Key takeaways: What’s driving the commercial dispute leadership diversity gap and how to address it

Companies value diversity and expect it from their law firm partners

New research shows that while companies both value and expect diversity from their law firms, only 44% of in-house lawyers consistently apply these expectations to the leadership of their commercial disputes. Senior in-house lawyers say key obstacles to achieving diversity include a lack of existing relationships and familiarity with diverse outside counsel. Senior in-house lawyers also express a need to receive recommendations of female and racially diverse litigation and arbitration lawyers from trusted sources, such as law firms. Given this, law firms have a role in helping clients close the diversity gap by offering talented and diverse teams for representation in commercial disputes.

Formal approaches to diversity requirements for disputes

While many in-house lawyers believe that diverse litigation teams provide an advantage in court, just 23% say they have directly asked a law firm to put a woman or racially diverse lawyer on a litigation or arbitration matter. The research showed that while some in-house lawyers felt a diverse team gave them an advantage in court, particularly in jury trials, many also expressed a reluctance to take on new and unfamiliar counsel for bet-the-company disputes. As Amy Sellars put it during the webcast: “Especially on the larger, more important cases, there is a sense from the internal litigators that this is not the matter where we're going to be focused on diversity, we're going to be focused on outcomes because we're in front of a board and we're accountable.” But while it can be challenging to start the conversation in high-profile cases, law firms and clients can nonetheless ensure that female and racially diverse lawyers gain experience in second chair roles or in other matters.

A formal process with consistent evaluation and methodology can be important to address biases and achieve better results. The panelists all raised the importance of fostering diverse talent in lower risk cases in the first instance, so that when bigger more important matters come along, in-house counsel can safely vouch for those individuals to be a part of the team. Building trust and developing relationships with diverse attorneys in lower-stakes cases can be a way to promote diversity and create a network for future opportunities.

Networks in the legal profession

Research shows that a lack of networks is a major barrier for in-house lawyers when appointing diverse litigation and arbitration counsel, which can be addressed if trusted sources referred diverse litigators to them. Networks and social capital in the legal profession are important, particularly as it lends to the comfort and credibility that comes from knowing and working with familiar trial lawyers. There is a need for an easier way to access diverse trial lawyers beyond traditional directories and recommendations.

One way of developing organic relationships and networks is for senior partners to bring junior lawyers to client meetings and calls. Training and preparation are crucial for giving opportunities to junior lawyers, such as speaking on panels or participating in RFP pitches. It’s essential to a developing lawyer’s career to cultivate comfort interacting with clients, as it can be challenging to expect them to navigate high-stakes meetings without prior experience.

Additionally, mentorship programs play a crucial role in promoting diversity and inclusion within law firms. These programs can facilitate the building of bridges between law firms, staff, and clients, allowing for the development of relationships and the exchange of career advice. Mentorship programs help broaden networks and provide opportunities for collaboration and introductions. It is important for mentorship relationships to be a two-way street and to expand beyond one-on-one interactions to include the mentor's network and the mentee's network.

The Equity Project as a tool for promoting diversity

Burford is committed to promoting diversity in the business of law with The Equity Project. With earmarked funds for litigation and arbitration led by historically underrepresented lawyers, The Equity Project provides economic incentive for companies and law firms to advance diversity initiatives and help move the needle in the business of law. Since launching The Equity Project in 2018, Burford has committed a cumulative $145 million to finance commercial litigation and arbitration led by women and racially diverse attorneys.

Companies can utilize Equity Project funds to help promote diversity initiatives, advance diversity goals through their legal spend and use the Equity Project to start the conversation with their law firm partners about diverse representation. Law firms can use Equity Project capital to encourage female and racially diverse litigators to take on matters that require significant investment, demonstrate innovation in winning new business and help ease pathways towards allocating origination credit for lawyers who have often been underrepresented at the leadership levels of law firms.

Matters that meet Burford’s investment criteria qualify for Equity Project funding if one of the following criteria is met: a female or racially diverse litigator serves as first or second chair, majority ownership of the firm is by a female or racially diverse lawyer, a female or racially diverse litigator receives origination credit for the matter, a female or racially diverse partner serves as a chair of a plaintiff's steering committee or lead counsel, or a female or racially diverse barrister leads the advocacy on the matter.

Download the research to learn more.