New Law Firm Commitments Include Goal That Ties Partner Salary to Diversity

Signage is visible outside the Baker Botts law firm in their legal offices in Washington, DC, United States, on May 10, 2021. REUTERS / Andrew Kelly

  • 50 law firms have signed up to the Diversity Lab program
  • Baker Botts among companies to publicly commit to certain actions

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(Reuters) – Diversity Lab on Wednesday unveiled a new set of law firm engagements, including a public engagement by a firm, Baker Botts, to tie the compensation of the practice group leader or partner to diversity and inclusion.

This pledge, part of Diversity Lab’s new “Do Something Hard” initiative, was one of six inclusion and equity actions available to businesses, with three at the executive level and three. at the practice group level.

The goal Baker Botts has publicly committed to achieve requires companies to associate compensation with D&I by “having a material impact” on wages if partners or leaders meet or fail certain diversity sub-goals. .

According to Diversity Lab, most client presentation and business teams are made up of at least 50% diverse lawyers, share equal origination credit with diverse partners, and retain diverse and non-diverse lawyers at the same. rhythm.

Compared to the other five core commitments, the goal of executive and partner compensation “might be seen by some companies as more difficult than others,” said Caren Ulrich Stacy, founder and CEO of Diversity Lab. Making adjustments to “old” compensation systems can be a big change, and commitment requires buy-in from company leaders and partners, she said.

Other law firms have pledged to action but have chosen not to make the decision public yet as they determine their approach, according to Ulrich Stacy.

The other top five “Do Something Hard” commitments include offering 50 hours of “billable credit” for diversity and inclusion efforts and having partners in specific practice groups commit to advocating for “at least a diverse associate or junior partner ”.

For Baker Botts, the idea of ​​weighing partner diversity and inclusion efforts as a factor in compensation is not new with his Diversity Lab engagement, said Christa Brown-Sanford, co-chair of the Diversity and Dice Committee. inclusion of the cabinet. She said Baker Botts set out to develop a new corporate strategic plan, which included diversity and inclusion efforts when John Martin took over as managing partner of the firm in 2019.

“As we talked about this internally for a few years, it became clear that the only way to really drive behavior change within our partnership is to really look at the compensation part,” she said.

D&I is part of every step of the compensation review process, from self-assessments to those of company executives, Brown-Sanford said. Baker Botts is also creating a dashboard where partners at Billing Lawyer HQ can see how their practice uses diverse and female lawyers.

Measuring diversity and inclusion can be tricky, and what it means under the new initiative to have a “material” impact on compensation based on diversity and inclusion goals is not entirely clear. made clear.

Ulrich Stacy said there is no standard that will be applied to all firms that make this commitment due to differences in compensation systems between law firms. For Baker Botts and other companies taking action, “we are going to work side by side with them to define what ‘material’ means and engage them,” she said.

Baker Botts declined to share specific details on what a material impact will look like.

Brown-Sanford said the firm, when evaluating 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 the non-profit organization ChIPs to provide a roadmap for companies to track actions to boost inclusion. As part of the new initiative, companies are to implement their public commitments by January 2022 and share progress with the lab.

Read more:

Law firm diversity leaders are growing in number and influence

Law firms set more ambitious diversity goals and set a deadline

Law firms pledge $ 5 million to diversity initiative

Legal Industry Executives Highlight Barriers to Diversity in Law

Sara merken

Sara Merken reports on data privacy and security, as well as legal affairs, including legal innovation and key players in the legal services industry. Contact her at [email protected]