Law department partnerships for advancing supplier diversity
Corporate diversity, equity, and inclusion (DEI) policies aren’t new for most companies, but scrutiny has certainly intensified in recent years. Companies are increasingly showing a commitment to advancing DEI throughout the business.
As U.S. companies evaluate their DEI efforts, program gaps are surfacing that highlight opportunities to weave DEI more thoroughly and effectively into operational systems and processes. Most common is the need to adequately measure efforts against organizational goals for greater reporting and transparency. Law department operations can help general counsel and their law departments be a strategic leader in the DEI space, identifying opportunities to embed metrics, monitor results, and suggest change for continuous improvement.
Those efforts can be a model for promoting DEI throughout the business, such as in the supply chain. The law department can be a key partner to procurement in establishing a successful supplier diversity program. According to Harvard Business Review, “a diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group.”
Here are three ways the legal department can help inform supplier diversity across an organization.
Setting goals and using metrics to support change
While attention to corporate diversity programs has increased, transparency and reporting on progress still lag. The legal department plays a significant role in helping its organization set goals, develop measurable initiatives, and report results for demonstrated progress. There are also organizations that can help shape these goals and encourage industry support.
For instance, the legal department can use external diversity benchmarks, such as the Diversity Lab's Mansfield 4.0 Rule, to source law firms. The Mansfield Rule measures whether law firms have affirmatively considered at least 30 percent women, lawyers of color, LGBTQ+ lawyers, and lawyers with disabilities for leadership roles, promotions, and other growth opportunities.
Another resource for legal departments is the Model Diversity Survey published as part of the American Bar Association's Resolution 113: Promoting Diversity in the Legal Profession. Resolution 113 urges legal departments to direct a greater percentage of legal spend towards diverse attorneys, and provides the survey for law firms to report their diversity metrics. Corporate signatories to the resolution can use the survey results as a tool for determining the firms to engage.
In the retail business context, Fifteen Percent Pledge is a nonprofit advocacy organization that urges major retailers to commit 15% of shelf space to Black-owned businesses. “The 15 Percent Pledge seeks economic equality and prosperity for Black future founders, Black students, and Black people in the workforce,” according to its web site. The 15% benchmark represents the percentage of the U.S. population that is Black or mixed race.
Setting and then enforcing organizational goals — with transparent measurement to show progress — will help advance economic inclusion and diversify the industry in which the company operates.
Working with procurement for vendor evaluation and onboarding
Law departments that imbed DEI practices into their daily activities can lead the push for supplier diversity in other parts of the business. They can also model supplier diversity best practices for the rest of the organization:
- Communicate the company's diversity policy to suppliers. Look for opportunities to ensure suppliers are onboarded with the same expectations as the company holds for its staff and leadership, emphasizing ethics, diversity, and sustainability as core values.
- Periodically assess the suppliers’ diversity efforts and hold them accountable if they do not meet the company's expectations. For example, some law departments require their outside counsel to provide annual diversity information that don't just reflect a check-the-box approach, but demonstrate meaningful steps toward diversity.
- Include diversity requirements in requests for proposal (RFP) to prospective suppliers. For example, an RFP may require responding law firms to provide diversity data about their attorneys and to staff legal matters with a diverse team of attorneys and legal assistants.
Seeking stakeholder feedback for continuous improvement
By implementing these practices and seeking feedback for continuous improvement, law departments can promote greater diversity among their law firms and legal service providers. Companies can apply these same approaches to drive greater equity throughout their industry and supply chains.
Create a diversity scorecard. The scorecard should measure and track the company’s overall progress toward its ambitious supplier diversity goals and the level of compliance of outside vendors like law firms. The scorecard can be used to report diversity results and hold leadership accountable.
Enlist employees to evaluate the program. Collect their feedback and ideas for improving the program. This can include the department that selects the supplier (like the law department) or other colleagues that interact with the supplier. Offer anonymous channels for feedback in case employees need to share sensitive or controversial interactions with colleagues.
Engage suppliers. For agreements where the company relies on the supplier to bring in diverse subcontractors or employees, talk with them about what limitations they face and see how you can support them in removing barriers.
Invite ideas and improvements. Share the insights from scorecards, employees, and suppliers with internal stakeholders. Invite ideas to remove barriers and improve the program. Empower employees to act on those ideas when they can or support them in advocating larger changes.
When in-house counsel partners with legal operations, procurement, and other business leaders and works to establish relationships with their suppliers, they can all help advance supplier diversity throughout the organization. Practical Law provides trusted resources to help advance these efforts. These tools help in-house counsel advise the business, present DEI priorities to the corporate board, and manage and evaluate suppliers — including outside counsel.