In 2018, the International City/County Management Association (ICMA) released its Equity and Inclusion Toolkit, which provides resources to empower local governments with best practices in the interest of building inclusive organizations, and by extension, more welcoming communities. And while many DEI initiatives at the local government level are housed within human resource divisions and include enhancing DEI for current and prospective employees, they may not always factor in how to ensure that outsourced work (and the associated procurement processes for contracts) can be DEI-focused as well.

Simplifying procurement processes

Local governments are large users of request for proposal (RFP) processes, in which agencies define the services or goods desired, craft an evaluation criterion, and solicit responses. Municipalities and county-level governments have established price points that automatically trigger a formal procurement process, which can ensure against nepotism or corruption and discourage government waste in awarding contracts.

Some accessible means of streamlining and modernizing RFPs may include:

• • • allowing proposal responses to be submitted electronically;
    • ensuring that any required forms can be accessed as form-fillable PDFs;
    • utilizing a proposal tracker where vendors can check on the status of their RFP review. (For example, the City of Tacoma, Wash., has an embedded proposal tracker on its website that greatly increases vendor awareness and transparency throughout the procurement process); and
    • sharing, clearly and explicitly, the evaluation criterion and weighting for proposal review and using this criterion in the evaluation process.

Reducing barriers for applicants

An inclusive procurement process removes potential barriers that might discourage the widest slate of vendors from bidding. Removing steps that add significant time or cost to project proposals, often with little gain for the reviewer, or which allow for greater RFP exposure can attract a more diverse pool of vendor applicants.

For example, some methods government agencies can use to reduce these barriers and gain more proposal exposure might include: not requiring hard copy submittals for RFP responses, or removing notarized signature page requirements wherever possible. Also, RFPs should be advertised in free access locations, rather than exclusively being posted on pay-to-play vendor sites or bid aggregators. (State municipal league organizations often offer RFP postings at no or nominal cost for their members.) Agencies should also ensure that RFP timelines for response are long enough to garner response, such as three weeks at a minimum, but preferably one month. And they should share answers to all questions received by submitters in a public location — such as on a proposal tracker website — to ensure information is equal for all parties.

Setting benchmarks for data & tracking

If a local government’s goal is to increase the percentage of contracts granted to businesses owned by under-represented individuals, then the scope of the current awarding metrics must be structured in order to effectively measure change.

For example, government agencies should make sure that all contracts entered for local government services include a declaration page noting majority ownership and identifying diverse business characteristics. Where possible, agencies should evaluate majority ownership of past local government contracts to better understand necessary diversity benchmarks.

Further internal analysis may be required. Larger municipalities sometimes opt to have outside firms complete economic disparity studies in order to get a broader analysis of government efforts and contract-award history and to understand market opportunity within communities. While in municipalities with lower levels of contracting, this data may be able to be generated internally.

These efforts can pay dividends. A study into the economic disparity of city contracts undertaken by the City of Asheville, NC in 2018, found that less than 5% of the city’s non-construction projects were awarded to women- or minority-owned businesses. These findings triggered the update of the city’s Business Inclusion Policy and shifted contract awarding methodology from race-neutral to race-conscious.

Making meaningful connections

Collecting data through a study — such as the one done by Asheville or another done by as the City of Boston — can help municipal governments more fully understand the economic disparity of municipal contracts. The likely result are some key and specific actions that local governments can take to connect with diverse business communities, such as develop a landing page, such as the one created by Asheville to spell out the municipality’s business inclusion efforts.

Municipalities should also participate in state-run diverse-owned business registries and consider favorable weighting in the RFP process for registered businesses. In fact, some local governments opt to create their own business registries rather than using state registries.

Further, agencies seek to connect directly to these diverse-owned businesses by hosting small business open houses or standing calls to connect small businesses in the community with contracting or work opportunities. Municipalities should also forge collaborative partnerships with B2B organizations in their greater region or service area. For example, the Hispanic Chambers of Commerce, LGBTQIA+ business networking organizations, and others can help connect diverse businesses to local government opportunities.

Finally, more local governments are providing exclusive opportunities for minority-owned businesses to bid for municipal contracts. In Boston, for example, the city established a Sheltered Market Program in early 2022 for projects in key areas that were identified in their disparity study. Programs such as these help build the capacity of small, local, and diverse businesses to bid for larger government contracts down the road.

These actions, taken in total, can foster an improved state of equity in the government procurement process for diverse-owned business in the future.

Indeed, in a spot poll of roughly 30 in-house lawyers in the San Francisco Bay Area in September, all of them indicated that their companies and teams were either fully remote or hybrid.

Yet, despite the prevalence of remote or hybrid workplaces, the potential biases that can impact staff members who are working mostly remote or hybrid still remains. The types of biases include: i) implicit bias, which is a form of bias that occurs automatically and unintentionally and affects judgments, decisions, and behaviors; ii) proximity bias, which is the tendency to favor people who are closer in time and space; and iii) affinity bias, an unconscious bias that causes people to gravitate toward others who appear to be like them.

For those employees who are negatively impacted by these biases in a hybrid setting, management’s poor behavior can be experienced as microaggressions. This can be keenly felt during remote of hybrid meetings, especially if those running the meetings ignore remote attendees, don’t invite the more introverted or junior people to contribute, avoid eye contact, or allow extroverts to consistently dominate the conversation.

Management should also be careful not to ignore virtual meeting invites or consistently reschedule remote meetings because ignoring emails, video call invites, recurring meetings, and more — especially when done by key partners — is a form of bias that can prevent people from doing their jobs well in a remote-first world.

