A global market for diversity in law: the US reality, or just rhetoric?

The failure of US law firms to become truly multicultural and international in their scope
is an opportunity for other legal markets says Charna E. Sherman, Squire, Sanders &
Dempsey, LLP.

En base a un estudio
realizado por Charna
E. Sherman, del
despacho Squire,
Sanders & Dempsey,
L.L.P, en un mercado
cada vez más
globalizado, las
empresas
estadounidenses son
reiteradamente más
exigentes y reclaman
los beneficios de los
equipos de trabajo con
mujeres y
multiétnicos. Por
consiguiente, no es de
extrañar que estos
bufetes consideraran
en sus estrategias de
crecimiento estas
demandas, pero en
momentos de
reducción de socios de
capital, estos grupos
minoritarios han sido
los primeros en ser
excluidos. El fracaso
en EEUU permite a
otros paí­ses lograr
una ventaja
competitiva si logran
este equilibrio interno.

As markets become ever-more
global, U.S. businesses have
become ever-more vocal in
extolling the benefits of
multicultural, multiethnic workforces. Thus, it
is no surprise that the American lawyers
representing them have adopted growthoriented
business models which at least
purport to endorse and embrace precisely the
same imperatives and economic benefits of
diversity.

Decades ago, the US legal profession
sought initially to advance women and
minorities in the profession with a 'bubble
up' strategy that assumed imbalances in the
profession could be solved over time: if US
law schools were just to open their doors to a
more diverse student body, then – the
assumption followed – those new, more
diverse graduates would in turn rise through
the profession and ultimately proportionately
populate all of its ranks, including the highest
levels.

And in fact, significant progress was made
in increasing women and minorities in law
schools. Yet, research since demonstrates that
the assumed corollary of a rise of women and
minorities up through the profession did not
occur, and falls well short of any
approximately 'proportionate'
representation.

Minority representation in the legal
profession in the US has in fact fallen notably
behind other professions, eg, 9.7% among
lawyers and 24.6% among doctors.
Particularly alarming is a marked drop in
recent years in the percentage of incoming
minority students in US law schools. In turn,
those who fail to pass the bar exams are
disproportionately persons of colour and, of
those minorities who do earn JD's, only 53.3%
succeed in securing firm jobs.

Concerns with the slow pace of
advancement are aggravated by other trends.
For example, the US legal services market is
now marked by a huge boom in lateral partner
hiring – with significant financial incentives
associated with such lateral recruitment. Yet,
diversity is conspicuously absent from this new,
rich demographic. In 2005 for example, more
than 75% of lateral partner hires were white
men. And from 2004 to 2006, the percentage of
minority lateral hires declined from 5.5% to
3.2%, with less than 1% of lateral hires
accounting for women of colour.

Similarly, the impact of a fast-paced trend
toward 'de-equitisation' of equity partners –
to boost 'profits-per-partner' – is even greater
on already underrepresented women and
minority equity partners. Harvard Professor
David Wilkins speculates that, for a host of
reasons, it will be women and minority
partners who are most likely to face deequitisation.
Indeed, the high 'price' of diversity can
virtually be calculated by comparing The
American Lawyers prestigious 'A-list' of
American firms – which uses minority attorney
percentages as one of multiple 'objective'
measures – with its list of those U.S. firms
which generate the most 'profits-per-partner.'
Only one firm in the U.S. makes the top ten in
both. In fact, there appears to be almost an
inverse relationship between firms that are
'diverse' versus those that are profitable.

The future of diversity

The lack of progress on diversity – and more,
the apparent profits gained in return for
diversity unresponsiveness – at least call into
serious question the virtually undisputed
promise of globalisation: whether recruiting,
retaining and promoting diversity is necessary
to competing successfully in ever-more global
markets, including the law. So far, US
statistics suggest that perhaps diversity is too
expensive because 'it pays' profits-perpartner
to stay white and male.

But, the international legal marketplace can
justifiably question whether US lawyers are
just seeking short-term profits at the risk of
long-term losses. Indeed, if diversity really is
an economic imperative with respect to
competition in global markets, then the US
legal profession has taken formidable risks in
not sufficiently investing in what it will take
to compete. And more, other markets in the
world – far more diverse, arguably by
definition as 'international' are positioned to
parlay such reticence into a commercial
opportunity: to satisfy the real demand for
diversity, and in turn, secure the
representation of the world's ever-more
diverse clients of the future . . . perhaps even
at the expense of shortsighted US counsel
who refuse to change their colours.

In addition to being a litigation partner at
Squire Sanders & Dempsey, LLP. in Cleveland,
Ohio, Charna E. Sherman has held many
leadership positions within the American Bar
Association (ABA) and other organisations,
especially concerning the advancement of
women in the law (e-mail cesherman@ssd.
com). She is grateful to the Harvard Law School
for their assistance with her research.
A global market for diversity in law: the US reality, or just rhetoric?

Garcia-Sicilia

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