The Diversity Business Imperative

<i>Groups like Legal Leaders for Diversity and Inclusiveness are pressuring law firms to be more diverse, making the business case clearer than ever. Should firms that lag be encouraged to catch up, or be left behind?</i> <br/> <br/>Twenty years ago, Ontario lawyer Joy Casey believed her gender was going to limit her prospects for advancement. That realization led her to sue her former employer, Blake, Cassels & Graydon LLP, in 1998 for $1.1 million. In short, she perceived a diversity issue and she took action. <br/> <br/>It was the first gender discrimination lawsuit brought against one of Canada's big firms and, while the case was settled in 2003 with the terms of the settlement confidential, Casey says the case was based on alleged denial of partnership and an alleged misrepresentation of partnership prospects. <br/> <br/>Two decades on, Blakes' managing partner Robert Granatstein says the firm has embraced cultural and gender diversity in a multiplicity of ways, a shift in thinking that helped Blakes open in China and the Middle East before other Canadian firms. Blakes even has a manager of diversity strategies, part of whose job is to find creative and positive ways to do things from a diversity perspective. <br/>
The Diversity Business Imperative
Twenty years ago, Ontario lawyer Joy Casey believed her gender was going to limit her prospects for advancement. That realization led her to sue her former employer, Blake, Cassels & Graydon LLP, in 1998 for $1.1 million. In short, she perceived a diversity issue and she took action.

It was the first gender discrimination lawsuit brought against one of Canada's big firms and, while the case was settled in 2003 with the terms of the settlement confidential, Casey says the case was based on alleged denial of partnership and an alleged misrepresentation of partnership prospects.

Two decades on, Blakes' managing partner Robert Granatstein says the firm has embraced cultural and gender diversity in a multiplicity of ways, a shift in thinking that helped Blakes open in China and the Middle East before other Canadian firms. Blakes even has a manager of diversity strategies, part of whose job is to find creative and positive ways to do things from a diversity perspective.

“We think it reflects our philosophical view,” Granatstein says. “We do the diversity things because they're the right thing to do and they're fair and just. Unless you continue to understand those diversities, you're behind the eight ball. From a business point of view, it's a necessary component.”

The importance of making a business case for diversity was particularly striking for Casey. Coming out of the Blakes situation, she realized that a push was needed to move firms toward being more inclusive and diverse, an eye opener that led her to spearhead Call to Action Canada, which promotes the use of law firms that demonstrate diversity.

Neither is Casey's initiative the only kid on the block. Legal Leaders for Diversity and Inclusiveness, an initiative led by in-house counsel in Canada, pursues the same goal but by different means. Where these two initiatives diverge demonstrates a fundamental debate about how diversity can be encouraged in a profession that has made progress, but still has a long way to go.

One thing is clear, though: it is going to be in-house counsel with money to spend who will be the driving force behind increased diversity in law firms. And the consensus appears to be that both law firms and in-house departments that fail to reflect the cultural diversity of their clients are going to be left behind. In some cases, the marketplace will drive this change, while in others, companies or firms are showing the way in the hopes others will follow.

> Perhaps the most prominent legal diversity initiative has been the Legal Leaders for Diversity and Inclusiveness. It was launched May 11, 2011, in Toronto, when 40 general counsel signed a pledge to promote diversity within their own departments and consider diversity in their hiring and purchasing practices. The signatories' move also encourages Canadian law firms to follow their clients' example.

Deloitte & Touche LLP General Counsel Ken Fredeen says the idea for Legal Leaders came from a small group of in-house counsel who wanted to make a difference and to be held accountable for their ideas. “We're about making a more inclusive business profession,” he says. “We believe the decision making will be better and the decisions will be better. You will get the best talent rising to the top.”

Other initial signatories included David Allgood of Royal Bank of Canada, Av Maharaj of Kellogg Co., Dorothy Quann of Xerox Canada Ltd., Simon Fish of BMO Financial Group, Kevin Derbyshire of DuPont Canada, and Melissa Kennedy of Ontario Teachers' Pension Plan.

The pledge reads, “We commit to promoting diversity in the workplace. We value the range of perspectives, ideas and experiences that diversity provides, whether grounded in gender, race, sexual orientation, disability, cultural background, religion or age.”

