Francis Bacon once said – “Of all things known to mortals, wine is the most powerful and effectual for exciting and inflaming the passions of mankind, being common fuel to them all.”
Given the response to last week’s blog I’m going to have to assume that a number of readers had had at least 3 bottles of Bordeaux…
I was genuinely surprised at just how passionately people reacted to the thought that firms might implement tech that counteracts what clients are using.
If you didn’t have a chance to read it, catch up here.
Needless to say, half a dozen law firms reached out for an introduction, a number of clients said they’d categorically fire any law firms caught using such technology and a few of our e-biller friends weren’t very happy about having to up their algorithmic game.
Each a classically reflexive reaction to the way things are currently done.
The result of incentives working the wrong way.
We spoke last week about moving to a framework that emphasises value over price as one way to change the system of incentives to get to better outcomes in that context.
Another area where I believe we’d all like to see improved outcomes is diversity.
To that end let me tell you about something that came up this week.
Let’s call it diversity-as-a-service.
We were demoing our platform to a law firm.
One element of what our platform does is provide reporting on the diversity of the teams that are serving a client.
Normally when we show this reporting we get a slight groan from law firms.
I would suspect that the groan isn’t because they’re confident of looking great from this perspective.
The people on this call however lit up.
‘This is going to be great!’
‘Really?’, I asked.
‘Oh yes!’, they said, ‘We have an agreement with this client that we’ll provide teams that meet certain diversity criteria. It’s a real sore spot with the client and we know other firms can’t match it so we have a real advantage.’
That’s great I thought to myself. A firm who recognizes diversity as a strength and a client who rewards it.
Then came the big reveal.
‘The client agreed to pay us more for guaranteeing the diversity characteristics!’
Let’s hear that again.
This firm has agreed to provide a diverse team in return for higher rates.
I was curious so I called the partner back and his argument went as follows:
- We have met a client’s requirement for diverse staffing.
- We are making additional revenue from this arrangement, some of which will go to the fee earners involved.
- As more clients request diverse teams we will increasingly hire diverse talent to meet those needs and thereby become a diverse organization.
On the face of it those aren’t terrible arguments.
A law firm responded to a client’s needs and at least took a step towards a more diverse future.
Then I had a look at the firm’s publicly available D&I information.
Suffice it to say that they don’t have a staff that reflects the UK population at large.
In that context a closer look at those arguments is a bit more problematic:
- Yes, you have met this client’s needs. However the irony is that as you staff this client’s matters with a diverse team then your other clients actually receive less diverse service. The follow on is how will the careers of this team be impacted if they are guaranteed to a client? Will they not lose out on a broader base of experience or in opportunities to build their own book of business if they are so narrowly focused?
- I would argue that this is a rather dubious argument at best. Especially in partnerships where the decisions around who gets paid are largely concentrated in the hands of a rather non-diverse group.
- Prima facie this means that diversity isn’t important to your firm. It’s a business decision made in response to client demands. If it’s not a core value then exactly how focused are you going to be on it? Are you really going to address the barriers that have traditionally worked against diversity?
This analysis left me rather less satisfied than I was initially when the law firm proclaimed that it was meeting a client’s diversity goals.
What’s gone wrong here?
Once again it’s a misalignment of incentives.
In this case it’s one law firm and one client being inconsistent with the broader goal of diversity.
So how do we do better?
I’d suggest that we start by acknowledging that diversity should not be a service that we pay for.
It should be a prerequisite to working together.
This requires that all clients who purchase legal services be committed to hiring firms that promote diversity.
Not firms who try and profit from it but those who hold it as a core value.
If everyone who hires counsel demands diversity of service then the issues discussed are ameliorated.
It moves from a framework of diversity-as-a-service to diversity as a prerequisite.
Firms have to change not because of a singular profit motive but rather because the system in which they operate demands it.
We also have to be realistic that whilst we can’t solve the diversity in the law issue overnight, we can make progress over time.
This requires that the diversity of firms be carefully measured and tracked.
Both from the perspective of teams that serve clients and at an aggregate firm level.(1)
The renewed activism of the Black Lives Matter movement in the wake of George Floyd’s tragic death reminds us that there is an urgent need for change.
We have the opportunity to contribute, in a unique way, to the change that is needed to ensure a fair and equitable society.
Let’s not miss it.
Not-as-a-service,
Christopher Thurn
Founder – Alacrity Law
1. If you’d like to learn a bit more about some efforts to do this at an aggregate level check out the model diversity survey from the ABA (Link), the work that the InterLaw Diversity Forum is doing (Link) or on the in-house side the Apollo Leadership Institute (Link).
