Doing Well by Doing Right: DEI For A More Profitable Law Practice

Diversity is a heated but essential issue–there’s a lot of misinformation, vitriol, vibes, and deep-rooted opinions about it. Let’s table that for now and get down to brass tacks.

In a court of law, you need facts, evidence, and first-hand testimony for the jury to draw conclusions and make informed decisions, right? Well, we’re going to break down the evidence on the subject and make the case that an investment in diversity makes good business sense. 

The Current State

While data on the long-term impacts is being gathered, 2023 data from the legal sector has emerged. The National Association for Law Placement, Inc. (NALP) published its 2023 Diversity Report in January, and the data shows small increases in some areas but not a seismic shift forward or back for diversity. 

Here are a few of the main takeaways:

• White men continue to represent the majority of equity partners.
• For the first time, women became the majority of associates (50.31%). 
• The law field saw the most significant annual increase of:
  • Associates of color (+1.8 percentage points). 
  • Women partners (+1.1 percentage points).
• Despite the increases, representation is still low: 
  • 5% of partners are women of color (with Black and Latina women reaching 1% for the first time).
  • 9.6% of equity partners were people of color.
  • 2.57% of partners identified as LGBTQ.
  • 1.1% of all lawyers were lawyers with disabilities. 

Other reports echo the same lack of diversity. DEI is currently in the middle of a tug-of-war between those for and against initiatives. With passionate voices on both sides, it can be challenging to sift through the noise and determine the best course of action going forward. Let’s review the evidence. 

Impacts of Diversity

“Diversity leads to miscommunication.”

“Diversity makes our employees feel weird.”

“Diversity causes team members anxiety.”

Each negative impact we’ve heard about diversity is based on the concern that it will ostracize some employees. Camaraderie is important, especially for company culture, but the factual benefits of diversity are undeniable and shouldn’t be thrown out to make the old guard comfortable at the expense of your bottom line.

A LinkedIn study found: 

• Companies with higher gender diversity are 25% more likely to outperform their peers financially.
• Companies with higher ethnic diversity are 36% more likely to outperform their peers financially.
• Diverse teams are more productive by over 35%.
• 87% of the time, diverse teams make better decisions.

The LinkedIn study is not an anomaly.

The Harvard Business Review also examined the impact of diversity and found that less diverse companies had a lower success rate (reduced by 26.4%- 32.2%).

In December, McKinsey & Company released its fourth report, entitled Diversity Matters Even More. The report found that companies in the top quartile for gender and ethnicity outperformed their less diverse competitors across the board. The study also revealed a ripple effect that extended the positive impacts onto the surrounding communities and environments.

The message is clear - Your team needs diversity to survive and thrive.

Nearly every study and report confirmed that increased diversity just makes good business sense.

As Televerde found, diverse companies appeal to a larger number of applicants, leading to a larger pool of top-quality candidates. It also found that diverse teams are more innovative and relate to wider audiences. They also concluded that a diverse company often appeals to investors and contributes to their investment decisions. 

Diversity Makes Good Business Sense For Lawyers

While most of the reporting focuses on gender and ethnicity, having a diverse firm or legal team means all forms of diversity, including background, age, viewpoints, interests, etc. The picture is coming into focus–diversity drives innovation, understanding, and profits, but in the legal field, it also drives justice. 

Challenging legal cases are won through insight, knowledge, passion, innovation, and care. Leveraging a diverse team enhances all of these aspects. Having someone on your team who shares experiences with the client and jury allows you to:

• Have a deeper understanding of the client’s background, struggles, and needs.
• Connect with the jury and avoid out-of-touch arguments, unintentional insults, and outright hostility.
• Identify and highlight more aspects of the case, leading to better legal arguments. 
• Garner more support through empathy and understanding.

For every long-shot case won by a diverse team, there are more examples where smug lawyers who eschewed help and hurt their client’s chances by their refusal to take the winning advantage that a diverse team provides.

Cases have been lost due to arguments that are deemed tone-deaf or insulting, often with onlookers wondering why someone didn’t stop them. 

Having a diverse room of voices goes a long way to mitigating these mistakes.

Closing Arguments

Diversity and DEI are controversial topics at the moment. They’re in the news almost every day, with people from both sides of the argument making passionate arguments for their beliefs. There’s a lot of noise, emotions, and conjecture, but step back and look at the big picture.

If you follow facts over feelings, it’s clear: fostering a diverse firm, practice, and legal team is one of the best ways to increase profits, innovation, and client satisfaction. The jury is certainly not out on the matter. Diversity is a proven winner. An investment in diversity is an investment in your finances and the future. 

If you’d like resources to help implement DEI initiatives, the American Bar Association has a great page to get you started.