Facebook lays down the law on legal diversity

Groundbreaking moves in the US by Facebook, HP and MetLife to stimulate gender and ethnic diversity in the legal profession have been welcomed by some leading members of the legal fraternity in New Zealand.

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For its part, Facebook now only engages outside legal teams that are made up of at least 33 per cent of women and ethnic minorities. The social media giant also stipulates that law firms acting on its behalf must show that they “actively identify and create clear and measurable leadership opportunities for women and minorities”.

The new policy follows hard on the heels of moves by HP to start withholding up to 10 per cent of fees from law firms that do not have at least one “diverse relationship partner” or at least one woman and one “racially or ethnically diverse lawyer”, each working on at least 10 per cent of the billable hours for the company’s matters.

Meanwhile, MetLife has asked some 50 law firms that it retains to ensure that “junior diverse talent” are coached and nurtured by senior lawyers. Firms have been given six months to meet this requirement or lose MetLife’s business.

Bankside Chambers barrister Janna McGuigan, who is the President of the Auckland Women Lawyers’ Association, believes the New Zealand legal profession should embrace the initiatives being undertaken by Facebook and HP.

“For our part, AWLA strongly supports diversity policies which are targeted and measurable – a dual focus on women being responsible for premium work and on creating leadership opportunities for women lawyers is vital,” she told LawNews.

“It’s also significant that the companies are willing to hold law firms to account for progress in these areas.”

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The Dean of Law at Canterbury University, Professor Ursula Cheer, describes the American proposals as “really interesting”.

“The policy is very detailed and a bit like specifying quotas for women on boards, and in that respect it is like positive discrimination. I am in favour of such moves as leaving this for gradual change is very slow. There’s nothing like using market power to make changes.

“I think the legal profession as a whole might not like the idea but many, if not most, firms now have at least 50 per cent women lawyers working for them, if not as partners, then certainly right up to that level.”

Just what the majority of the legal profession makes of it all remains to be seen, but early reaction from major law firms contacted by LawNews is largely positive.

Nick Wells, Chief Executive Partner of Chapman Tripp, endorses the moves, saying he believes they are steps in the right direction.

“While they may not be the answer long-term, the fact that diversity is now at the forefront of both law firms’ and large corporates’ strategic focus is encouraging. Diversity has been a focus at Chapman Tripp for a few years already and it remains a key objective of the firm’s 2016-2020 strategic plan.

“At the heart of our culture is Manaakitanga, the concept of nurturing and showing respect for each other. Diversity is about that same respect, generosity and care. We continuously work to be inclusive and extend that to all aspects of difference.”

Mr Wells says Chapman Tripp clients echo these sentiments with in-house teams already including diversity as an important consideration in selecting external providers.

Gary McDiarmid, CEO of Russell McVeagh, says Facebook and HP should be commended for their position on diversity issues.

“There is a keen awareness throughout the New Zealand legal profession that having a commitment to diversity is increasingly important, as well as an acknowledgement that diversity is much broader than gender and ethnic diversity.

“With regard to specific quotas, the reality is that this would pose a challenge in the current New Zealand market. Across New Zealand’s legal profession, there is ample evidence to reveal that gender and minority diversity are areas where there is still much work to be done by our own firm and in the wider profession.”

Mr McDiarmid says women now make up almost 30 per cent of the firm’s partners, compared to fifteen years ago when this was “an appalling three per cent”.

Mike Schubert, CEO of MinterEllisonRuddWatts, told LawNews that his initial reaction to the US development was “good on HP and Facebook”.

“Although unorthodox, it certainly nails their colours to the mast and demands change in an industry that has been slow to respond to the diversity challenge. For the most part, the New Zealand legal industry would find the implementation of policies such as these challenging as the level of diversity, particularly at senior levels, is low.”

Martin Wiseman, Country Managing Partner for DLA Piper New Zealand, is another who welcomes the news.

“Clients want law firms with empathy, that look and feel like their own people, and their customers. Diversity of people brings diversity of thought and research shows that diversity improves business performance.”

Janna McGuigan also believes that diversity makes good business sense.

“The business case for diversity, including gender diversity, has been well set out in a number of international studies, and it’s no secret that companies around the world are seeking out diversity and equality for their boards because diversity drives better performance.

“So this is absolutely not a ploy – not only is gender diversity the right initiative to promote, it’s a successful one too.”

Mike Schubert also needs no convincing of this.

“Current literature tells us that an organisation that reflects its clients and the markets it operates in has great benefits for business. It also renders these organisations more attractive to employees, particularly millenials, who have generally grown up in a more diverse society with a greater understanding of equality.

“So whatever the motivation, it is smart business and can only be seen as positive.”

To what extent the diversity policies of Facebook and HP will prompt some New Zealand corporates to follow suit is a moot point but, according to those spoken to by LawNews, change could be on the way.

Martin Wiseman says that he is aware of some corporates in this country requesting diversity criteria breakdowns within requests for proposals (RFPs).

“We think this is likely to be the way of the future and are comfortable with it being so.”

Gary McDiarmid says that he is not aware of plans to introduce formal quotas, but points out that many New Zealand corporates are actively reviewing the diversity challenges within their own organisations, as well as considering diversity as an important factor in who they are choosing to do business with.

“From our own experience, we have endeavoured to be a vocal promoter of gender equality, diversity and inclusion within our own firm and in the wider market, and have received feedback from our clients that they are increasingly seeing our diversity initiatives as one of the reasons why they want to work with us.”

This trend has also been observed by Janna McGuigan, who says she is informally aware that some New Zealand corporates are requiring panel firms to report on – and quantify – diversity initiatives and policies within their firms as a condition of receiving work.

