In the Thought Leaders series, College Fellows address the challenges and innovations on the horizon for the profession. The essays originally appeared in the inaugural Inside Legal Thought Leader Digest. 

Differentiation Focused on Marketing, Positioning and Pricing

I have been doing e-discovery, nee litigation support, since 1989. In the last few years, I have seen the legal market diverging into two new worlds of electronic data and discovery (EDD). How does each look and what does it mean for its inhabitants?

Ignorance and Denial World

Many lawyers and law firms seem unfamiliar with e-discovery. I wish I could say ‘uncomfortable’ but discomfort suggests a degree of familiarity that in this instance is absent.

I regularly talk to EDD professionals, who report stories of lawyers who are shockingly unaware both of the legal rules and practical issues of EDD. At conferences, the handful of judges known for their grasp of and decisions on EDD say many litigants (and judges) are clueless about EDD. For example, in October, I attended the Masters Conference, an EDD event. In the session “More on E-Discovery Certification,” the panelists bemoaned how many lawyers and other legal professionals lack even basic EDD know-how.

I offer two hypotheses to explain this world. One is ignorance. It’s hard imagining, however, a lawyer missing the hundreds if not thousands of articles, conferences, and advertisements about EDD over the last half-dozen years. Even general legal publications and mainstream media cover it. If, in fact, more than a few lawyers have missed all this, perhaps we as a profession have an even bigger problem to fix.

Another possibility is denial. Some lawyers seem to think digital data is unimportant or that the rules of civil procedure regarding EDD somehow do not apply to them. The willing suspension of disbelief is fine when enjoying a movie, but not for professional pursuits.

Inhabitants of these worlds take a big risk, namely judicial sanctions and malpractice. And let’s not forget ethics: Model Rule 1.1 requires competent representation. Failure to at least consider the role of EDD in a contentious matter arguably violates the rule. Education is the cure. It is readily and widely available. Now, persuading this world’s inhabitants that they need it…well, that goes beyond my expertise.

The Real World

Fortunately, many lawyers and law firms live in the real world where they know about and regularly engage in EDD. However, inhabitants may not yet have noticed that after a period of rapid evolution,

their world is entering a new, slower phase. EDD became a big deal around 2002 or 2003. I characterize its early days as the Wild West. Technology debates loomed large, for example: file formats (TIFF, PDF, or native); review systems (hosted or in-house); and productions (include metadata or not). Litigators and commentators alike hung on every word of the few judicial decisions.

The Federal Rules were up for review and were amended in 2006. Vendors came—and they came and they came, from copy shops, Silicon Valley, and points in between. Smart law firms saw opportunity and built document review empires, generating huge profits, while others put their heads in the sand and ignored EDD. Corporate law departments struggled with information governance and retention policies.

Two events in October caused me to realize that this world has vastly slowed down. EDD today has matured; it has become a business battle. Of course, not every debate is resolved, but the areas of contention have narrowed considerably.

First, when I was at the Masters Conference, I had many private conversations with EDD experts, some leaders in the field. They confirmed my sense that the market is maturing and consolidating, even if it is still growing. The action today seems more in the realm of marketing than of solving fundamental problems. The Wild West has been tamed. Now, it’s a matter of case law development and convergence on a few technologies and processes.

And second, days after the conference, thumbing through the October issue of Corporate Counsel magazine, I stumbled on a two-page ad spread for WilmerHale’s Discovery Solutions offering. This site describes in some detail, including pricing, the firm’s approach to e-discovery and document review. The reference to the firm’s low-cost (relative to Washington, New York, or Boston) Dayton service center is via a listing of lawyers in Dayton. The site is substantively impressive; more importantly, it reflects that marketing and positioning have become primary.

WilmerHale competes for e-discovery and document review with other large firms and vendors. Case in point, an “unaided recall” list (ones I happen to remember) of firms with dedicated e-discovery practices includes:

• Pillsbury
• King & Spalding
• Morgan Lewis
• Orrick
• Fulbright
• LeClair Ryan
• Hughes Hubbard
• Ryley Carlock & Applewhite

Yet law firms have no lock on this business. In fact, in the Wild West days, the vendors dominated. I first started seeing a change in 2007: my blog post “Coming E-Discovery Battle between Vendors and Firms” noted the emergence of law firms with their own EDD capabilities. I even encouraged this trend with my white paper called “4 Ways an eDiscovery Attorney Can Make Your Firm More Successful,” suggesting that law firms consider hiring lawyers specializing in EDD.