The signatories also pledge to reach out to their peers to encourage them to build a diversity plan, to offer diversity coaching as part of their corporation's leadership training, and to put diversity progress on the quarterly agenda.

Fredeen says more than 60 general counsel have now signed the pledge, which extends to using law firms and suppliers that are either minority-owned or reflect a commitment to diversity. And because in-house lawyers are also some of the biggest clients of legal services, their influence is likely to have a large impact on Canada's legal industry as a whole, organizers say.

“We do have spending power with law firms,” Fredeen says, noting that in a country as diverse as Canada, firms should be matching themselves to their clients. “When we say something, they listen. I think we're starting to drive behavioural changes in law firms.”

And that extends beyond the country's borders, he says. “We're always looking externally. Our growth will come from outside the country, so we've got to be culturally sensitive.”

So we have two groups pushing the same goal, but by different means: Legal Leaders for Diversity and Inclusiveness wants to draw in-house counsel into the fold to work cooperatively to increase inclusivity; Call to Action Canada seeks to encourage companies to deal with law firms that are inclusive, to the economic detriment of those who won't embrace diversity. While the general agreement is that corporate counsel are driving change, how that change is accomplished and advocated for has become the subject of a friendly tension between these two groups.

Some believe a cooperative approach will make the case, while others believe a bit of carrot-and-stick encouragement aimed at the bottom line will bring reluctant law firms into the fold. Still others say it will be the so-called millennial generation that just won't stand for discrimination and push the case forward.

“Legal Leaders for Diversity and Inclusiveness and Call to Action are important and positive initiatives,” says Osgoode Hall Law School's Dean Lorne Sossin. “But in-house counsel need to put resources where their values are — for example, by hiring articling students, or job-sharing to create new articling positions, which can allow a career pathway for a more diverse pool of candidates than tends to be the case when they recruit only from those who have already been hired by firms.”

Granatstein says the Legal Leaders' message was included in a recent retreat at Blakes but acknowledged that, with approaches such as Call to Action, “there's going to be opposing perspectives.” Indeed, there are those who don't like the seemingly punitive aspect of Call to Action Canada, which posits that firms should demonstrate their commitment to diversity in order to receive business.

> Casey says she was inspired by the US-based Call to Action, which was set in motion in 2004 by senior legal officers at some of the largest and most influential companies operating there. More than 100 US senior corporate counsel have become signatories to the Call to Action, committing to foster diversity in the legal profession both within their organizations and, especially, in the outside law firms that supply legal services.

Call to Action's mission is to encourage Canadian in-house counsel to take a leadership role in advancing diversity and inclusiveness in the profession by insisting that the firms they hire demonstrate real progress in the full participation and advancement of women and minority lawyers within their firms. Conversely, Call to Action urges in-house counsel to limit or terminate relationships with law firms that demonstrate a lack of interest in being diverse and inclusive.

Canadian corporate counsel are asked to sign the Call to Action Canada mission statement, pledging their commitment, personally and on behalf of their organizations, to advocate for diversity. “We further intend to end or limit our relationships with firms whose performance consistently evidences a lack of meaningful interest in being diverse,” the pledge says.

Call to Action's work, though, does not stop at a pledge. It is developing a website ( for women- and minority-owned or -controlled law firms to ensure that companies and law firms that want to direct work to such law firms will have a resource to find them.

Casey is firm in her belief that the legal profession is behind the times, and the situation will not be remedied by being patient and waiting for it to sort itself out. She fully expects there will be resistance from firms who've made a lot of money from the cultural status quo. “They're a lot harder to convince that something's broken in the system,” she says.

“You show that you're serious about diversity, that you're trying to make progress, you get more business,” Casey says bluntly. “You show you're not trying to make progress, you lose business. Pure and simple.”

> Each camp has its supporters and its detractors and some, such as Fredeen, see the benefit of both approaches. One thing, though, remains static: “More and more general counsel groups are made up of more diversity, and they want to work with outside firms that reflect that diversity,” says Ottawa-based Norton Rose Canada LLP partner Sally Gomery.