Ms McGuigan points out that, since 2009, the New Zealand Bar Association has developed an equitable briefing policy which the AWLA enthusiastically supports.

“Recognising that lawyers play a vital role in a client’s choice of barrister, the policy encourages lawyers to make all reasonable endeavours to identify female counsel in the relevant practice area and genuinely consider engaging such counsel. It also encourages users to regularly monitor and report on the nature and rate of engagement of female counsel.”

Ms McGuigan says the policy has the support of Crown Law and, in 2015, the NZBA instituted its Gender Equity Committee to monitor and report on the effectiveness of the policy. Asked whether there was still much prejudice or unconscious bias to more diversity within the legal profession, she said:

“Rigor is important in this field – too often ‘unconscious bias’ is used to excuse behaviour or trends which are simply prejudice, and which should be confronted as such.

“We are often told that the client did not want to brief a woman. However, in AWLA’s opinion, the NZBA equitable briefing policy is brilliant because it recognises that lawyers play a vital role in selecting the panel of potential barristers to be put before a client. And it is at that stage that a lawyer can exercise his or her influence to ensure that the panel includes the best, and most diverse, barristers for the brief.”

Ursula Cheer is in no doubt that conscious and unconscious biases are preventing many women from reaching the higher levels of the profession.

“Very recently, the number of women applying for practising certificates equalled that of men and soon will be greater, as two thirds of law graduates are now women. But the problem is that these numbers of women are not reflected in partnerships at the top of firms.

“There is a lot of agonising at present as to why this is so, but it seems clear there are a number of reasons.”

Professor Cheer says these include conscious and unconscious bias, failure to embed part-time and flexi-time options when women (and men) need to take time off to raise children and then work while bringing up children, the harsh demands on time and health of working in the profession, the lack of work/life balance, disenchantment with the realities of practice and lesser confidence levels experienced by women.

“As to ethnicity, ethnic diversity in the profession is very low and work on improving that is very far behind improving the lot of women.”

But what about those who argue that affirmative action policies such as those being promulgated by Facebook discriminate against lawyers who may be more qualified and experienced?

Nick Wells says Chapman Tripp draws on the strengths of every lawyer, whether that is experience, industry knowledge or fresh insights.

“Diversity does not exclude those lawyers who have extensive experience and important knowledge. Instead, encouraging diversity enables lawyers to utilise that experience and combine it with insights from others. It is not an exclusive concept – it’s inclusive – and diversity of thought helps, not hinders, lawyers in helping clients.”

Mike Schubert says it could be argued that in the very short-term affirmative action policies may be discriminatory, but “as it would bring about a sustained change in the longer term, it doesn’t hold water”.

“People should achieve on their merits, but that also means giving all people in the pipeline the opportunity and support they need to succeed.”

Gary McDiarmid told LawNews that a major initiative to address gender and ethnic imbalance in the legal world is already underway in this country. Global Women “CEO Champions for Change” was launched in 2015 and comprises a group of New Zealand CEOs and Chairs from across the public and private sectors. They are committed to raising the value of diversity and inclusion within their organisations and implementing strategies to actively promote the concept among peers.

Mr McDiarmid, who is a member of the group, says it is helping organisations to think differently about how corporates in New Zealand are serving talent and what type of opportunities, networking and organisational culture needs to be developed within them. He points to some large top-tier overseas firms which have made “fabulous progress” in this regard.

One such trailblazer is Singapore law firm WongPartnership LLP, which has cemented a reputation as an excellent workplace for women. Deputy Chairman and mother of three, Rachel Eng, played a significant role in growing the business into one of Singapore’s largest law firms with almost 300 lawyers and a branch in China. In a 23-year legal career, she has not only established herself as an outstanding corporate lawyer but has also broken the glass ceiling in a male-dominated industry, all the while raising a family without domestic help until very recently.

Her former boss, Dilhan Pillay Sandrasegera, is amazed at what she managed to do.

“I don’t know how she did it, to be honest,” he says. “It’s a Herculean task to raise kids while building a practice, dealing with clients and travelling for work – it’s a very tall order.”

What makes her story even more remarkable is that she grew up in very modest circumstances, sharing a three-room apartment with her parents and two younger siblings. Money was tight and her seamstress mother sewed garments at home to supplement the family’s income. So given her background it’s perhaps not surprising that she has gone out of her way to redress the imbalance of women in the higher echelons of the profession.

WongPartnership LLP now has more female than male partners with women making up 41 per cent of the firm’s equity partners and 43 per cent of the firm’s executive committee. Staff are also supported by family-friendly policies that she has championed over the years, including flexi-work options and a mothers’ room in the office, where women returning from maternity leave can express and store their breast milk.

Gary McDiarmid, who describes Ms Eng as a very nice person with a great family life, says she told him the secret of her firm’s success in gender diversity is not just related to the relatively inexpensive childcare support in Singapore, as people may assume, “but more about ensuring a culture of success that supports a diverse range of talent, with role modelling being key”.

Compared to countries like Singapore, New Zealand law firms are, perhaps, still playing catchup but significant strides are being taken by many of the big players.

Some, like Martin Wiseman of DLA Piper, recognise that gender and ethnic diversity are not only long overdue and the right thing to do, but is in the best interests of the legal profession and the people it serves.

“All businesses are faced with the challenges of a workforce that is made up of a number of different and diverse generations from baby boomers, to Gen X, to millenials,” he says. Providing a workplace where these different generations are able to collaborate effectively is part of business survival. Firms will need to respond to survive and prosper but law firms shouldn’t be simply introducing diversity initiatives to win work.

“In a workplace where people feel comfortable being themselves they are more authentic, more genuine and perform better. They offer clients a better service. A diverse workplace is a better-performing one.”

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