The Business Case for Diversity Research Project

  IILP is pleased to be working with the Association of Legal Administrators on this project.


The relationship between business and diversity within the legal profession is not a new concept. Since at least 1988, when then-Vice-President and General Counsel of General Motors Harry J. Pearce sent a letter to law firms with which General Motors was doing business stating that General Motors wanted to see minorities and women handling GM’s legal matters, through the 1998 Statement of Principle spearheaded by Charles R. Morgan, then Executive Vice President and General Counsel of BellSouth Corporation, the 2004 Call to Action initiated by Roderick (“Rick”) Palmore, then Chief Legal Officer of Sara Lee and now executive Vice President, General Counsel and Chief Compliance and Risk Management Officer for General Mills, and through other company-specific initiatives, corporate clients have been telling law firms that they value diversity among their outside counsel. Indeed, when the University of Michigan Law School’s affirmative action policies were challenged in Grutter v Bollinger, et al., in 2003, General Motors and other corporations filed amicus briefs setting forth the need and their commitment to the diversity of the legal profession.

Business Case for Diversity

Now, over twenty years since Mr. Pearce put forward the notion of a business case for diversity, most corporations and their law firms understand it. Any number of corporations survey their outside counsel in one form or another in an attempt to track and measure the diversity of their outside counsel. But few, if any, would say they are satisfied with their progress. Corporate clients continue to express frustration with the lack of diversity among their outside counsel. Law firm management questions whether their diversity efforts and successes have truly reaped a business benefit for their firms. And diverse partners in those firms express varying degrees of frustration and disappointment with the amount of business they have seen in light of the business case for diversity. Despite a business case for diversity, while some progress has been made, it appears to be insufficient in generating the desired outcome: a more diverse and inclusive legal profession.

Corporations, some of which have proven more adept at recruiting, retaining and promoting a diverse pool of lawyers than their outside counsel, suggest that the continued problems stem from inadequate commitment to diversity from a critical mass of law firms. Law firm management disagrees; many firms feel their commitment is more than adequate and sees the source of the problem as the limited rewards (in terms of increased business) that firms see. And diverse partners in firms of all sizes, including those in minority- and women-owned law firms, point the finger at inadequate or inconsistent valuation of diversity by both clients (and, in the case of large law firms, management). 

None of these are new arguments, new reasons, or new explanations for the less than satisfactory outcomes from the business case for diversity. At a given point they become circular and an exercise in further frustration. Continuing to do more of the same while expecting a different or better outcome becomes an exercise in futility.

Our Findings

The Institute for Inclusion in the Legal Profession (“IILP”), along with the Association of Legal Administrators (“ALA”), launched the Business Case for Diversity Research Project to examine how the business case for diversity has thus far impacted the three primary stakeholders:  corporate clients, law firms, and diverse partners. Over the course of five months, data was collected from the following:

  • 52 corporations representing 10.4% of Fortune 500 corporations;
  • 391 law firms representing 65.8% of law firms with 501+ lawyers and 39.8% of law firms with 251-500 lawyers on the National Law Journal’s list of 250 largest U.S. firms; and,
  • 1,032 diverse partners.

The study found that while a business case for diversity exists, understanding what it means and what expectations flow from it differ dramatically from one group of stakeholders to the next. To read the report and access a complimentary copy, click here.

Read the full Report: Business Case for Diversity

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