Law firms listened. They built EDD capabilities. Yet they still compete, first, with growing corporate law department EDD capabilities and second, with a still-long list of vendors. So as I see the EDD market, the real action is no longer fundamentals, but a battle for market share based on pricing and feature mixes.

One of my recent Twitter exchanges helps makes the point. I asked re Wilmer Hale “Do other firms have dedicated #eDiscovery sites?,” to which leading U.K. EDD expert Chris Dale responded “any firm not doing something similar within 2 years is dead for #ediscovery work.” I think Chris is right.

Any firm that litigates will need not just understand e-discovery, but have the capability to do it. Owning is one option, outsourcing another. Either way, firms will have to position themselves as having expertise and capabilities.

Many lawyers are “outstanding.” Clients take that for granted. They also take for granted decent technology and process. So law firms need to persuade ever-more-sophisticated clients that the firm can do the EDD work cost effectively. Go ahead, tweak your process, tune your technology, but make sure you have the right business strategy and marketing. As EDD capabilities grow and converge toward standards, competitive differentiation is increasingly hard. Price, service, and marketing become the keys to winning.

Okay, I am forward thinking. We may not be quite there yet but, to paraphrase Churchill, we are way past the end of the beginning.

Ron Friedmann has spent over two decades improving law practice and business with technology, knowledge management and outsourcing. He has worked at Integreon, Prism Legal Consulting, Mintz Levin, WilmerHale, Bain & Co., and two legal software companies. Ron has a JD from NYU School of Law (’86) and BA in Economics from Oberlin College (’79). He is a trustee of the College of Law Practice Management; member, Board of Governors, Organization of Legal Professionals; co-founded and organized the Law Practice Technology Roundtable; blogs at Strategic Legal Technology; and Tweets @ronfriedmann. He be reached at ronaldfriedmann@gmail.com.

This  article is reprinted with permission from the inaugural InsideLegal Thought Leaders Digest: COLPM Issue. View the entire publication at InsideLegal.com.

Additional Thought Leader Series Essays

• Diversity Trends—The Individual as Change Agent by Kendal Tyre
• Apps 4 Justice by Ronald W. Staudt and Marc Lauritsen
• Impact of the Legal Services Act by Tony Williams

InnovAction Award winners are recognized around the world as being the best of the best among individuals and firms who are taking chances and creating advantages for their practices. Read more about the Awards here, and be sure to read about all the past winners.

Details for Entry

• You must submit six copies of your entry via mail or courier. Submissions can be made by hard copy, video, CD or on a thumb drive. You may also e-mail your entry in PDF format to colpm@comcast.net.
• All entries my be received by Friday, June 15, 2012 accompanied with the $199 US entry fee.
• Winners receive a beautiful crystal award at the InnovAction Awards ceremony, and are invited to make a presentation describing their innovations.
• Winners will be highlighted and promoted in ads placed in media sponsor publications, on the College website and featured in the quarterly newsletter.
• Winners will be prominently featured on the InnovAction Hall of Fame page that celebrates the innovative accomplishments of lawyers and law firms on a global basis.

Please contact Karen Rosen, College Administrator at 720.271.7015 or colpm@comcast.net if you have any questions or need additional information.

In the Thought Leaders series, College Fellows address the challenges and innovations on the horizon for the profession. The essays originally appeared in the inaugural Inside Legal Thought Leader Digest. 

The Global Dimension

The Legal Services Act 2007 is finally coming to fruition. From early 2012, English law firms can take external investment and non-lawyers will be able to build their own law firms from scratch, or ‘buy’ existing ones. In some cases, firms may seek investment from private equity funds, and may even float on the public markets. These will be called Alternative Business Structure (ABS) law firms.

The debate over whether this will be a legal “Big Bang” remains in play. But it is likely we will first see the High Street, or Main Street as it is in the U.S., feeling the most impact. Consumer-level legal services, from insurance claims to residential property purchases, will be the easiest to commoditize and benefit the most from large scale operations with major IT investment, new delivery models including call centres, and the development of powerful consumer brands.

