While many companies say that diversity, equity and inclusion (DEI) is of paramount importance to them, there is still a disconnect between rhetoric and reality. After the murder of George Floyd in May 2020, $50 billion was pledged by corporate America to advance racial justice but to date less than $2 billion has been distributed. Diversity in law still lags behind many comparable professions, and for those who are passionate about trying to advance this cause, there is frustration with the glacial pace of change.
Over the last eight months, I have been working with a diverse team of writers, editors and designers as the Editor-in-Chief of the Black In-House Counsel Annual Report. The report is a US publication that surveys the state of the nation for black lawyers. While its focus is on the US, there are many universal themes and lessons that can be applied globally to help advance the cause of greater racial equity and inclusion. The three themes that were repeatedly cited during our research as being essential for meaningful change were:
- Data.
- Courage.
- Accountability.
Data
Unless you understand what is really going on in an organisation, it is hard to find the right strategies to fix the problems that exist within it. Although data works alongside qualitative perceptions, without the numbers to show where you are succeeding, and where you are failing, then progress will be minimal.
Courage
Once you have your data, you need the courage to act on it. The data discussed in the Black in House Counsel Annual Report represents an unprecedented opportunity for those who care about a more inclusive legal profession to understand where action is needed. More legal departments are seeking not only to understand diversity in numbers, but are also asking and looking for ongoing collaboration around the experiences of diverse lawyers who work with them, both internally and externally. For example, for external lawyers, are:
- The opportunities they are being given going to lead to equity partnership?
- They being compensated as they should be?
- They getting origination credit?
Accountability
Some suppliers are not keen to report their data and be held accountable by their clients. Similarly, some clients are not keen to delve into such details with their suppliers and are even less keen to look closely at their own departments. But both need to be areas of focus to create meaningful change.
Courageous leadership is needed now more than ever. DEI is not merely an add-on or something you get to when you have time. It is central to how many companies operate and to how they are measured. That means greater accountability from:
- Consumers.
- Investors.
- Shareholders.
- Regulators.
- The media.
- Public opinion.
Regulators
There is an increasing focus from regulators around the world on DEI data. Our interview with Chair Gensler of the SEC confirms that this is not going away. As he told us, environmental, social and governance (ESG) and human capital issues are now fundamental to how investors make decisions. It follows that an agency like the SEC, which is designed to safeguard the interests of investors, will make both issues an increasing area of focus.
Investors
Aside from regulatory scrutiny, investors increasingly look at these areas too. The largest institutional investors, such as BlackRock and State Street, not only want the companies they invest in to report on DEI data but to explain what their initiatives and strategies are.
Shareholder activists are also focused on these concerns and may see ESG and human capital issues as the ideal means to demonstrate that a company’s executives and its board are out of touch with the mood of the times.
While lawyers are generally risk averse, most of our content in this year’s Black in House Counsel Annual Report demonstrates that courage and taking bold action is what is needed from legal leaders, both in-house and in law firms. The risks associated with inaction will eventually end up outweighing the risks of being courageous.