Forging partnerships with other corporate functions

Chief legal officers (CLOs) have an influential role to play in mitigating this bias not just within their team as a manager, but more importantly across their company through the creation of policies, norms and behaviors. Here are some of the ways CLOs are attacking bias at the company level:

• • Setting expectations that human resources (HR) need to work closely with the law department — This includes not only forging an organically strong relationship, but establishing a top-down expectation that HR should look to the company’s law department as a key input and decision-maker for company policies and approach. This should be a priority, given the important role of the department in mitigating biases company-wide, suggests Megan Niedermeyer, General Counsel & Corporate Secretary at Fivetran, who joined the software company during the pandemic as its first legal leader.
  • Focusing on policies and practices that can help reduce bias — These exercises include pay equity audits, which analyze median compensation for each level by department, location, function, and team to understand if those employees with underrepresented identities are receiving lower salaries. Niedermeyer says this was one of the first tasks she tackled with outside employment counsel when coming to Fivetran. In addition to pay equity audits, in-house counsel should be adequately involved in the performance review calibration process, reviewing both median timing to promotion and pay increases for each level by team. In this way, the law department can determine if bias is creeping in and can use this information for sensitive conversations if this is occurring, she says.
  • Leveraging technology to build a culture of feedback — Similarly, CLOs as the chief risk officers of their companies by default, can impact how a return-to-office policy is going, especially when some corporations have had a policy that they’ve had to review or roll back. Niedermeyer explains how she used a strong partnership with HR and a technology platform to increase employee feedback on how the return-to-office process was going, as well as allowing anonymous reporting of incidents to obtain better data on potential negative cultural hot spots. Indeed, workplace harassment in the digital realm, which can be as high as 40% of those who experience work-related harassment, is an unfortunate side effect of more remote working.

Modeling inclusion as an aspect of C-level culture

CLOs, through their conduct and leadership style, can be a model cultural promoter for demonstrating inclusion, which proactively can create a feeling of psychological safety and this, mitigate biases. Alexa Summer, CLO of Rho, suggests ways this could be accomplished, such as:

• • Tailoring management style — Summer customizes her engagement approach with each person she works with, including her peers, direct reports, members of the company’s law department. Specifically, Summer says she seeks to understand what the motivations, goals, and preferences for communication are by asking questions to create a give-and-take, flexible atmosphere that offers a joint approach to problem solving.
  • Repeating expectations of work performance — To increase and maintain trust and transparency, Summer says she often reinforces expectations of performance in hybrid work situations through one-on-one meetings with her direct reports. This ensures that she and her employees maintain a consistent understanding of work requirements and performance goals, especially in a dynamic remote working world where everything evolves quickly.

The management behaviors that advance a culture of trust, respect, and inclusion while mitigating bias in remote and hybrid work are pretty much the same as those that comprise a great leader. Most of the time, this just requires adapting these behaviors to a different paradigm — in this case, one of a remote-first mindset.

The intersection of climate change and inequality is reshaping the world, and the social contributions of private sector companies are increasingly part of the expectations and solutions to a just transition for investors, members of communities in which companies operate, and members of civil society. However, myths around the lack of measurement of social impact persist, despite well-known ways of doing so.

Tackling the “S” through investors’ eyes

Investors and the financial sector have been tackling how to account for, measure, and communicate companies’ social impact for a while, according to Bettina Reinboth, Director of Human Rights & Social Issues at Principles for Responsible Investment (PRI), a UN-supported network of institutional investors that promotes responsible investment through the use of sustainability practices. In a recent article, PRI clarified how the UN Guiding Principles on Business & Human Rights set expectations for investors to act on human rights.

Institutional investors, particularly those considered universal owners, maintain a long-term investment horizon. This takes a multi-decade view of how the transition to a sustainable global economy impacts people internally and externally, the main component of the social part of ESG.

Likewise, corporate directors are focusing on holistic employee well-being now in large part because of investors’ demands and the upcoming regulatory requirements to meet their fiduciary and oversight obligations. “Talent is a part of everything an organization does, and we see boards leaning into talent matters with management more than ever,” says Carey Oven, National Managing Partner at Deloitte’s Center for Board Effectiveness. “They are requesting more data around engagement and sentiment and exploring enriching ways to get feedback from the workforce in a much bigger way than they had before.”

Up until a few years ago, companies could get away with having a human rights policy with the expectation of adherence from the top of the organization to the bottom, including board oversight, as important foundational elements. More recently, however, investors’ savvy is increasingly on the rise, and investors are looking for more detailed information about measurement. Some of the more pointed questions on investors’ minds include: i) how actual and potential negative outcomes for people are identified; ii) what due diligence and verification of the adherence to policy and practices are performed; and iii) what is the process for dealing with effective grievance mechanisms.

In part, this is the reason for the spike in investors noting publicly when there is a gap between what a company says it does and what it actually does within ESG.

Culture & well-being as a key measurement of the “S”

The well-being of people is central to the social performance of firms. Investors and now corporate directors are looking for ways to capture social indicators as part of companies ESG strategies. Yet, in order to measure an organization’s social impact, a company must first define its stakeholders, which include employees, consumers, and local communities, including those that may be part of the company’s supply chain.

Because employee well-being is central to that of society, for companies to understand the full scope of how their actions and policies contribute to well-being is important. Critical elements of a comprehensive corporate approach to well-being include: i) aspects about the work itself, and the social interactions that employees have at work; ii) the skills each employee gains through employment; and iii) the sense of purpose from the job experienced by each employee.

