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A new tool for D&I: A focus on diverse suppliers in the legal sector

Catherine McGregor interviews Joel Stern, CEO of NAMWOLF (National Association of Minority and Women Owned Law Firms).

The InterLaw Diversity Forum is in the process of adapting the American Bar Associations’s (ABA) Model Diversity Survey for the UK. The ABA Model Diversity Survey has been in use in the US for four years, and currently has 117 corporate signatories with 400 law firm users. The Model Diversity Survey is a supplier diversity questionnaire which corporates and financial institution signatories require all their panel firms/legal service providers to fill out. The purpose of the survey is to serve as the standard for law firms’ reporting of their diversity metrics. For more information on the Model Diversity Survey please see here.

As part of the development of the Model Diversity Survey for the UK, the InterLaw Diversity Forum is preparing to launch an accreditation programme for diverse-owned law firms and other legal suppliers in the UK. We wanted to take this opportunity to speak to our inspiration in this space – Joel Stern the CEO of NAMWOLF. Joel spoke to us about why a trade association for diverse-owned law firms was formed and why general counsel need to consider diverse-owned businesses as part of a strategy in being a smart and inclusive client.

Firstly tell our readers about NAMWOLF?

Joel Stern(JS): NAMWOLF stands for National Association of Minority and Women Owned Law Firms. It was founded in in 2001 by Emory Harlan, who was an African American partner at a big law firm who had left and started his own law firm. Today NAMWOLF is a nonprofit trade association, made up of over 195 firms that are all certified as truly minority, women, and/or LGBT owned.

Why do we need this? Even today the numbers with respect to the hiring and retaining of minorities and women are very bad in the US and in other countries as well; Emory wanted to provide an organization where these amazing minority and women owned law firms could get branded, and also get better introductions into Fortune 500 corporations and government entities. It’s worth remembered that many corporations, and the government, in the United States have something called supplier diversity initiatives, which are initiatives at corporate level, much bigger and broader than just legal. These programs are all premised on the need to give minority and women owned businesses the opportunity to compete for business from the Fortune 500 corporations. The programmes were grounded in the notion that minority and women owned enterprises have historically been economically disadvantaged. Diverse supplier programmes began to ensure that corporations got the opportunity to see these great companies and people in action. However, at the time nobody in legal thought that they were supposed to adhere to the programme; in other words, legal was not baked into the same concept of giving these businesses the opportunity to compete for and win the business.

So, in a nutshell, NAMWOLF is a razor-like focus on diversity and inclusion, but in the legal supplier diversity realm. You take these corporate supplier diversity initiatives, you now include legal services and tier two legal providers, and you get internal legal groups at corporations excited about adhering to the supplier diversity initiatives by giving minority and women owned businesses the same opportunity to be hired. When we started in 2001, there were five to ten law firms that were part of NAMWOLF and a few companies that were interested, including mine at the time, Accenture: I brought NAMWOLF to Accenture in 2003 when I was deputy general counsel and COO legal there. Today, we have hundreds of Fortune 500 corporations and governmental entities actively engaged and giving our firms the opportunities to compete for and win the business.

Given the dominance of focus on Big Law, why are these smaller firms an important part of the hiring picture for legal teams?

JS: Well certainly in the US, and it’s probably the same in the UK, law is behind the medical profession and accountancy in hiring and retaining women and minorities. This suggests we have a problem with respect to minorities and women in legal practice. Many women and minority lawyers are leaving big law in much greater numbers than white men. Therefore, one of three things are happening: one they're leaving the practice of law altogether; two they're going in- house, which is fantastic, or three they're showing the courage and entrepreneurial spirit to start their own law firms. The reason that supplier diversity is so important is that, if you want to at least aspire to build up the numbers of minority or women attorneys in your profession that are not only surviving but thriving, buyers of legal services need to support these minority and women owned law firms and other suppliers.

The rationale for supporting them is both professional and moral. What NAMWOLF does and the InterLaw Diversity Forum’s new initiative will do is give these firms the same due diligence that we gave them when they were in big law. It’s a smart buying perspective, diverse lawyers leave these big law firms and they start their own law firms, but they have the same pedigrees and CVs that they had in big law. They just want the opportunity to show general counsel how great they are in their own new environment. It's also good for big law firms. Because what you see, once in a while, is that diverse lawyers start their own law firms, they do great things and continue to show how terrific they are, then big law will hire them back at a higher level than when they left.

What makes NAMWOLF different to other general supplier diversity initiatives and why are more and more legal departments engaging with this thereby making diverse suppliers a key part of their purchasing?

JS: What is central to NAMWOLF is not just the certification that you are truly diverse, but the very onerous vetting process to let firms into NAMWOLF. So, it's not just minority, women or LGBT majority ownership, but that you have to go through a qualitative test to ensure that you are the type of firm that's already delivering great services to Fortune 500 corporations.

In discussions around the future of law and the focus on legal technology, much of the genesis for that focus lies in driving efficiency and cutting cost. Could working with diverse suppliers, who will generally be smaller because they are outside of Big Law, not only be a diversity win but an efficiency win, as well? How much is that part of the attraction to corporate clients that work with NAMWOLF and its members?

JS: I would argue that using NAMWOLF Member Firms gives the buyer of legal services three benefits. First, you are getting amazing quality legal services. Second, the value is often more than what you will get from “big law”. And third, you are supporting supplier diversity initiatives, which are a critical piece of the solution to what ails this profession. It is this value proposition that makes our case so compelling.