Therefore, we predict that after the LSA comes fully into force we will see:

• Commoditised legal work increasingly absorbed by ABS law firms and new entrants that are better suited to handle a high volume of matters.
• Legal Process Outsourcers, perhaps with private equity investment, may build their own law firms, too—again to primarily handle commoditised work—although with a focus on larger commercial matters.
• A number of medium-sized law firms will take external funding in order to grow rapidly and take market share—perhaps by taking over rivals—to become significant brands among the U.K.’s top 100 firms.

Asia Pacific Leads the Way

But, this is not a development confined to English firms. Australia already permits external investment and so far two ABSs have floated on the stock market, with Slater & Gordon, already having seen considerable success. Both ABS law firms are focussed on claimant litigation. In Europe, Germany is strongly opposed to external funding. France’s Darrois Report in 2009 was meant to be a total review of the profession, but dodged the issue of external investors. However, Spanish rules do permit it. Asian jurisdictions remain fairly conservative and do not permit non-lawyer ownership. However, the U.S.— the world’s largest legal market—is now entering the external investment debate, too.

U.S. law firm Jacoby & Meyers is at the forefront of the campaign to place law on the same financial footing as any other business in America, i.e., able to take external investment to fund growth. It has launched a bid through the courts in New York, New Jersey and Connecticut to revoke local bans. The firm has a solid track record for showing what law firms can do; Jacoby & Meyers was the firm that won the landmark 1977 Supreme Court case permitting law firms to advertise.

It is interesting to consider that at the time of the advertising case, many believed that law firm advertising would undermine ethics, confuse the public and encourage unfair practices. Today, most firms have a strong presence on the web, some advertise and others engage in different promotional activities. As a result, clients are able to make more informed decisions as to the expertise and level of service they can expect from their legal advisors.

Is Resistance to ABS Futile?

Now, in 2011, we are at another watershed moment, filled yet again with fears over creating unethical behaviour. The key counter argument to ABS is that investors will subvert the lawyer’s duty to help the client, especially if subverting that duty helps the investors. The Legal Services Act and the rules made under it seek to address these concerns. However, in a professional services business your reputation is your only asset— remember Andersen! Accordingly, not only is it good ethics, but also good business to maintain a primary duty to your client. Any firm that forgets that will lose clients and damage the value of the business—and face major litigation risk.

The American Bar Association (ABA) is currently welcoming input on the question and has commendably stated it will keep an open mind until it has studied all responses in detail. Meanwhile, State Senator, Fletcher Hartsell, has introduced a bill into the North Carolina General Assembly to allow non-lawyer ownership of law firms. The limit of non-lawyer ownership would be 49 percent, but this would still be a huge change. At present non-lawyer ownership is extremely limited in the U.S., with Washington, D.C. being a rare example of a jurisdiction that permits the practice. However, the take-up in the capital has not been dramatic. Major Washington-based firms have not become ABSs. The reason is a lack of a national level playing field. No major law firm wants to cut off access to the rest of the U.S. legal market. Regulatory barricades are also a problem for the U.K. law firms that are now global, but would perhaps like to be an ABS to help fund their expansion. As it stands, an English ABS would need an elaborate legal structure to enable it to operate in jurisdictions that do not permit ABSs. However, with almost 100 U.S. law firms present in London, the U.S. firms may face stiff competition in England for high quality talent if some significant English firms take outside capital and use it as a “war chest” for lateral recruitment. (Note: Since this article was first published, at its April 12-13,  2012 meeting in Washington, D.C., the ABA Commission on Ethics 20/20 decided not to propose changes to ABA policy prohibiting nonlawyer ownership of law firms.)

The Future for an Open U.S. Legal Market

The U.S. is probably the most innovative legal market in the world and a large number of legal businesses that are not law firms have evolved already. From legal process outsourcers such as Pangea3 now owned by Thomson Reuters, to document production companies such as LegalZoom, the U.S. has seen major changes in the production and delivery of legal services. Companies such as Google have already made small investments in legal information and document production companies, but if ABSs are permitted in the U.S., how long will it be before Google or another major company looks for a far greater piece of the action? At the end of the day, subject to an appropriate consumer protection regime which is rigorously enforced (and applies to both existing firms and new entrants), it should be the client who makes an informed decision as to what kind of law firm to use; a small boutique, a global giant or one with external investment. If external funding permits lawyers to do more for their clients and build the services the market wants, then as long as safeguards are in place, external investment could have a positive impact.