In addition, measures of employee inequality, representation, pay, promotion, and overall working conditions are equally important. More specifically, there are many people well-being indicators organizations can use to measure their social impact, according to the Organisation for Economic Co-operation and Development (OECD). These indicators include:

• • • • Employment — such as hiring, turnover, and promotion.
      • Earnings — wages, benefits, executive pay gap, and financial insecurity.
      • Learning & skills — skills obtained on the job and the intersection of work and personal development.
      • Health —absenteeism, mental health, and health & safety in working conditions.
      • Social support — manager effectiveness and trust between workers.
      • Work/life balance — annual leave, parental leave, and average working hours per employee.
      • Employees’ voices & feedback — trust in management, upward feedback of managers, and mechanisms to give employees a voice.

Further, to address the impact on the well-being of local communities and society as a whole, the OECD highlights the following indicators:

• • • • Economic — Taxes paid and revenue generated in each locality.
      • Human — strategic community investment, such as when a company brings its banking relationships to assist in small business funding for local entrepreneurs.
      • Social — board composition and compensation, political contributions, and fines paid.

Analyzing the social risks and impact through lens of well-being of employees and society is one of many ways to measure the “S,” but also a simple and logical one. The interplay between the social impacts during the climate transition will only grow.

Many assume that the expected global economic slow-down will stall sustainability efforts, but PRI’s Reinboth argues the opposite — that progress on sustainability will accelerate based on recent evidence of momentum because of the simultaneous, negative multiple shocks to the well-being of people and society during the global pandemic as the crisis shined a spotlight on the global vulnerabilities and how the social part of ESG intersects with the “E” and the “G” as well.

At times, however, this blind focus on achieving that singular objective could actually lead to a mismanaged AI process that doesn’t take potential biases into account, researchers say, adding that these biases could have been baked in the AI all the way back at the data collection stage. As a result, the idea of instituting fairness metrics into AI development is starting to gain popularity in the tech community — not only for ethical and social reasons, but to ensure a more complete end product emerges from the AI processes.

The idea of fairness within AI comes from the idea that not all data is created equal, whether it’s measuring human populations or words in a legal document. If an AI algorithm is measuring the potential risk within a procurement contract, for example, the context matters, whether that contract is procuring coffee mugs or nuclear material. If it’s measuring whether a public economic policy is being applied equally across different races, it matters whether the population data is New York City or the rural Midwest. Fairness in AI means planning for these differences in data to make the end result representative of the goal that developers are actually trying to have the AI process tackle.

Sometimes, however, modern cost and time considerations can get in the way of fairness, says Cao (Danica) Xiao, vice president of machine learning and Natural language processing (NLP) at software company Relativity. Xiao came into the legal industry recently, but she previously spent time as an AI research leader in the healthcare and technology fields. When discussing what fairness means when it comes to legal AI development, Xiao draws a parallel to a healthcare development with which many are now familiar: the COVID-19 vaccine.

A December 2020 study from MIT revealed that despite the COVID-19 vaccine efficacy figures touted by providers Pfizer and Moderna, the true efficacy of the vaccines varied highly by race. The study measured the number of people whose cellular immune system was not predicted to robustly respond to the vaccine; and those figures varied wildly by race, from less than 0.5% of white clinical trial participants without a robust response up to nearly 10% of Asian participants.

The issue, Xiao says, is one of initial sampling. White populations tend to be overrepresented in vaccine and drug clinical trials due to a number of factors, including education and income level, proximity to news promoting the availability of trials, and sheer population size in the US. But many clinical trials, particularly for a vaccine as time-sensitive as COVID-19, tend to have one constraint that rules over all: the time it takes to recruit trial participants.

“So if we only want to minimize time, then the majority of cases, the majority of patients and people we recruit to the trial, they represent the majority group of the population,” Xiao explains. “That’s a fact that we cannot avoid.” As a result, the trial’s results will be skewed towards that overrepresented group.

Awareness of those differences can go a long way, however, whether in developing healthcare trials or creating representative data samples to run against an AI algorithm. That’s why, while Xiao concedes that she’s heard the legal industry is largely behind the healthcare industry in its adoption of AI technologies, she’s more interested in changing how legal organizations approach artificial intelligence before ever running a single algorithm.

Tools to lessen AI bias

Drawing from AI development in other industries, there are a number of fairness metrics that those data scientists exploring legal AI can take into account up front. A simple one is identifying subgroups early on to make sure there are representative populations of each type, be it demographic-centric subgroups such as race or gender, or contextual subgroups such as various types of matters across a firm.

A slightly more complex metric that Xiao points to is known as privacy-preserving federated learning — the idea that researchers should consider data sets from multiple locations, lessening the bias that occurs in each individual data set by combining them in a federated manner. “We train a local model from each location, but we don’t use the local model to represent the total behavior,” Xiao says. “We train a global model on top of the local model, and we will adjust the parameter of the model to make sure the final global model will consider each different heterogeneous pattern, and the web will be equally good for different populations.”

Fairness in AI means planning for differences in data to make the end result representative of the goal that developers are actually trying to have the AI process tackle. Sometime, however, modern cost and time considerations can get in the way of fairness.

Using data science techniques, there are also ways to amplify rare outcomes, which are crucial to find in healthcare and law alike. Or put a different way, if the purpose of a particular AI algorithm is to find a needle in a haystack, it’s important for the needle to stick out rather than be dismissed as noise. These rarities can also identify anomalies that are important to investigate further. The goal of rarities detection is “to amplify the pattern in those rare samples to amplify their voice, to boost their patterns, to make sure our final model will be able to capture those patterns and will learn the patterns in those data,” Xiao notes.

