In-house on law firm D&I: 'we want diverse teams'

In an unexpected step forward for diversity and inclusion in the legal industry late last month, Coca-Cola updated its outside counsel guidelines, requiring that its US law firms take concrete steps towards promoting diversity within their ranks.

Bradley Gayton, senior vice president and global general counsel at Coca-Cola in Atlanta, made the announcement in an open letter published on January 28. He set out that at least 30% of billed lawyers should be from diverse backgrounds, among other things.

Speaking to Managing IP, Gayton made it clear that this decision was driven as much by business considerations as ethical and moral ones.

“The data is clear: diversity is a business imperative,” he says. “Quite simply, the work is stronger, and we achieve better business outcomes with a diversity of thought, experience and perspective on our matters.”

• What black law students want from IP firms
• Special report: Diversity and inclusion in IP
• Five ways IP firms furthered diversity and inclusion last year

Growing diversity demands

Coca-Cola’s diversity demand for its external counsel is the most recent and probably the most prominent example of a company using its financial clout to enhance the careers of underrepresented legal professionals. It is certainly the strictest example.

But it’s not the first time a company has made demands for diversity and inclusion and, according to in-house counsel, it probably won’t be the last.

Four in-house attorneys, including the head of IP at Novartis and a senior patent counsel at Facebook, say they’ve ramped up their diversity expectations for law firms in some way over the past year, some in reaction to George Floyd’s death and the Black Lives Matter protests in 2020.

Most agree with Gayton that demanding diversity from external counsel is as much about getting the best bang for their buck as it is about morals, and some even suggest that more companies could start to follow Coke’s example – making this the start of a long-lasting trend.

“In my view, law firms will need to make diversity and inclusion a priority,” says Gilbert Wong, associate general patent counsel at Facebook in California, who leads a number the IP department’s diversity initiatives. “Over time, getting more diverse teams to work on IP is just something they’ll have to do.

“Companies operate globally and diverse legal teams ensure that the advice they give to their clients is informed by multiple perspectives so that they minimize blind spots.

“Without increased representation of minority groups in the legal profession, we will continue to see the issues of systematic racism that were highlighted in the events of last year.”

The assistant general counsel at a financial services company in the US adds: “Law firms need to buckle up and get ready for the ride. We want diverse teams, and this move towards demanding diversity is just getting started.”

If law firms want to attract intellectual property clients in the future, they’ll need to double down on their recruitment of diverse associates – which means, according to black law students, that they will have to focus on creating strong cultures of diversity and inclusion across their businesses.

It won’t be easy. Gayton acknowledges that attracting top talent from systemically underrepresented groups is challenging because it requires additional thought and a willingness to challenge long-held assumptions.

“But we can’t continue down the current path and expect a different result. We must consider how we hire, allocate work, and assign credit in order to attract and retain the top talent.”

Divergent diversity approaches

Out of the five senior in-house counsel this publication spoke to – excluding Gayton at Coca-Cola, who already publicised his company’s intentions on this matter – one said his company hadn’t implemented a process to demand or at least monitor law firm diversity this year.

Ken Korea, who was the head of Silicon Valley IP at Samsung until recently, says his former company’s focus when hiring external counsel is talent.

He notes, however, that because IP tends to be more diverse than other fields in California, the external counsel that worked for Samsung were often from underrepresented backgrounds anyway.

“You typically see a lot of diverse attorneys in IP,” he says. “Some of the top practitioners in IP including Morgan Chu at Irell & Manella, William Lee at Wilmer Hale, Juanita Brooks at Fish & Richardson and Bijal Vakil at White & Case are from diverse backgrounds.

“I’m not really aware of any hard dictates on the general counsel side at Samsung like there are now at Coca-Cola. But you typically see a lot of diverse attorneys at the IP firms that work for the company.”

Every other business we spoke to had brought in some sort of new process. One chemicals company in the US, for example, changed its IP law firm request-for-information process this year to include questions on diversity and inclusion.

Data and diversity

The senior IP counsel at that company says the IP department now asks its law firms whether they have diversity and inclusion policies, what their statistics are like, and to provide example of how their commitment to diversity improved their services to, or relationships with, clients.

He adds, however, that while outside counsel have been honest and forthcoming about their diversity policies and related statistics, they’ve struggled to answer the last question, which has been disappointing.

“That suggests to me that diversity is still a task to be checked off rather than a policy ingrained into the firm’s culture, which manifests itself naturally in the flow of everyday activity,” he says.

At Facebook, the legal department expanded its law firm survey, which includes questions on diversity and inclusion, to include external counsel working on patent matters. This was done after the IP department contacted the company’s legal operations project manager and asked for its external counsel to be included.

In February 2020, Novartis launched its Preferred Firm Program for legal services, which required firms to make specific diverse staffing commitments for each engagement.

The programme set out that in any event, a law firm had to pledge to assign no less than 30% of billable associate time and 20% of partner time to women, racially or ethnically diverse professionals, or members of the LGBTQ+ community.

“Diversity and inclusion is important across the business,” says Galit Gonen, head of IP at Novartis. “We should be having a positive impact on society on many fronts, including this one. It is part of our culture and our DNA; it’s not just a nice to have.

“So of course we’ve taken concrete steps to promote this in our business and in others,” she adds.

Clearly, Coca-Cola is not the only company law firms have to reckon with when they consider diversity and inclusion.

Law firms will in all likelihood have to embrace diversity in a way like never before in the near future – lest they want their top clients to replace them with law firms that have.

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