$1 Billion and Counting

SternJoel Stern is the Chief Executive Officer of the National Association of Minority and Women Owned Law Firms, Inc. (NAMWOLF). Joel also served as the Global Deputy General Counsel and COO Legal at Accenture where he managed all outside counsel relationships across the globe. Throughout Joel’s accomplished career, he personally championed key diversity and inclusion initiatives including leading Accenture Legal Group’s award winning diversity and inclusion programs. He has been a Board Member of NAMWOLF since 2010 and formerly chaired the NAMWOLF In-House Advisory Council.

 

Six years ago, a small group of in-house counsel from some of America’s largest companies came together and committed to including qualified minority and women-owned law firms (MWBEs) in their legal spend. In May of this year, the “Inclusion Initiative,” as it is called, announced that its members have now spent a breathtaking $1 billion doing business with MWBE law firms.

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I caught up with Joel Stern to learn how and why these companies find it profitable to focus on supplier diversity in the legal profession through the targeting and hiring of minority and women-owned law firms.

First (and I know you get this question a lot), what qualifies you (a white man who has worked in-house for his whole career) to head up an organization devoted to supplier diversity in the legal profession?

I do get that question fairly often and enjoy having that dialogue. I started my career as an in-house attorney at Allstate Insurance Company, became general counsel for a Sears Roebuck and IBM telecommunications joint venture, and then served for 15 years at Accenture as deputy general counsel. In my role at Accenture, I had responsibility for the Americas Legal group, all talent management issues for the global legal group including hiring, succession planning and leadership development, and was the COO of the Accenture legal group. In the COO role, I had responsibility for strategy, budget, and managing outside counsel. I was also tasked with creating a legal group diversity and inclusion program which, I am happy to report, years later is still considered “best in class.”

In the early 2000s, I brought NAMWOLF into Accenture as part of our legal diversity and inclusion committee, and fell in love with its vision, its mission and its passion. At that time, NAMWOLF was a small trade association of MWBE law firms. Today NAMWOLF includes more than 155 law firms in 40 states, each of which must pass an onerous, time-consuming vetting process that is primarily controlled by in-house counsel. The goal is to ensure that the firms that are part of NAMWOLF can and do meet the needs of Fortune 500 corporations. When NAMWOLF was looking for a CEO a few years ago, I took the position knowing NAMWOLF probably more than anyone, including how amazing the law firms are. In addition, NAMWOLF has the best in-house counsel network that I have had the pleasure of working with. In short, I am in this role because of my knowledge and passion for the organization, and my long-term desire to enhance diversity and inclusion in the legal profession by taking action to change, rather than just admiring the problem that has existed for way too many years. Also, selecting me in this role highlights the importance of inclusion in effectuating positive change regardless of gender and ethnicity.

Benjamin Franklin is quoted as saying: “Well done is better than well said.” What is corporate America actually doing to promote diversity in the legal profession?

Companies that are committed to diversity and inclusion in the legal profession have very formal programs that are designed to change the legal profession and advance diversity. They are typically aligned across four pillars: “big firm,” internal focused, pipeline and supplier. In these companies, it is embedded in their core values, there is a written mission and vision, it has top down/bottom up support, and it has metrics and goals. They celebrate their successes and talk about their challenges. They reward their employees who are doing the right thing. They run their diversity and inclusion programs similar to how they run their other strategically imperative programs. Companies involved are often part of more formal programs such as the NAMWOLF Partner Program and the Inclusion Initiative, and provide a role model for other companies. In fact, NAMWOLF has published written guidelines for in-house counsel or others who want to focus on supplier diversity in the legal profession.

What is the Inclusion Initiative?

The “Inclusion Initiative” is a collaborative effort that was started in 2010 by law departments at 11 major corporations to include minority and women-owned law firms in their outside counsel panels and budgets. These companies believe that MWBE firms offer excellent, cost-effective legal services that meet the needs of corporate America while also providing a reliable pathway into the legal field for lawyers of diverse backgrounds. The Inclusion Initiative has grown to include law departments at a veritable “who’s who” of 31 American’s largest companies, with NBC Universal having joined in 2016. They include:

3M
Accenture
Aetna
Allstate
American Airlines
AT&T
Bank of America
The Coca-Cola Company
Comcast
Exelon
The FDIC
General Mills
GlaxoSmithKline
Google
JPMorgan Chase
McDonald’s Corporation
Macy’s
Merck
Microsoft
Morgan Stanley
Nationwide
NBCUniversal
Pacific Gas & Electric Company
Prudential Financial Inc.
Sempra Energy
Shell Oil Company
UPS Verizon
Walmart
Wells Fargo
Xerox

Legal work awarded to MWBE law firms by companies in the Inclusion Initiative has grown from $42 million in 2010 to over $200 million in 2015 (and also exceeded $200 million in 2013 and 2014), adding up to over $1 billion since it started.

What is the NAMWOLF Partner Program?

The NAMWOLF Partner Program is another formal program that focuses on supplier diversity in the legal profession. Under the NAMWOLF Partner Program, corporations and other entities agree to set a goal of expending a minimum of 5% of their outside counsel budget with certified minority and women-owned law firms. A list of the many companies that have made this commitment can be found here.

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Is diversity just the latest trend or are there good, solid business reasons for corporate America to focus on diversity in the legal profession? 

There are both business and moral reasons to focus on diversity in the legal profession. First, there is a clear benefit to the bottom line for companies that utilize women or minority-owned law firms. One study by The Hackett Group found that companies that focus on supplier diversity generate 133% greater return on investment than companies that do not.

Second, there are moral reasons. I became an attorney because I wanted to be a leader. Unfortunately, 30+ years later, our profession isn’t leading—and it’s doing a lousy job of even following. Studies have shown countlessly that diverse groups get better results through having better dialogue, exploring the options, and creating solutions. In order to get the best thinking, we need diversity in the teams that are coming up with the answers.

What challenges do minority and women owned law firms face when working with large corporate clients? 

Many corporations have strong relationships with firms that typically happen to be white male-dominated law firms. Getting management to have the courage to change and see what MWBE firms can do is often hard. Change is hard for everyone, especially attorneys, and moving away from “your old law firm” is not easy, even when they are not delivering great service. I can tell you that being a user of both large and minority and women-owned firms for years, the level of quality for the MWBE firms was demonstrably better than my track record with big law. That’s not to say big law is bad—just to say that minority and women-owned firms know the cards are stacked against them and they try harder to deliver outstanding services.

What is the biggest hindrance to a more diverse workplace?

I am convinced that we all have implicit biases that we are not even aware of that stop us from doing the right things. Studies have shown that these unconscious biases have an adverse impact on hiring, firing, view of quality and the like. And, the ones that suffer most from this are minorities and women. I challenge everyone to take the Harvard Implicit Bias test and learn about your biases.  From there, it would also be helpful to create an action plan to better battle your individual biases.

Imagine that all of your dreams about diversity in the legal profession have come true – what does that look like and what happened that allowed Corporate America to get there?

There would be no need for NAMWOLF and other organizations that function to preach the gospel of equality. We would be so much more self aware of our unconscious biases and treat people not necessarily how we want to be treated but how they want to be treated—the golden rule replaced by the platinum rule. As my friend Verna Myers says, “Diversity is being invited to the party and inclusion is being invited to dance.” Diversity without inclusion is not good enough. We need to work towards a profession that is both diverse and inclusive.

About the Author

BoutwellSherrie Boutwell is a founding partner of Boutwell Fay LLP and is a member of the Law Practice Today Editorial Board.

 

 

 

(Feature Image Credit: ShutterStock)

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