For legal organizations dipping their toes into AI for the first time, perhaps the most straightforward way to lessen bias in AI models is to make sure data sets are up to date. For example, if you are looking at a natural language processing test that links women to their profession and the training data comes from 20 or 30 years ago, professional titles for women may look a lot more different than they do today.

This is not only a question of fairness, Xiao says, but one of correct outputs. “If we only test the model against the old data, we might see lower accuracy,” she adds. “We need to consider those new trends and consider those new advancements and all those inclusion metrics in the model, and the model will be more and more accurate moving forward on the future data.”

As AI models become relied upon for more and more legal and professional work, particularly as technology’s capabilities for analyzing data and making predictions continue to grow, it’s crucial for the legal industry to adopt fairness methodology now and develop fairness metrics into AI development early.

“When we make a prediction, we need to consider this advanced context information to make sure the prediction is more accurate, but it will be a long process,” Xiao says. “We need to continue improving the solution.”

The continuation of the human species to thrive with clean air, land, and water in which to produce enough oxygen and food and ways to earn a living on the Earth is the main reason, of course. Indeed, the environment is the habitat that enables the survival of all living things.

Understanding all of the various pieces of the S can boiled down to various components, from product liability factors to workforce issues, community matters, and human rights.

Clarifying human rights

The link between business and human rights — defined in a 2017 NYU Stern Center for Business white paper as “the operational effects of a company on the labor and other human rights of the people and communities it touches” — is well established. In another white paper published by an ESG Working Group (on which the Thomson Reuters Foundation was a member), this foundation was underscored.

In fact, a multilateral approach to the link between business and human rights dates back a decade with the adoption of the United Nation’s Guiding Principles on Business and Human Rights in 2011, UN member states adopting the UN Sustainability Goals in 2015; and the establishment of the Corporate Human Rights Benchmark, which is a collaboration among investors and civil society organizations to create a public and performance benchmark of corporate human rights.

Since then, many countries and states have passed “transparency regulation”, such as the UK Modern Slavery of 2015, Australia’s Modern Slavery Act of 2018, and California’s Transparency in Supply Chain Act, to ensure that companies are not engaging in labor exploitation and forced labor within their own organization and that of their suppliers and vendors.

Part of the need for increased visibility of the social side of ESG is to bust the myth that it is not quantifiable. Matt Friedman, CEO of the Mekong Club, which is private sector-based membership organization dedicated to bringing about sustainable practices in the fight against modern slavery, encourages this myth-busting, suggesting two ways to quantify the social aspect of ESG, including:

• Conducting supply chain audits — Supply chains account for up to 40% of corporate ESG impacts, according to the ESG Working Group white paper that included analysis of 1,600 MSCI World Index companies. Friedman suggests companies give questionnaires to be collected during the procurement process from suppliers and vendors. These questionnaires can be analyzed and audited in order to identify potential incidents of modern slavery.
• Establishing grievance mechanisms — One of the newest ways companies are using technology is to use an app in creating their grievance mechanisms. For example, Friedman says that Mekong uses an app that allows auditors to ask workers on the factory floor (using a mobile device and headphones in their native language) a series of questions about potential exploitation, such as if there is indebtedness associated with the job, and whether or not there’s a modern slavery violation taking place.

Knowing where to start with DEI

When it comes to diversity, equity & inclusion (DEI) issues as part of the social metric disclosure, the first step is determining what parts of the S are material to each company’s various stakeholders, including shareholders, customers, employees, and residents of communities in which the company operates.

A common area for the S for any company is the internal representation at higher levels of those individuals with underrepresented identities or backgrounds. Indeed, at the start of the social journey for any company, it is important to understand the current status of representation of each level for each underrepresented identity, based on gender, LGBTQ+ status, race or ethnicity, disability, and veteran status, among others. In addition, knowing the timing around promotion and advancement and median pay for each underrepresented identity relative to the median timing and pay of comparable professionals are important to determine fair promotion and proper pay equity.

Capturing how companies improve social mobility and progress for employees and contractors is another area that impacts the S, but it can differ quite a bit depending on what is used as key performance indicators to measure impact. Luckily, there are companies tackling this challenge. Just Capital, for example, details corporate performance on a range of social, pay, and diversity issues, offering easy-to-use data and insights, according to the ESG Working Group’s white paper.

Too often social performance considerations have been dismissed as either immaterial or a lesser priority. However, numerous research efforts over the last decade suggest the opposite, including Stanford’s Social Innovation Review, a 2014 report that shows positive correlations between good environmental and social performance and overall financial returns within its equity portfolio for private and public companies; and McKinsey & Co.’s years-long research into ethnic and gender diversity that shows an increasing correlation between being in the top quartile for diversity and financial outperformance.

Further, regulators around the world are paying attention to the interplay between social considerations and financial risks. For example, the European Union (EU) introduced the concept of double materiality, stipulating that companies disclose the financial risks posed by social and environmental issues.

Luckily, many global companies, their suppliers, and vendors are not waiting around. “Factories in Asia see the writing on the wall,” Friedman says. “I had one factory person basically say that we understand that ESG is big for large companies.” So, to gain a competitive edge, many suppliers and vendors are gathering the necessary data in anticipation that the supply chain questionnaires are coming.

Join us on October 26 & 27 for Trust Conference, the Thomson Reuters Foundation’s annual event, dedicated to tackling critical issues at the intersection of socio-economic inclusion, sustainability, media freedom, and human rights.