With respect to value, the efficiency aspect is very much an aspect of purchasing services from more agile diverse suppliers. A real-life example exists today with COVID. Typically, our firms were much more nimble, flexible and adaptive to deal in the new norm. Many of them already knew how to operate virtually. It was much easier for our firms to move to virtual life than some of the big law firms that are still trying to figure it out, because our firms are, for the most part, smaller and already thinking in a more agile way. They were much better able to adapt to COVID-19 in a faster way without any degradation of quality or response time. The other point is that smaller firms have less infrastructure. And it's easier when you hire them, too, as their brand is more clearly defined. Any law firm which is more than a couple of hundred people will have pockets of excellence, pockets of good, and pockets of mediocrity. Smaller law firms can't suffer fools. In a law firm with 15 or 20 people, the people that own that law firm know everything that everybody is doing from the standpoint of how good they are: both from a substantive perspective and client service perspective. As we move to the virtual world, and I do think this is going to be a permanent shift, smaller firms again are going to be much better positioned to deal with all of the issues associated with being virtual.

Another example is real estate. Some of these biggest firms in the US own some of the most prime real estate in the biggest cities in the world. Real estate equates to cost, which equates to something that the buyers of legal services are focused on containing often equal to the quality they are seeking, So, by buying services from diverse suppliers, general counsel can support both the drive for greater value and the drive for greater diversity and inclusion at the same time without sacrificing quality.

Joel, can you share some anecdotes on success for diverse suppliers from NAMWOLF’s history.

JS: From a growth perspective, from 2001 to 2020, NAMWOLF has grown to almost 200 law firms. We've also grown from five to 10 corporations and governmental entities that support us to hundreds of corporations that support us and know who we are and know what we do. We have over 145 NAMWOLF Partners that are in-house counsel groups committing to give at least five percent of their outside counsel budget to minority and women owned law firms. Another example is the the Inclusion Initiative: We currently have 33 corporations, some of the biggest in the world, that are actively engaging minority and women owned law firms in a myriad of practice areas. In seven years, these 33 companies have given minority and women owned law firms over a billion and a half dollars. These companies include: Bank of America Coca Cola, Google. NBC Universal. Accenture, Wells Fargo and Prudential.

Another example comes from a very large automotive corporation that two years ago wasn’t aware of NAMWOLF and our firms. In a two year period, they become a sponsor, they’ve come to our meetings and they've used over 45 of our law firms and counting. They have also created an internal rule (similar to the Mansfield Rule, the legal version of the Rooney rule where law firms commit to ensuring diverse candidates make up at least 30% of the candidate pool for leadership roles) with their legal department that every single time they need a law firm or are looking for a law firm that half of the law firms that they interview will be minority and women, and as a result of that they're engaging several minority and women owned law firms.

These two examples clearly make the case that Fortune 500 corporations are aware of NAMWOLF and taking advantage of what we have to offer to get outstanding legal services from certified minority and women owned law firms.

In terms of the legal profession and its need for greater diversity and inclusion, can general counsel show they are truly serious about change by buying form diverse suppliers?

JS: By giving business to these minority or women owned law firms and taking away business from big law firms, you're basically taking a stick approach. It’s showing big law that they need to do more to both retain the minorities or women that are currently in their law firm and attract more diverse talent or they're going to lose revenues and ultimately profits.

It’s a pivotal moment to act on this for general counsel. Due to the resurgence of the Black Lives Matter movement, we may be hitting a tipping point where we now have more people that recognize that not only do we have inequality in our respective countries but we also have inequality in the legal profession. But you can't solve for the inequality of the legal profession if you're missing a huge piece of the puzzle, which is diverse talent that are starting their own law firms.

We’ve heard so much over the years about initiatives from general counsel, the various letters etc. But, if we look at where we are, and when I speak to minority, lawyers, both in the US and UK, it can feel that there's a lot of talk but still not enough walking the walk when it comes to hiring. Given that we're at a potential crisis point with the COVID-19 issue throwing a lot of things up in the air, what would be your message to purchasers of legal services be who want to get serious with this and get beyond the hype? Since Black Lives Matter it does feel that there's been a lot less patience with corporate posturing. Do you think that's going to extend to law as well?

JS: It is already, but the question is, will it lead to results? We don't know that until we see the numbers, a year, two years, three years down the line. I am an optimist, but I've seen several calls to actions which were just calls without action. And I think that sends a worse message than saying nothing because basically, it's easy to throw out the words it's difficult to implement. So yes, I think you have to acknowledge a healthy amount of cynicism from both women and minorities in America that this is just another call to action that will die out in a few months. But the optimist in me tells me that this appears to be different. And the reason it appears to be different is because I am hearing, like I've never heard before, acknowledgement from white males of their privilege and an acknowledgement of an understanding the Black Lives Matter movement which they did not, for the most part, understand two years ago. If we continue on that trend and start to become better educated and seek to understand the stories of black people in the legal profession, and the inequalities that they have suffered for years then we, as a profession, can actually start solving.

However, you have to do it programmatically and commit to making both systemic and institutional changes. You've got to have carrots and sticks and reward good behavior while punishing bad behavior. We hear a lot about corporations that reward law firms for doing the right thing. But unless you're willing to drive business away from those law firms (or take it away in its entirety) if they're not meeting metrics that either they say, or that you demand, nothing will change. Without that, we're going to be in this pickle five years from now, and we can't afford that.

It is easy for a black male in the United States to say Black Lives Matter. In our profession, it needs to be just as easy for white male attorneys to say it and mean it as well. And, if we can get white male equity partners at the biggest law firms in the United States to say ‘Black Lives Matter,’ every day, then we may have finally reached a tipping point and the world may change for the better.


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