New law firm commitments include goal that ties partner pay to diversity - Reuters
Signage is seen outside of the law firm Baker Botts at their legal offices in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly
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(Reuters) - Diversity Lab on Wednesday unveiled a new round of commitments from law firms including a public pledge from one firm, Baker Botts, to link practice group leader or partner compensation to diversity and inclusion.
That commitment, part of Diversity Lab's new "Do Something Hard" initiative, was one of six actions tied to inclusion and equity available to firms, with three at the leadership level and three at the practice group level.
The goal Baker Botts has publicly pledged to meet requires that firms link compensation to D&I by "materially impacting" pay if the partners or leaders meet or fall short of certain diversity subgoals.
According to Diversity Lab, these are staffing most client pitches and matter teams with at least 50% diverse lawyers, sharing equal origination credit with diverse partners, and retaining diverse lawyers and non-diverse lawyers at the same rate.
Compared to the other five main commitments, the leader and partner pay goal "might have been seen for some firms as harder than others," said Caren Ulrich Stacy, founder and CEO of Diversity Lab. Making tweaks to "age-old" compensation systems can be a big change, and the commitment requires buy-in from firm leaders and partners, she said.
Other law firms have pledged to the action but have chosen to not yet make the decision public as they figure out their approach, according to Ulrich Stacy.
The other five major "Do Something Hard" commitments include offering 50 hours of "billable credit" for diversity and inclusion efforts and having partners in specific practice groups pledge to advocate for "at least one diverse associate or junior partner."
For Baker Botts, the idea of weighing partners' diversity and inclusion efforts as a compensation factor isn't new with its Diversity Lab pledge, said Christa Brown-Sanford, co-chair of the firm's diversity and inclusion committee. She said Baker Botts set out to develop a new broad strategic plan, which included diversity and inclusion efforts when John Martin took over as managing partner of the firm in 2019.
"As we have talked about this internally for a few years, it became clear that the only way to really drive behavioral change among our partnership is to really look at the compensation piece," she said.
D&I is part of each step in the compensation assessment process, from self-evaluations to those by firm leaders, Brown-Sanford said. Baker Botts is also building out a dashboard where partners in the billing attorney seat can see how their practice is utilizing diverse and female lawyers.
Measuring diversity and inclusion can be tricky, and what it means under the new initiative to "materially" impact compensation based on diversity and inclusion goals is not entirely clear.
Ulrich Stacy said there isn't a standard that will be applied to all firms that take that pledge because of differences in compensation systems among law firms. For Baker Botts and other firms that commit to the action, "we're going to work side by side with them to define what 'material' means, and to call them out," she said.
Baker Botts declined to share specific details about what a material impact will look like.
Brown-Sanford said the firm, in assessing compensation in general, looks at various factors and contributions for each person, rather than using a formula.
The "Do Something Hard" initiative is a new component this year of the existing "Inclusion Blueprint," a collaboration between Diversity Lab and nonprofit organization ChIPs to provide a roadmap for firms to track actions to boost inclusion. Under the new initiative, firms have to implement their public commitments by January 2022 and share progress with the lab.
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source: https://www.reuters.com/legal/legalindustry/new-law-firm-commitments-include-goal-that-ties-partner-pay-diversity-2021-09-30/
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