Further, unemployment in the UK remains historically low, sitting at under 4% for all of 2022; however, economic uncertainty has increased in recent months and future prognostications seem a bit grim.

This combination of robust demand and low unemployment puts pressure on UK law firms to retain their lawyers, especially their associates, amid high competition for talent in the country and across Europe. Indeed, the flight risk of associates, the majority (60%) of whom classify themselves as senior associates, remains elevated at 37%, according to a recent pulse survey conducted by the Thomson Reuters Institute in July 2022. This measure of how many associate lawyers are contemplating leaving their current firm compares to a flight risk of 25% for mostly partners, according our stand-out lawyer research.

The Top 5 factors that are forcing these associates to consider moving on from their employers include:

1. 1. 1. 1. feeling under-appreciated (identified by 48% of associates as a key factor);
         2. the firm’s compensation system (45%);
         3. lack of career progression (38%);
         4. their current compensation (35%); and
         5. a lack of genuine regard for their well-being (25%).

What is interesting about the feedback from UK associates is that a higher concentration of lawyers indicated dissatisfaction on factors having to do with the law firm’s culture and career progression when compared to their peers in the United States and Canada. (See table below)

Flexibility cited as a major driver of satisfaction

The strong desire for flexibility — in terms of when, where, and how work gets done — dominated the feedback from associates as a top driver of satisfaction:

For example, when asked about what they like best about their current employer, 45% of associates who are consider flight risks cited “flexible work practices” as the top factor. Other often-cited factors include people/colleagues (25%); culture/environment (22%); and quality of work (21%).

Out of those associates who are most likely to stay at their firms, 65% cited flexible working as a main driver of their decision. Additionally, 62% of associates ranked “I am treated fairly” as a second most popular driver; and 57% indicated “I can be myself at work” as the third most popular one.

Conversely, the biggest gaps in drivers of satisfaction between associates who are likely to stay or leave their current firms revealed that law firm management, leaders, and fee-earning colleagues have some work to do. (See chart below)

Further, women associates have a greater flight risk than that of men, but only by four percentage points (36% to 32%). For the most part, the Top 3 drivers of satisfaction were consistent between the two, although those in the second and third spots for women were reversed for men.

Recommendations for action

Taking in all of this data, UK law firms should see the opportunity they have to double-down on what associates appreciate most about the firm, such as:

• • • Flexibility— Firms should continue to emphasize flexible working as part of their commitment to employee well-being. Associates, whether they indicated a likelihood to leave or stay, indicated that flexibility was a top driver of satisfaction.
    • Fair treatment — Continuing to provide a sense of fair treatment is a strength for firms according to associates feedback. Indeed, this is an area for law firms to tout in their efforts to retain associates.
    • ‘Being myself at work’ — Law firms are doing a decent job at providing an environment where associates feel they can “be myself at work.” Indeed, it was identified as Top 3 factor for men and women and a Top 2 driver among those who were likely to leave.

At the same time, law firms need to address the gaps in those areas that associates identified as ones of less-than-ideal satisfaction, especially when it comes to feelings of under-appreciation and a lack of career progression. Focusing on these areas will also help law firms to shrink the satisfaction gaps associates feel for law firm management, leaders, and fee-earning colleagues.

Indeed, showing appreciations or simply saying “Thank you” is one of the easiest ways to demonstrate to employees that they are valued. Even better, showing gratitude for associates’ contributions by local management, fee-earning colleagues, and leadership — areas which had the biggest gaps between in satisfaction among associates — would have a multiplier effect on retention by improving lawyers’ feelings of appreciation and their positive views on management, leadership, and partners.

Also, firms should work on expanding options for career advancement beyond the simple path to partnership by explaining and emphasizing the path to Of Counsel or other legal professional roles, or the possibility of reduced hours or part-time work. In addition, consistently asking questions like, “How can I support you in your career development?” or “What can I do to ensure you have a rewarding career here?” are easy ways for firm leaders to show they care about associates’ career progression.

These investments of time and energy will help UK-based law firms boost their retention of associates and contribute to lower attrition rates overall. At the current salary rate of six figures per associate, multiplied by the current rates of attrition experienced by many law firms, offering a simple “Thank you” and “Well done” are a pretty small outlay relative to the cost of losing key talent.

The issue of toxic behavior in law firms, tax & accounting firms, and corporations is a cause for concern among diversity, equity & inclusion (DEI) advocates and other professionals because it means that roughly one-third of employees within these organizations are experiencing a lack of inclusion and belonging.

However, some believe the current paradigm of DEI with its top-down approach and its priority on individuals with a single underrepresented identity will not adequately address this type of systemic exclusion, while others believe in an integrated strategy of all three components with an increased focused on belonging.

Problems with the current ways DEI is framed

Stephanie Felder, Director of Professional Development and Diversity at Groom Law, is a proponent of the combined approach. “I don’t think it’s quite that black & white as the need to focus on diversity versus belonging,” says Felder. “Both are important, but until you level the playing field and eliminate the exclusionary practices, processes, and systems within your organization, you can’t actually build diversity or belonging.”

Helen May, Director of Belonging@Work, is one of those who calls for an overhaul in assessing and addressing issues of belonging and inclusion based on the human experience. Organizations and human resources in the years leading up to the pandemic evolved to emerge as “bureaucratically diluted of the human element, including diversity and inclusion,” she explains, adding that the current DEI paradigm causes greater division because of the prevalence on setting and achieving targets and too much focus on “othering” large sets of people.