Tony Williams is the principal of Jomati Consultants LLP, a law firm consultancy that advises a wide range of primarily U.K. and U.S.-based law firms on strategic issues that include potential mergers and reorganisations. Prior to establishing Jomati Consultants, he had almost 20 years’ experience at Clifford Chance as a corporate lawyer, his last role as Worldwide Managing Partner. He left in 2000 to become Worldwide Managing Partner of Andersen Legal prior to the collapse of the Andersen organisation in 2002 in the wake of Enron. He established Jomati Consultants in October 2002. Tony can be reached at tony.williams@jomati.com.

This  article is reprinted with permission from the inaugural InsideLegal Thought Leaders Digest: COLPM Issue. View the entire publication at InsideLegal.com.

Additional Thought Leader Series Essays

• Diversity Trends—The Individual as Change Agent by Kendal Tyre
• Apps 4 Justice by Ronald W. Staudt and Marc Lauritsen
• New World of E-Discovery by Ronald Friedmann

What I Learned in ‘College’

Each year, some of the greatest minds in the world of law practice management convene at the Annual Meeting of the College of Law Practice Management. Fellows of the College are accomplished professionals from all walks of “legal” life: small firms, big firms, in-house departments, bar associations, service providers and academia.

The past three years a Futures Conference has been included, open to the public. This year’s program, held October 28-29 at the Chicago-Kent College of Law, focused on “challenging the law firm model,” with a special session on value billing. I attended, and Attorney at Work asked me to share some of my observations. So here are five things from the program that really stood out for me.

1. Corporate law departments are pushing the envelope to force large law firms to focus on value. A case in point is the Pfizer Legal Alliance, under which 17 law firms, including giants such as DLA Piper, Skadden Arps and White & Case, have agreed to accept yearly flat fees for an undefined scope of work. The Alliance’s Chief Counsel, Ellen Rosenthal, explained that Pfizer forbids its lawyers from even talking about hours. While bonuses may be awarded at the conclusion of the year, they are based on collaborative behavior and successful outcomes, not on the amount of work done.

2. Adopting the core principles of project management goes hand-in-hand with value billing. Lisa Damon, chair of the Labor & Employment Department at Seyfarth Shaw, described how her firm has adapted principles of Lean Six Sigma to the practice of law, and has produced sophisticated process maps to trace the efficient handling of all types of clients matters. Surprisingly, Seyfarth has even started to address what she dubs “the elephant in the room” when it comes to promoting efficiency—the partner compensation system.

3. While large firms are starting to embrace some aspects of innovation, the lead is still being taken smaller firms. And we’re not just talking about firms that handle so-called “commodity” work. I spoke to two lawyer attendees who are handling sophisticated matters for business clients on a flat fee basis, including one handling a unique type of securities offering.

4. There’s a big revolution coming to the world of document review. Maura Grossman of Wachtell, Lipton, Rosen & Katz reported on a study she conducted showing that computers are much more effective at reviewing documents to identify key concepts than even the most skilled attorneys. As a result, the whole contract and staff attorney model is likely to change soon.

5. Those who innovate will not only have to look at their processes, but also how they view their workforce. Ray Bayley, President and CEO of Novus Law LLC, an industry leader in litigation document review, analysis and management, talked about the Google-like approach his company has taken to spur innovation, including no job titles and no vacation or leave policy. Bayley’s remarks dovetail well with what I’ve seen lately about reorienting how we look at the practice of law.

Steve Nelson is Managing Principal of the Law & Government Affairs and the Law Firm Administration practices at The McCormick Group, an executive search firm based in Arlington, Va.  Steve conducts searches for both partners and high-level marketing, practice management and professional development professionals. Previously, he served in high-level editorial and management positions at the Legal Times and Prentice Hall Law & Business. He also practiced antitrust law at a large Washington law firm. He is a Fellow of the College of Law Practice Management.

• Susan G. Manch is now Firmwide Director of Learning & Development for Bingham, planning and directing the firm’s development strategies for lawyers and staff globally.
• Susan Saltonstall Duncan is now the Chief Strategy & Development Officer at Squire Sanders & Dempsey LLP.
• Bill Gibson’s new book, How to Build and Manage a Personal Injury Practice, Third Edition, was published in January by the American Bar Association Law Practice Management Section.
• Bob Dolinsky is now the Chief Information Officer with Sutherland Asbill & Brennan LLP.
• Bill Meyer, an attorney with Hutchinson Black & Cook, recently returned from war-torn Libya where he spent eight days in November talking to people on both sides of the Libyan struggle, and getting a first-hand look at the country after the gruesome battle to oust Gadhafi’s regime. Meyer, who is Chair of the International Legal Assistance Consortium—a group of lawyers from around the world who assess the legal state of war-torn areas—conducted an investigation of any violations of international law by Gadhafi’s regime, the Libyan rebels and even NATO.

