This fall, I had the opportunity to attend the Minority Corporate Counsel Association’s annual Creating Pathways to Diversity Conference, which convenes law firms, in-house counsel and thought leaders to discuss diversity and inclusion topics and issues within the legal profession. Though I was there to humbly accept MCCA’s Employer of Choice award on behalf of Microsoft, I also had the opportunity to hear first-hand about challenges and successes legal professionals are experiencing as they look to grow and support their diverse legal talent. I was impressed by the commitment and sense of urgency displayed and, while the industry has a long way to go, I left the conference with renewed hope that, by working together, we can make meaningful progress to achieve a truly diverse legal profession.
As we focus on furthering this important work, for the 14th year in a row, today we are publishing the results of Microsoft’s Law Firm Diversity Program (LFDP) for 2022 and recognizing the progress of our law firm partners in advancing diversity and inclusion within their organizations.
The benefits of diversity enable Microsoft to accomplish its mission to empower every organization and every person on the planet to achieve more. With an increasingly diverse workforce, it is imperative that the law firms that work with our business and legal teams reflect that diversity and remain committed to creating inclusive environments where lawyers and legal professionals from all backgrounds can thrive. Diverse teams bring a range of lived experiences and unique insights, and are more creative, more innovative and drive greater customer and client engagement.
The LFDP is an incentive-based program that provides bonuses to participating firms, calculated as a percentage of their annual fees, for achieving and/or exceeding diversity representation goals. Every year, Microsoft reviews and iterates on the LFDP diversity goals to enable and ensure continued progress. Since the program was established in 2008, there have been three significant changes:
- In 2015, we shifted the focus of the program to tracking progress in leadership; namely partner diversity and diversity on law firm executive and management committees.
- In 2020, we expanded the number of firms in the program to include not only those firms in our strategic partner program but also those firms who do a substantial amount of work for us in the U.S. In this same year, we also put a greater focus on the growth of African American, Black, Hispanic and Latinx lawyers in leadership.
- In 2021, we increased partner-level growth targets for all diverse categories within the program to include diverse representation of women, racial and ethnic minorities, LGBTQ, veteran and disabled lawyers.
Our most recent changes in 2020 and 2021 reflect an urgency to advance diversity in the legal profession overall. For too long, the pace of growth in diverse representation has been too slow and not at pace with the diversity of the clients and communities the profession serves.
2022 Law Firm Diversity Program results
For the 2022 program term, there were 33 participating firms which included 12 strategic partner firms and 21 firms with whom Microsoft does a substantial amount of work within the U.S. Firms participating in the program include international firms, domestic and regional firms, boutique firms and one woman-owned firm. All firms have an opportunity to earn a 2-3% bonus based on meeting goals within the program.
Diversity on the teams that work for Microsoft
The strongest area of performance continues to be diverse representation on teams that work on Microsoft matters. We continue to see gains year over year. All firms in our strategic partner panel met the benchmark goal of 50% diverse representation on our matters or increased growth from last year. For all other firms in the program, 76% met these goals as well.
Diversity in leadership
The program continued to see improvement in diverse representation in partnership ranks though progress slowed overall across categories measured in 2022. The past two years have been challenging for the legal industry in the United States with significant attrition within the associate ranks, a competitive lateral market and an increasing number of lawyers making career changes or leaving the profession entirely. This year’s program results appear to show that our law firm partners were not immune to these market factors.
- Growth in overall diversity in the partnership ranks was flat; however, 73% of firms met or exceeded the benchmark goals of 36%. Collectively, firms report partnerships that are 40.6% diverse.
- Representation of women in the partnership grew 0.8% to 27.4%, resulting in a net percentage change of 3%.
- Representation of racial and ethnic minorities in the partnership grew 0.9% to 14.4%, resulting in a net percentage change of 6%.
- For partners in other diverse categories, including partners that identify as LGBTQ+, disabled, or hold veteran status, growth was flat with representation of these groups collectively at 6% of the partnership.
- For Microsoft’s strategic partner firms, for whom diversity on executive or management committees is tracked, representation grew 4% to 50.6%, resulting in a net percentage change of 8.8%.
Recognizing law firms achieving diversity goals
While overall program numbers show modest increases from the previous year, there are some bright spots among individual firm performance. We would like to recognize those firms that achieved at least 60% of the program metrics. The firms in this group were able to not only maintain benchmark goals for representation but also grew diversity in their partnerships (overall) through increased representation of African American, Black, Hispanic, Latinx, Asian, women and/or LGBTQ, veterans, and disabled lawyers in their partnerships. All met goals of increasing diversity on the teams that work on Microsoft matters.