By focusing on a single underrepresented identity, many white men feel othered even as those with underrepresented identities already feel othered in the current environment. In addition, the current DEI approach does not sufficiently address intersectional needs of those with more than one underrepresented identity.

Another challenge concerning the current DEI paradigm is that it is driven mainly in a top-down manner rather than from the bottom upward though the organization. When approached primarily through a top-down perspective, the root causes of what is driving a sense of exclusion are difficult to identify, says May. Because a lack of belonging tends to stem from exclusive behaviors by individuals from both majority and minority groups, it is hard to work out exactly where within management the sources of the issues are occurring, she argues.

Pursuing inclusion through a belonging lens

May advocates for a revised approach to inclusion through the lens of belonging and well-being that uses human-focused questions as a starting point. These questions include:

• • • What is going to make people perform at their very best?
    • What is going to make everybody create that psychological safety they need?
    • What is going to protect well-being and foster a sense of belonging?

Working through the lens of belonging by default is intersectional because it is human-focused, she explains. “We live in a very intersectional world, and it disincentivizes people with other identities to participate, despite many efforts in the current DEI paradigm to invite ‘allies.’”

Using the belonging and inclusion lens, small networking groups within the overall firm or company are created as a safe place for people to have discussions that focus on people empowering themselves and empowering others. Curiosity is used to explore individuals’ unique qualities and experiences as a way of being within the organization and community that has a responsibility to protect the well-being of everyone, regardless of who they are or into what demographic they fit.

How to execute a belonging strategy

Using belonging and well-being as a fundamental context, May says organizations should start with a future vision of culture that defines a framework to attract the right sort of talent at the board level. Then, once the board is in place, it should then in turn focus on identifying individuals who display these culture framework attributes as part of the board’s succession plan. The board also needs to partner with future board members to outline how to empower employees based on activities and behaviors. Along the way, existing systems of promotion and performance evaluation are left alone.

To demonstrate the positive results from this approach, May describes how one client emerged through this process as an employee-owned business with a four-day work week and unlimited paid time off because it asked employees what they wanted. Those next-in-line for the board have evolved into a hub of the community rather than being seen at the top, directing down.

She says that a key part of the solution is to have first-line and middle managers appoint someone to ask the following questions “until it becomes a habit to ensure inclusion is weaved into every process, including performance evaluation, promotion, recruitment, training, and onboarding system.” These questions include:

• • • Who have we forgot to consider while we’re making this decision?
    • Who might we have disadvantaged with the action we’ve just decided upon?
    • Is there anybody else that we should ask about this decision who may be able to give us an alternative perspective?

The result allows law firms, tax & accounting firms, and corporations to build their culture through behavior and habit because people will start skewing their decisions in the in the right way by default without it having to be a formal process.

Indeed, a few men believe that DEI efforts at their firms and companies disadvantage them and voice some real concerns about it. To learn how best to respond to these concerns, the Thomson Reuters Institute consulted with its Equity, Diversity & Inclusion advisory board to gain the experience of members and learn their thoughts on effective responses.

3 ways to address concerns about specific initiatives being unfair

Employee resource groups (ERGs) and targeted leadership programs have been part of the DEI fabric for a while. In fact, ERGs started off being a group for support, networking, and mentoring; however, as the need for increased representation of diverse individuals at senior levels within organizations has expanded, there is a growing perception that ERGs are providing an advantage to under-represented talent.

Here are some of the best ways to respond to concerns around ERGs and other internal efforts that white men may see as more advantageous to minority talent:

1. Collect more information and listen for common ground — Seek to understand what men are perceiving as unfair by saying, “Tell me more about what you see as unfair…”

Then, perhaps explain to those concerned that some communities — such as first-gen college and law students — don’t have access to family and friend networks of white-collar professionals. Therefore, they have a need for mentors and sponsors who can help them navigate the unwritten rules and norms for success. And that’s why forward-thinking employers have put together targeted programs as part of their offer.

2. Point out that diverse talent is good for business — Explain to them that clients want diverse perspectives in their supply chain. There are hundreds of in-house counsel and corporate accounting and tax functions that are looking for diversity on the teams that staff their engagements because they see the value of having different perspectives — such as gaining new insights or avoiding blind spots. Failure to adhere to these requirements means that law and accounting firms run the risk of losing work, which hurts everyone.

In addition, all employees benefit from having diverse teammates, supervisors, and stakeholders because leaders are consistently working on and stress-testing key cross-cultural skills like cultural fluency, delivering and receiving feedback, effectively addressing conflict, and learning how to grow and support the development of diverse teams.

3. Make it personal about legacy — Ask those who have concerns, “Wouldn’t you want your daughter (or wife, mother, niece, or LGBTQ cousin) to be in an environment where their perspective is valued, and they can thrive?”

Then, emphasize that white men may also identify as members of under-represented or marginalized groups at times. All communities are multidimensional, including people with disabilities, veterans, first-gen college students, and LGBTQ+ individuals, among others. In this way, white men may be members of an under-represented group as well.

How to respond to concerns about lack of future job opportunities because of DEI

One of the default, yet problematic, criticisms around DEI is that it is a zero-sum game. While this is an alluring belief where someone wins and someone loses, it is exactly the opposite. If the organization is stronger and performs better, more opportunity is created for all. Here are a couple of ways to deal with this “zero sum” game mentality:

Use an analogy, such as the “curb-cut effect”  — Shane Lloyd, Head of Diversity, Inclusion & Belonging at Baker Tilly US, points out that one way to think about DEI efforts is with the example of installing curb-cuts on sidewalks to make it easier for people in wheelchairs to cross the street. Yet, it had unintended benefits for others, including people pushing strollers, cyclists, and people with temporary injuries.