Gomery calls the advent of Legal Leaders “a watershed” through which clients will provide the business case to firms that aren't coming to the realization on their own that corporate diversity can help drive their bottom line.

Daniel Desjardins, General Counsel for Montréal-based Bombardier Inc., with manufacturing plants in 25 countries, also leans toward the Legal Leaders approach. Desjardins isn't too keen on Call to Action's carrot-or-stick approach to force firms to accept diversity. He thinks companies are going to be more successful in bringing supply-chain partners alongside by working with them rather than against them. It's an approach Bombardier nurtures with a supply code of ethics it asks its suppliers to support. “By making them better, we make ourselves better. If I look at the law firms we use, they are open to this,” Desjardins says. “At the end of the day, the carrot always tastes better.”

Whatever the approach, Desjardins says it makes total sense for his company to support diversity programs. Heading a department of 175 lawyers, he says having a culturally attuned team leads to richer decision making. Further, he says, diverse practices seem to be better run than those that aren't.

Moreover, in an increasingly global marketplace, not having a culturally diverse legal team may be a big business mistake. “You can't look at the world with North American eyes,” he says. “Diversity adds different points of view, adds networks in local markets. Diversity is truly an asset. If you don't support it, you hurt yourself and your organization will suffer.”

It's a philosophy that forestry giant Weyerhaeuser also takes to heart. With operations in 13 countries, Weyerhaeuser hires local people around the world so that relevant languages and cultures are understood. And, explains Anne Giardini, a Vancouver lawyer and president of Weyerhaeuser Company Ltd., the Canadian arm of the US-based forestry giant, the central office should be reflective of the local communities in which it operates.

It's a situation, however, that does require patience. “Doing the right thing doesn't bring benefits right away. It's a long timeline. The rewards are slow but more long-lasting.” That being said, a little push never hurts, and Giardini is supportive of Casey's approach, saying “it shows commitment and leadership and a certain kind of courage … in making a commitment to what remains an untested concept.”

Giardini says that corporate legal departments may have an easier time reflecting diversity, given that the range of experiences offered by an in-house position attracts lawyers from a diversity of backgrounds. This mix in turn allows for more robust decision making. She says she takes it for granted now that in-house teams will demonstrate diversity. “I don't take it for granted when I see outside law firms.

“I always think of those Picasso paintings that look at things from all sides,” she says. “There's a vibrancy to having a wider-ranging, braver even, look at things.”

For firms, merely mouthing platitudes about being culturally diverse without corresponding action will result in the loss of both clients and talented associates. This, in turn, will result in the loss of investment in staff and income opportunities. And firms will be caught, says Desjardins, as corporate social responsibility audits reveal a disconnect with annual reports.

It's a double-edged sword, though, adds Giardini, who says that such audits will measure but certainly not drive change. “Never underestimate the strength of a good, firm empty platitude,” she says. “A well-written empty platitude will hold water for a long time. It's up to the rest of us to move behind them and continue forward.”

That moving forward, she says, includes everyone in an organization.

> Or maybe the lack of diversity within the Canadian legal sphere will be addressed by the so-called millennial generation that is now moving into Canada's law firms. This generation's “intolerance for intolerance,” says Gomery, “is moving us along.”

It's a situation that argues against the tried-and-true moneymakers in favour of looking to the future for possibilities. Those millennial, potential associates will be looking at prospective employers that embrace diversity as part of their research, Gomery says. “You attract better associates. You get more clients that appreciate diversity in their outside legal provider.”

Gomery says firms need to recognize that they are going to lose people they have invested in if they aren't ensuring their firms are diverse. Even from a client-service point of view, the loss of a voice is the loss of potential for innovation. “Clients realize they get better value proposals from outside legal teams that are more diverse. More diverse legal teams are more creative and deliver a better bang for the buck.”

Sossin agrees. “There is a strong business case for creating a diverse and inclusive firm,” he says. “I think most firms embrace this idea. It is changing how they approach recruitment and retention. With this value in mind, that is the challenge for many. For example, I think there are few firms that would openly allow discriminatory recruitment practices, but amorphous categories like ‘fit' can have the same systemic effect.”