Be sure to send us your news and to check the Fellows Directory to learn more about the Fellows.

The profession is endangered. Law schools are in trouble. New lawyers are unprepared for economic and technological reality. There’s vast unmet need for legal services. Apps 4 Justice attacks these four related problems. The basic idea is to greatly expand programs in which law students create software as part of their education.

Courses that engage students in creating ‘apps for justice’—software applications that do useful legal work—can take many forms. They can focus on tools practitioners can use to ‘work smarter’ and assist others; they can focus on empowering self helpers to address their own problems and opportunities.

Students can build document templates,guided interviews, dynamic checklists, calculators,interactive advisers, instructional modules, games,and decision support systems. Embedded with rich intellectual contexts of doctrine, ethics, history, and theory, such courses can:

• enrich student learning, professional development, and career positioning
• help lawyers serve clients better and live more satisfying lives
• advance access to justice and the rule of law
• help law schools resuscitate their value proposition

The Project

Today, law school clinics deliver important education in the skills and values critical to lawyer competency, while also contributing significant resources to help meet the needs of low-income people for legal services. But this is a relatively recent development. The 5th Biennial Report 1977-78 from the Council on Legal Education for Professional Responsibility (CLEPR) states that in 1969 there were only a handful of law school clinics for credit. Yet by 1978 nearly every law school in the country had such a program. CLEPR in ten years with $12 million triggered a sea change in law school structure: from a handful of clinical professors in 1969 to 1400 clinicians by 2000; from mere hundreds of hours of law student work on legal aid in the ‘60s to millions of such hours in 2000 and every year since.

CLEPR had narrow and focused objectives. Its grants stimulated law schools to establish courses granting law school credit for student work in live client clinics, almost always located in or near the law school building. CLEPR’s financial and programmatic support helped to create a self-sustaining process that has survived long after CLEPR closed its doors and stopped making grants. Withoutany continuing CLEPR stimulus, law schools now employ more than 1,400 clinical professors whose students deliver legal services to low-income people. In his 2002 essay “Taking Out the Adversary: The Assault on Progressive Public-InterestLawyers,” legal ethicist David Luban calculate that students in U.S. clinical courses produced three million hours of legal services for the poor each year.

New solutions to an old problem

Recent developments provide ideal circumstances for a new law school initiative directed explicitly at delivering more extensive access to justice for low-income people. Using Technology Initiative Grants, the Legal Services Corporation has established state-wide legal aid web sites in every state and a national server for distributing HotDocs automated documents and A2J Guided Interviews via all of those websites. Law students can be taught to write and deploy these advanced technologies, using statewide websites as platforms for 24/7 legal service delivery to low income people. While learning these tools, law students can contribute to legal aid as authors, programmers and editors.

The best setting for this new kind of ‘learning by doing’ is within a law school clinic under the supervision of an experienced educator. Skills learned by students in such ‘apps for justice’ clinics are critically important for a variety of careers, including fee based practices aimed at moderate income clients and emerging large firm practices triggered by fixed fee billing models now demanded by corporate clients. By constructing useful applications, students not only (1) learn about substance (doctrine, procedure) in a given area and (2) learn how technology can be used creatively to assist in legal work (and some of the policy and ethical aspects of doing so), but (3) produce tools that they or others can bring to bear to improve access to justice. Students also gain credentials for current and future employment.

The goal is to recreate the CLEPR successes of thirty years ago by establishing a permanent teaching cadre in U.S. law schools that can offer course credit for practical instruction in system building,aimed at real client problems. It is self-consciously focused on institutionalizing an organic engine for growth of new resources to support education in new skills that are now critical for lawyer competency while, at the same time, supporting legal services to the poor. The plan is to create an engine fueled by law professor and law student energy to build hundreds of A2J Guided Interviews, document templates and public education web pages that enhance access to justice.