Workplace DEI efforts similarly contribute to the curb-cut phenomenon by establishing policies that benefit a broader group. For example, while flexible work arrangements are typically considered women’s issue, men benefit from flexible work arrangements too, allowing them to balance the demands of caregiving or pursuing other interests outside of work.

Highlight what can be gained in terms of leadership — Explain how the most effective leaders are those who can lead diverse teams. Opportunities are expanded when this competency is demonstrated and consistently stress-tested. To lead and actively demonstrate respect from others who are different, it is imperative for leaders to hone these skills by working in normal and challenging conditions.

Today’s business environment requires leaders not only to run an effective operation but also speak to a broader set of issues. An organization with a strong DEI focus will provide opportunities to frame polarizing or highly political issues in a manner that allows for focus on how these dynamics impact people. Framing issues in this way allows leaders to develop an invaluable long-term skill.

In addition, as many companies invest in DEI, it becomes important that leaders have experience playing an active role in DEI efforts. Serving in a leadership role of an affinity group, working towards increasing representation for under-represented talent, or fostering an inclusive culture are competencies and skills that strengthen candidacy for promotion or stretch assignments.

In order for every individual within an organization to have a sense of belonging, to feel comfortable bringing their authentic selves to work, and to engage in friendly debate about work and other issues, everyone needs to be able to engage in healthy dialogue around different understandings and perspectives around DEI.

The workplace is one of the most meaningful environments in which people are engaging across differences. It is important to ensure leaders can enable all team members to have the skills to engage cross-culturally in order to help the business thrive and support an inclusive culture throughout the organization.

Guidance for employers

Hispanic and Latinx leaders continue to be underrepresented at the executive ranks within the accounting and legal industries. Collaboration with the National Association of Latino Professionals for America, which serves more than 100,000 professionals, and the Hispanic National Bar Association (HNBA) are helping employers make progress, but conversations with Hispanic executives suggest additional effort is necessary.

Compare your internal Hispanic/Latinx representation and that of your customer base — More than 18% of US consumers are from Hispanic backgrounds, according to the US census. Dumitrache Martinez, chief financial officer at Kind and Nature’s Bakery, advises corporations — particularly retail companies — to have similar ranges of representation between their Latino employees and their customers.

If there is a big gap between the countries and cultures from which your customers come and internal representation at the executive level, then there is some work to do. This gap, if left unaddressed, could impact business performance and how marketing messages are created and delivered to Hispanic customers based on different uses and habits, explains Martinez.

Formally sponsor Hispanic and Latinx talent — Intentional effort to develop executive talent from Hispanic and Latinx backgrounds is required by those organizations that have a very large majority presence in the executive suites. The careers of both Martinez and Gerardo Casahonda, Senior Director for International and Indirect Tax at Thomson Reuters, both benefitted from sponsorship by non-Hispanic executives. The HNBA’s PODER25, which seeks to increase the number of Hispanic attorneys occupying senior positions within corporate legal departments, is one example of the type of partnership in which employers can seek to partner with advocacy groups in this area.

Without intentionality, affinity bias, which causes people to gravitate toward others who appear to be like them, kicks in more often than not. Therefore, formally matching Hispanic and Latinx rising stars with executives for sponsorship helps to build bonds across differences that are not so obvious without a formal opportunity to forge a personal connection with someone from another function.

Invest in pools of talent from countries in Latin America — Casahonda indicates that the fact multiple activities of his business is done in Mexico and Costa Rica signals to employees that the company is vested in the development and advancement of talent in these locations and the communities in which these businesses operate.

Moreover, people in the US who work with people from other jurisdictions help to hone cross-cultural skills and develop future potential leaders. Indeed, all employees benefit from having diverse teammates, supervisors, and stakeholders because they are consistently working on and stress-testing key cross-cultural skills like cultural fluency, delivering and receiving feedback, effectively addressing conflict, and learning how to grow and support the development of diverse teams. These conditions are exceptional for building competent leaders of all backgrounds.

Train executives to embrace differing cultures — It is important for leaders and executives to signal proactively that different perspectives are appreciated. They can do this by proactively seeking the thoughts of others from underrepresented backgrounds. In fact, Casahonda says that individuals come to him for his views and insights because of his international work experience and his heritage outside of the US.

Advice for ambitious Latinx and Hispanic employees

In addition to investments made by employers, there are actions for both Hispanic/Latinx professionals. In fact, both Martinez and Casahonda share ways that they got ahead in their own experience and career journeys.

Hone cross-cultural leadership skills by working with others from different backgrounds — Martinez sought to work with a global company with locations in different countries to better expand his breadth of experience working with colleagues across regions. It forced him to work on his cross-cultural communication skills daily.

Improve mindset by reframing thought limitations on English as a second language — Casahonda says he once received feedback from a job interviewer that he needed to stop thinking that English was his second language. The interviewer emphasized that Casahonda should change his mindset and have confidence that he earned the interview because of his talent and be confident that his communication skills would improve over time.

Make ambitions known and seek feedback — One way to proactively communicate the desire to advance within an organization is to ask for management’s advice on what individuals need to do to get their moved up to other jobs. Casahonda sought guidance on how to get his manager’s job and followed the advice.