Indeed, according to numbers found in Racialization and Gender of Lawyers in Ontario, a report completed in April 2010 by York University's Michael Ornstein for The Law Society of Upper Canada (see “Changing demographics in the legal profession,” page 55), the profession appears to be undergoing a shift. Increasingly, Ornstein found that, as younger more diverse lawyers arrive, the cultural makeup of the profession becomes more reflective of communities served. And he's hopeful that the shift will continue, writing that demographic changes and the retirement of predominantly white lawyers will continue to challenge and shift the cultural makeup of the profession.

But while that shift may be occurring across Canada, there isn't much in the way of measurement taking place. Those kinds of metrics, Gomery says, are what companies are now seeking — by including, for example, questions about diversity demographics and commitments in requests for proposals. “The majority of firms cannot provide a meaningful response,” she says.

“Clearly, the momentum is heading toward more concrete expectations, and with concrete expectations comes the need for more data,” Sossin says, adding that Casey has spoken to Osgoode faculty and that Legal Leaders is working with the school's career-development office on a mentorship program.

For firms wondering how they can go about making changes for themselves, the Canadian Bar Association (CBA) will be launching tools through its website for measuring diversity in about six months, says diversity committee member Level Chan of Halifax's Stewart McKelvey.

Chan says the initiative involved canvassing firms and CBA members and it determined that clients were ahead of firms in recognizing the diversity of their customers. But, he adds, it hasn't been Canadians behind that push. Rather, he says, it has been American companies, with the ultimate drivers being corporate counsel.

But that is also starting to change. Chan points out that with the increasingly globalized nature of Canada's large companies, the pressure on law firms to be diverse is coming from Canadian in-house counsel and companies as well. "Certainly, the leading legal professional is a leader in the world. Part of it flows from businesses such as Bombardier and BMO. If they have expanded their scope, then business expands. That leads to expansion in diversity elsewhere…Our clients are ahead of us. Our clients are more diverse, especially given globalization, and they recognize the diversity of their clients.”

> Canada's law schools, Gomery says, are also part of the problem. It's not the education, though; it's the tuition. “I think there are significant issues of access to law schools in Canada. There's been a huge hike in tuition costs,” Gomery says, adding that firms may be unable to find non-traditional candidates for hire if access to law schools is blocked by tuitions that could be $20,000 a year. She says that, if law schools are shutting down the pipeline to diverse legal talent through prohibitive fees, “it's a problem.”

Chan identifies spin-off problems with tuition costs, saying people from under-represented groups may move to big firms to pay student loans, leaving smaller practice areas lacking diversity. He acknowledges, however, that those diversity shifts will also help drive diversity on the bench and could help produce better case law.

Ornstein, too, has some opinions about law schools. “The census cannot tell us about class barriers in recruitment into the profession, manifest primarily in differential access to law schools,” Ornstein reported. “Such disparities are likely to have been increased by the recent deregulation of university fees for professional education in Ontario. Some of the effect of racialization on access to the profession must reflect differences in education, earnings and wealth.”

Osgoode's Sossin agrees that law schools have a vital role to play, as classes begin to reflect the country's diversity and inclusive firms become more attractive to those diverse students seeking work. But, he adds, a key foundation for more action in ensuring diversity is better data measuring that diversity, and he wonders why Canadian firms and companies lag far behind the United States in measuring diversity, something he says law graduates use to make career decisions. “What we can count counts,” he says.

> Ultimately, whether the problem is addressed by a better carrot, a stronger stick, or better data to measure the realities, for law firms, the business case is becoming more and more obvious. Canadian issues and initiatives aside, says Gomery, diversity and the resulting business case issue is now global. “If there's anyone out there in a Canadian firm who thinks that a lawyer has to be a white heterosexual Christian, they're mistaken,” she says. “We're now dealing with lawyers from around the world who come in all shapes and packages.”

The result, she stresses, are limitless possibilities whereby she can be in touch with trusted partners from a diverse range of backgrounds around the world, a situation that affords better decision making, which assists clients. “We wouldn't have done it if it wasn't a strong business proposition. It was the right decision.”

And, says Desjardin, “as an individual, it makes you richer. Why resist?”

Jeremy Hainsworth is a freelance legal affairs and business journalist based in Vancouver.