are:
- Commit and cascade. CEOs and leaders must articulate a compelling vision, embedded with real accountability for delivery, and cascade down through middle management. This commitment can be solidified by making a formal pledge, such as the CEO Action Pledge for Diversity & Inclusion in the USA, which was started by a group of business leaders including the US chairman of PwC.
- Link I&D to growth strategy. The I&D priorities must be explicitly defined based on what will drive the business growth strategy. Leading companies do this in a data-driven way. This fascinating Forbes report on Innovation through Diversity features examples and case studies from companies such as L’Oreal, Deutsche Bank and Mattel demonstrating how each have leveraged I&D priorities to meet their business innovation goals.
- Craft an initiative portfolio. Initiatives in pursuit of the I&D goals should be targeted based on growth priorities, and investments made to both hard- and soft-wire the programs and culture of inclusion required to capture the intended benefits. Examples of initiatives employed by large corporations include Intel’s Diversity in Technology Initiative and Ericsson’s participation in TechWomen. Initiatives can be applied to smaller organisations at a local level too.
- Tailor for impact. I&D initiatives should be tailored to the relevant business area or geographic region context to maximise local buy-in and impact. If your firm deals with more than one locality or business area, initiatives need to be tailored, taking into account the priorities and/or cultural differences within each. This is where local, first hand expertise becomes vital, and it may be worth considering employing the services of a diversity consultant to ensure these are applied successfully.
All of these things can be applied to legal services and the judiciary. A clear commitment to reducing barriers to diversity from the top, recognising those values as being key to future success and global impact, and implementing a range of initiatives and targets once the problems and barriers in each sector have been identified and have begun to be addressed. Diversity in the law is in danger of being reduced to another buzz word, when it is central to performing better as lawyers, and being better as humans first.