“At ArentFox Schiff, diversity, equity and inclusion are part of our DNA. Microsoft’s Law Firm Diversity Program has been a catalyst for change, driving the legal industry to make diversity, equity and inclusion a priority, and we are proud to partner with Microsoft on these initiatives.”
“The LFDP meaningfully moves the DE&I needle forward both by partnering with Microsoft’s outside firms to better understand the firms’ DE&I footprint generally and for Microsoft matters specifically, and by rewarding success based on clear metrics.”
“At Fish, we believe that diversity is the fuel of innovation, and diversity of experience and background enhances the quality and ingenuity of the legal services that we provide,” said Fish & Richardson principal Betty Chen. “It is incumbent upon us as a partner law firm to accelerate diversity within our own ranks in order to drive the pace of progress within the legal industry as a whole, and we’re proud to once again partner with Microsoft in that effort.”
“Greenberg Traurig is a proud partner in Microsoft’s Law Firm Diversity Program. Diversity equity, and inclusion undergird everything we do at Greenberg Traurig and we are excited to be recognized. A more just world only happens by design, intention and commitment and our clients are best served by teams that can provide diverse experiences and points of view. We look forward to our continued collaboration with Microsoft as we work together to move the needle now and for the generations to come.”
“We are proud to share Microsoft’s steadfast commitment to advancing diversity, equity and inclusion (DEI). Microsoft’s Law Firm Diversity Program is a shining example of how in-house legal departments and outside counsel can partner together to keep DEI top of mind throughout the year and hold ourselves accountable in terms of the diversity of our teams and the impact of our overall DEI efforts.”
“Today, more than ever, our D&I efforts are focused on tailoring our approach to the interests and needs of each diverse Team Member. This of course begins with a flexible talent model, but our progress is accelerated when we have the opportunity to partner with a client like Microsoft that shares our belief that diversity and inclusion must be a core value of our legal profession.”
Our emphasis on diversity in law firm leadership is intentional. While certainly not the only path, for many new lawyers, a law firm is likely the first step in their careers. According to the American Bar Association’s 2022 Profile of the Legal Profession, in 2021 roughly half of law school graduates were employed with law firms at least 10 months after graduation. And industry data indicates that the pipeline to firms and to the partnership is becoming more diverse.
The 2021 NALP Report on Diversity in U.S. Law Firms reports that the representation of associates of color has continued to increase since 2010 (from 19.53% to 27.60%). The percentage of women associates has also grown to 48.21%, which is the highest the percentage has been in nearly three decades. The NALP survey also highlighted historic gains for women (55.06%) and people of color (41.34%) in summer associate ranks in 2021. LBGTQ representation also continued to grow in the 2021 summer associate class (8.41%). Even with these gains, the NALP report highlighted that “clos[ing] the outcome gaps in the pipeline from summer associate to law firm partner remains the biggest challenge facing the profession.” In fact, closing those gaps has implications not just for law firm partnerships, but for the profession at large.
The path to partnership is a system contingent on mentorship, training, professional development and sponsorship. For lawyers on this path, a firm often makes investments to advance not only their skills but also their access to resources, exposure to clients and participation on firm leadership committees – creating a space at the table to share the pool of influence, available work and, potentially, credit and compensation. Moreover, the path to partnership creates a launching pad to opportunities in the judiciary, government and politics, business, and non-profit and other service agencies. A lack of diverse representation either in the partnership or on the path to partnership undercuts our collective interest in a more diverse profession overall and the ability of the profession to innovate and adapt to an increasingly complex global landscape.
We are maintaining Law Firm Diversity Program metrics from last year. We recognize that additional time is needed to track performance against our growth metrics as well as follow that pipeline to partnership. However, we remain committed to measuring results, acknowledging progress and finding ways to partner with our law firms through our other aligned commitments on pro bono and volunteer service.
One change we will make is asking all our participating firms to provide us with a copy of their MCCA Diversity Scorecard. The scorecard results allow both clients and firms to look beyond numbers and understand what additional efforts may be needed to advance more diverse and inclusive organizations. You can learn more about the MCCA Diversity Scorecard at www.mcca.com.
We thank all our firms for their commitment to this program and efforts outside of it with agencies and initiatives dedicated to diversity and inclusion such as the American Bar Association, the Minority Corporate Counsel Association, the Leadership Council on Legal Diversity, Diversity Lab and many others – organizations we are also deeply committed to at Microsoft.
Although we are excited about the ongoing impact of this year’s Law Firm Diversity Program, our work is not done. Opportunities remain to make greater progress across all diverse communities. There are no true wins, only progress to acknowledge and a call for greater investment and focus on diversity and inclusion in the legal profession.