The Bigger Context

While this initiative is focused on specific forms of student work to expand access to justice for low-income Americans that build on established academic successes and an existing national infrastructure,it should be seen as the opening phase of a larger process to exploit dramatic new opportunities to enrich legal education. Courses and clinics that engage students in creating ‘apps for justice’—essentially, things that do useful legal work—can take on many forms. All of these agendas and system types can be embedded in courses that provide rich intellectual contexts of doctrine, ethics, history, and theory. And all can potentially provide a meaningful ‘quadruple bottom line’:

• For students: learning, professional development, career positioning
• For society: advancing justice and otherwise improving the world
• For the profession: supplying new knowledge and resources with which lawyers can serve clients better, live more satisfying and prosperous lives, and outperform new entrants, like online legal assistance services
• For schools: strengthening law schools as institutions by visibly delivering the above results(improving public relations, contacts with court and bar, student and faculty recruitment, alumni sentiment, etc.)

A more detailed account of this project will be published as a chapter entitled “Apps 4 Justice: Law Schools, Technology and Access to Justice” in an upcoming book “Educating the Digital Lawyer,” Oliver Goodenough and Marc Lauritsen, editors, Berkman Center at Harvard University, 2011.

Ronald W. Staudt is the associate vice president of law, business and technology and professor of law at Chicago-Kent College of Law. Ron is the director of the Center for Access to Justice & Technology (CAJT)-a law school center using Internet resources to improve access to justice with special emphasis on building web tools to support legal services advocates, pro bono volunteers and pro se litigants. He is a Fellow and Vice President of the College of Law Practice Management. He can be reached at rstaudt@kentlaw.edu.

Marc Lauritsen, author of The Lawyer’s Guide to Working Smarter with Knowledge Tools, is president of Capstone Practice Systems and of Legal Systematics. Marc has served as a poverty lawyer, directed the clinical program at Harvard Law School, and done path-breaking work on document drafting and decision support systems. He is a Fellow of the College of Law Practice Management and co-chairs the American Bar Association’s eLawyering Task Force. He can be reached at marc@capstonepractice.com or @marclauritsen.

This  article is reprinted with permission from the inaugural InsideLegal Thought Leaders Digest: COLPM Issue. View the entire publication at InsideLegal.com.

Additional Thought Leader Series Essays

• Diversity Trends—The Individual as Change Agent by Kendal Tyre
• New World of E-Discovery by Ronald Friedmann
• Impact of the Legal Services Act by Tony Williams

Many in law firm management know that having the goal of a diverse workforce is ‘the right thing to do’ and that it is good for business. However, those same leaders often struggle to affect meaningful change when it comes to diversity, and after years of trying with little success, ‘diversity fatigue’ begins to take hold. This is a typical scenario in law firms across the nation. The first step to jump start a diversity initiative and avoid ‘fatigue’ is realizing that the responsibility of creating a diverse and inclusive workforce is the responsibility of everyone in the organization and not just that of a law firm diversity committee.

Evolving demographics

The demographics of the United States are clearly changing. The most recent census, completed in 2010, found that almost half of infants born in the U.S. belong to racial and ethnic minorities. By 2042, nearly half of the total U.S. population will consist of people of color. The Washington Post recently reported that eight cities—Memphis, Tennessee; Modesto, California; Las Vegas, Nevada;Jackson, Mississippi; San Diego, California; Washington,D.C.; Oxnard, California and the NewYork City region – joined a list of 22 of the largest100 U.S. metropolitan regions that have more minority races in them than Caucasians.

Law firm clients, primarily large Fortune 500 corporations, are at the forefront of ensuring that law firm demographics reflect this new reality. These companies are using the economics of outside

counsel selection decisions to drive change. The chief legal officers in these corporations are ending or limiting relationships with firms whose performance,in their opinion, consistently evidences alack of meaningful interest and commitment to diversity.

Increasing diversity visibility

Today, the diversity track record of each law firm is requested in an overwhelming majority of requests for proposals and an increasing number of corporationsare surveying firms on their respective diversity initiatives. In some instance, corporations are using electronic billing to track the time and amount of work that diverse attorneys are working on their matters and highlighting where firms can improve. For those law firms that receive a failing grade in any of these diversity indicators, their continued working relationship with these companies is at jeopardy. In short, with clients pushing the diversity agenda, diversity (or the lack of it) can have a direct impact on a law firm’s bottom line financial performance. As the general population continues to diversify, the pressure on firms will only increase.