Of course, there is no magic formula to rise through the ranks of an organization today. It takes both the efforts of the individual and the guidance of mentors, sponsors, and managers in addition to organizational investments to advocate for rising stars and help them get the necessary experience and skills to advance. Employers taking these actions in combination with proactive action on the part of ambitious individuals increase the likelihood of improving representation of Hispanic/Latinx employees at the senior levels within the finance, accounting, and legal industries.

In a new blog series, Legal Talent Deep Dives, we will examine the data that points to several strategies that law firms can pursue to increase their bottom line

In today’s legal environment, as law firms try to move through the post-pandemic environment and navigate to something they see as closer to normal, the issue of legal talent remains a hot button topic for firms of all sizes.

Indeed, the number of lawyers considering leaving their current firm is eye-opening. Our research indicates that 21% of those lawyers (mostly partners) that have been nominated as stand-out lawyers by their clients, and 46% of associates are either unsure, somewhat likely, or highly likely to leave their current firm within the next two years.

Not surprisingly, when law firm managing partners get together, the talk is about why their lawyers are leaving — either to competitors, in-house positions, or most troubling, to no position or plan at all. These leaders also discuss how the time and process to replace lawyers that leave has become much longer, more expensive, and more complex.

What is becoming clear in this scenario is that law firms need to find a way to create workplace environments from which lawyers won’t want to leave — an increasingly complex endeavor, that involves addressing issues that are removed from the compensation picture altogether.

To help provide an answer to this dilemma, Thomson Reuters’ recent legal talent research illuminated several pathways that law firms can follow to arrive at a successful talent strategy in the post-pandemic era, including what can be done to retain their stand-out lawyers, and how a focus on engagement and culture — rather than just matching compensation — can make a great deal of difference in firms’ retention efforts.

Our Stellar Performance market research study took an in-depth look at more than 2,400 stand-out lawyers — those nominated as such by clients in Thomson Reuters’ ongoing, randomly sampled global Sharplegal survey — and what can push them to leave their current firms and what can be done about it. Previously in this series, we saw how having just three stand-out lawyers on a firm’s roster can make a great deal of difference to clients and can lead to a four-fold increase in the portion of clients’ legal spend the firm might gain; and what stand-out lawyers see as value within themselves. Now, we turn our attention to the part of our research that detailed how lawyer retention strategies are becoming a much bigger piece of law firms’ profitability puzzle.

Strategies to retain the best lawyers in your firm

During this time of stiff competition for in-demand legal talent, it is more important than ever for firms to guard against high lawyer turnover. Our research underscores the fact that associates are at especially high flight risk right now; and while they themselves told us that compensation is their main concern, our research shows that a host of other factors also contribute to better associate retention. Indeed, these factors are typically cultural, such as flexible working schedules, better communication and engagement, and support for mental well-being — all of which were impacted by the pandemic’s forced pivot to remote working.

For example, remote work meant that mentoring had to be addressed differently and became much more challenging. Without the chance for partners to more regularly have those difficult questions and conversations that can help shape a younger lawyer’s career, law firm leaders had to struggle to sell the idea of becoming a partner more than ever before. There may be two main reasons for this. First, given the lessons of the pandemic, many lawyers (of all ages and status) are more circumspect in how they spend their working hours, whether they’re willing to endure long commutes, and how they balance their work with their life outside of work. And second, the rise and growing reputation of new roles within many law firms involving technology, legal operations, talent management, and more have offered side steps off the partnership ladder that now also can provide different kinds of rewards and recognition.

The power of firm culture

As we looked more widely at stand-out lawyer retention in our research, it appears that many law firms overlook the role their own leadership and strategy-setting plays in either pushing lawyers away or keeping them within their firms. Firms need to genuinely engage and communicate with lawyers at all levels to ensure firms don’t leak great talent.

As the research shows, those lawyers that regarded themselves as most satisfied in their current roles at the firm felt that cultural issues were much more important than did those lawyers who considered themselves least satisfied with their jobs. In fact, the most satisfied lawyers cited people and colleagues, workplace culture, and the quality of work they’re given as the top three areas that give them the most satisfaction.

Least satisfied lawyers, on the other hand, cited people and colleagues, independence or freedom, flexibility, and quality of their team or practice as top areas of satisfaction.

Building toward an inclusive culture

Given that firms’ efforts toward creating this more accommodating work culture for their lawyers can pay dividends in retention and — just as importantly — curb the hiring cost of recruiting, hiring, and on-boarding new talent, the key question becomes one of how can firms create an atmosphere in which their top lawyers want to remain?

Focusing on several aspects of culture — such as enhancing the overall tenor of working life, making all lawyers feel included and visible, and ensuring that all lawyers and staff are being treated in a manner that’s friendly and respectful — is a great place to begin. Couple that effort with clearly articulated opportunities for career progression, advancement, and professional growth, and firms will have significantly contributed to higher employee engagement among stand-out lawyers and others.

These efforts will require, of course, a dedicated initiative that enlists management, offers management training, and instills more flexibility than firms may be used to offering. However, firms must ensure these foundations are in place to maintain an engaged workforce and defend against other firms poaching their stand-out talent. Indeed, our findings indicate that, almost one-half of lateral moves of top lawyers are instigated by the hiring firm — and this figure is even higher among recruits who were not actively considering a move.

Today, no law firm can pursue strategies to enhance profitability or ensure stability if they do not have a strategy in place to retain their best lawyers and avoid the cost and disruption of new hires and constant turnover. Keeping their best lawyers satisfied and engaged within a welcoming workplace culture is the surest way law firms can keep that talent at the firm.

You can learn more about how your firm can better understand the value of its stand-out lawyers as part of its overall talent and client service strategies, here.