Coca-Cola VP GC Outlines New Diversity Programme
On 28th January, Bradley M. Gayton, Senior VP GC at Coca-Cola wrote this letter to outside law firms, informing them of, what Bloomberg Law called, ‘one of the legal industry’s most rigorous outside counsel diversity programs yet’.
Gayton was concerned by a continued lack of diversity in new partner headshots and by reading that ‘Black equity partners won’t reach parity with the Black US population until 2391’.
He said that although the legal profession has ‘developed scorecards, held summits established committees and written action plans’, the results are scarce. Gayton put this down to good intentions being celebrated too quickly, rather than diversity and inclusion being treated as a business imperative. He explained that if it were treated as such, capital would be allocated, and investments would be made within the business to achieve inclusion and diversity.
Gayton stressed that the legal profession should be representative of the population it serves and said, ‘we are no longer interested in discussing motivations, programs, or excuses for little to no progress – it’s the results that we are demanding and will measure going forward.’.
As part of its mission to achieve parity, Coca-Cola outlines a list of initiatives including, but not limited to the following:
- Diverse attorneys will make up at least 30% of each billed associate and partner time (with the ultimate goal being that this increases to at least 50%)
- At least 50% of these will be Black attorneys
- The work performed by these diverse attorneys should contribute to their development and progression
- Firms who cannot meet the targets are encouraged to work with member firms of the National Association of Minority and Women-Owned Law Firms
- Managing Partners are expected to publish a ‘personal commitment to diversity, inclusion and belonging and related action plans setting forth measurable goals.’
Firms who fail to meet the commitment will be asked to provide a plan for meeting it. However, according to the guidelines, ‘failure to meet the commitment over two quarterly reviews will result in a non-refundable 30% reduction in the fees payable for such New Matter going forward until the commitment is met and, continued failure may result in your firm no longer being considered for KO work.’
Coca-Cola plans to assemble a panel of preferred firms in the first 18 months after implementing these incentives with selection being heavily based on the implementation of these guidelines.
Novartis Legal Services Preferred Firms Program
Coca-Cola isn’t alone when it comes to this proactive shift in the legal profession. A year ago, Swiss multinational pharmaceutical company, Novartis announced the Preferred Firm Program with a view to changing the way it worked with law firm and legal services providers to drive more diversity and inclusion in the legal profession.
Group GC of Novartis, Shannon Thyme Klinger, said, ‘We recognise that corporate legal departments have an incredibly important role to play in ensuring that the legal profession accelerates its efforts to make meaningful progress when it comes to diversity and inclusion.’
‘Building on our company’s public pledge to achieve pay equity and transparency by 2023, and supporting the UN’s Human Rights global LGBTI business standards, the third iteration of our Preferred Firm Program prioritized in its selection process firms with a demonstrably strong commitment to D&I and who were willing to stand by this commitment from a financial perspective as to all Novartis matters.’
The Novartis Preferred Firm Program states that ‘preferred firms will make specific diverse staffing commitments for each engagement (and in any event commit that not less than 30% of billable associate time and 20% of partner time will be provided by females, radically/ethnically diverse professionals or members of the LGBTQ+ community, with an expectation that such commitments will move to parity over the next several years.’
For firms who fail to meet the agreed-upon diverse staffing commitment, outlined in the Novartis Preferred Firm Program, ‘Novartis will withhold 15% of the total amount billed over the life of that specific matter.’
Please find the full press release here.
So, What Part Can You Play?
We asked Catherine McGregor for her thoughts on how the legal sector can put diversity and inclusion into practice:
Catherine is the author of the successful book focused on the business of law for legal departments Business Thinking in Practice for In-House Counsel: Taking Your Seat at The Table. She runs her own company Catherine McGregor Research working as a consultant to law firms and legal departments around the world. Her work focuses on a range of areas including business thinking and law; the future of law; human centred skills; leadership; inclusion and diversity. Prior to moving into the legal sector, Catherine gained a Ph.D and was a lecturer at universities in the UK and USA, including the Museum of Fine Arts School in Boston.
Prior to moving into the legal sector, Catherine gained a Ph.D and was a lecturer at universities in the UK and USA, including the Museum of Fine Arts School in Boston. Her website is www.catherinemcgregor.co.uk
Clients hold more leverage in this regard than many think they do. Over the next few years, more and more UK and European clients will start to use their buying power to create more inclusivity.
I think many in-house teams need to do some internal soul searching about the purpose of inclusion and diversity efforts and how that can be actioned both externally and internally. The same will be true of their suppliers. It’s really fundamental to not see D&I as something extra to the day job –the most successful D&I efforts are those which are linked to the purpose and the culture of the team and the organisation and made measurable and actionable.
Understanding the problem is a good starting point and many clients collect data, so suppliers provide it. The introduction of the UK version of the American Bar Association’s Model Diversity Survey will make collecting metrics much easier and more uniform for both clients and their law firms.
It’s important for law firms to understand that it’s not enough to emphasise D&I and collect and send data during the pitch or panel review, then never mention it in review meetings or day to day interactions. Don’t spend time and effort trying to play the numbers or hide issues to appear better than you are, when it would make more sense to collaborate and learn from your clients. A great example of this is Barclays D&I consortium which is a collaboration between Barclays Legal team and their panel law firms to work together to drive inclusion and learn from each other.
Where many efforts fail is when organisations just look at the optics and not the causes. We see people pulling out the stops for International Women’s Day but what about the other 364 days?
Examine all the operational stages in your culture and how it operates, by asking yourself these questions:
Pipeline and hiring
- If you do not have many diverse lawyers or they leave what is it about your culture that might make the team or the organisation less welcoming and inclusive than it can be?
- Do all your trainees fit into a mould?
- If so, how will your firm be able to display the creativity and innovation clients need in the 21st century unless you can get more diversity of thought and perspective?
- Examine if there is a particular stage of the hiring process where you are losing diverse talent- is there a way this can be changed to be more inclusive?
- Is a focus on certain grades and academic attainment hampering your ability to hire a full range of future-ready talent?
- Are there ways you can partner with your clients to change this? It won’t only be doing the right thing but will also be a great BD opportunity.
Tip: One law firm found that ethnic minority candidates were doing well until the in-person interview. They worked on changing that experience so that it did not unconsciously discriminate against diverse talent. Introducing more diverse colleagues into the hiring process can definitely help with this.
- Who is getting the key assignments?
- Research has found that diverse lawyers are more likely to get assigned ‘housework’ and less ‘glamour work.’ That’s more behind the scenes legal work versus fewer headline deals or cases with face-to-face interactions with clients. Does this ring true for your firm?
- Some firms are now experimenting with blind assignments for associates. Is this something you might try?
Tip: Many clients now go further and are insisting on a certain percentage of diverse talent on matters. In the US more and more clients are also asking who gets paid and who gets the credit for their matters. If diverse lawyers act on their matters but are not getting credit for this- clients are asking why. This trend will come to the UK as well.
- Is your leadership team exclusively white and male? That’s sending out an important message to both your diverse talent and your clients. Interrogate how you are defining leadership.
- Is it actually skewed towards one identity group over others?
Tip: Interestingly, leadership research now suggests that many traditional aspects of leadership, as measured in promotions, focuses too much on the window dressing of leadership versus deep-seated aptitudes. This means that often what is measured are qualities like overconfidence which can be a highly negative trait once in a leadership role.