The essential question for most organizations including law firms is how to embrace this change,satisfy increasing client demands regarding diversity and ensure that they cultivate organizations that are inclusive. Of course, no one has the only answer and there is likely more than one solution to the problem, but what seems clear is that when each individual in the organization is given the tools and incentive to effect change, diversity can truly become a core value of the organization’s culture and a basis for change.

One example is Nixon Peabody’s Diversity Challenge, first launched in July 2010. It is based on a commitment from a broad cross-section of the firm’s personnel to take specific action in the interest

of promoting diversity. The program works to enhance the recruitment, development, and retention of diverse attorneys and staff and is believed tobe one of the first of its kind in the nation.

Under the Diversity Challenge, each Nixon Peabody attorney is ‘challenged’ to devote 40 hours (3.3 hours per month) annually to a diversity initiative, activity, or event. The 40 hours are tracked through time sheets and count towards the lawyer’s non-billable commitment to the firm. To help attorneys identify appropriate activities, on a periodic basis, the firm provides examples of the types of activities that qualify for Diversity Challenge credit. Examples of qualifying activities include:

• Organizing or attending a diversity-oriented event, reception, or seminar
• Mentoring a minority, LGBT or woman attorney
• Working with Human Resources in the development of professional training and partnership coaching programs for diverse attorneys
• Working with the recruiting manager to identify diverse candidates
• Reaching out to current clients with affinity groups or diversity committees to create joint projects

The Diversity Challenge was implemented to re-establish the firm as a leader in law firm diversity.

While Nixon Peabody had made tremendous strides in diversity since the formation of its Diversity Action Committee (DAC) in the fall of 2004, the firm’s assessment of retention efforts revealed a variety of issues. As the firm’s diversity initiatives had matured, it became clear that it needed to energize the program and refocus its efforts. The firm needed to bolster its mentoring programs and look to promote minorities and women who had historically been underrepresented, especially in firm leadership roles. The Diversity Challenge provided a means to address these challenges. The promotion of diversity and inclusion is now a ‘top of mind’ issue for, and the responsibility of, every attorney in the firm.

Achieving diversity accountability

The issues surrounding diversity and inclusion are present on a daily basis at a typical law firm. Decisions are made every day with respect to who will receive a ‘plum’ assignment, who will be mentored, who will be invited to attend a pitch or client meeting or who will receive funding to attend a professional development seminar. Each morning at Nixon Peabody, when an attorney logs onto the firm’s network, each attorney’s FinancialDashboard illustrates their billable hours to date as well as the hours that they have billed to the Diversity Challenge. This is just one example of how the Diversity Challenge is intended to be a continual reminder that Nixon Peabody attorneys must challenge themselves to be a more inclusive firm and a firm that provides equal opportunities for everyone. It’s about engraining in everyone (and in the firm culture) that diversity issues are everyone’s responsibility and not just that of a chief diversity officer or a diversity committee.

Since its launch, more than 41% of the firm’s attorneys have participated in the Diversity Challenge, logging over 5,000 hours of non-billable time toward the initiative. Also, many attorneys participating in the Diversity Challenge had not previously been involved in the firm’s diversity initiatives. In a further effort to institutionalize diversity as a core value, each attorney was asked in their performance evaluation to describe the ways in which they support the firm’s diversity and inclusion policies.

In terms of the legal industry as a whole, the Diversity Challenge is an initiative that could be launched in various cities or regions. As noted in the February 25, 2011, issue of Canada’s Lawyers Weekly: “The genius of Nixon Peabody’s diversity program lies in its familiarity (lawyers understand hourly measures and they respond to targeted commitments) and universality (diversity is effectively communicated to be every lawyer’s responsibility). But best of all, it’s an approach that any law firm of any size can adopt.”

Kendal Tyre is a Partner at Nixon Peabody and counsels companies on international business transactions. He represents clients in mergers and acquisitions, joint ventures and strategic alliances, licensing and franchise matters. He has extensive business law and transactional experience, advising on financings, entity formation and maintenance, corporate reorganizations and business divorces. Kendal is co-chair of the firm’s Diversity Action Committee. He can be reached at ktyre@nixonpeabody.com.

This  article is reprinted with permission from the inaugural InsideLegal Thought Leaders Digest: COLPM Issue. View the entire publication at InsideLegal.com.

Additional Thought Leader Series Essays

• Apps 4 Justice by Ronald W. Staudt and Marc Lauritsen
• New World of E-Discovery by Ronald Friedmann
• Impact of the Legal Services Act by Tony Williams

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