• Blog

2020 Equity Project Study: New research on how GCs use their power of the purse to close the gender gap in law

Given the intensity of issues facing all businesses today, it’s an understandable impulse to deprioritize non-essential initiatives. But for law firms, gender diversity should remain a priority, as new research suggests. The 2020 Equity Project Study, a report based on 77 interviews with general counsel and other senior in-house lawyers at companies with a median revenue of $8 billion, reveals that many clients say having diverse outside counsel is more important than ever—because it is good for business.

The gender gap in law has been widely publicized for many years, yet despite some marked improvements the pace of change remains frustratingly slow. It’s clear that many clients are aware of their potential to drive change: Indeed, in January 2019, more than 170 US general counsel and corporate legal officers signed an open letter to big law firms, lamenting new partner classes that “remain largely male and largely white”, and implying that failure to address this problem would result in a loss of business.

However, it is less clear whether and how law firm clients are leveraging their significant economic clout. Companies that hire law firms to represent them have a significant role to play in bringing about change. By exercising their considerable “power of the purse”, clients can incentivize law firms to promote more women to leadership positions. The 2020 Equity Project Study seeks to understand how companies are exercising their influence in practice. The research found:

  • GCs and senior in-house lawyers recognize the business case for having a diverse team of external counsel
  • Many say they routinely make decisions based on diversity
  • 52% are unaware of how origination credit is awarded by the law firms they hire
  • 80% say their companies lack formal policies to ensure that the law firms they hire are gender diverse
  • 60% attribute the persistent gender gap in law to external obstacles such as bias, historical inertia, law firm culture and work-life balance
  • 48% say their companies have asked their law firm to put a woman on a litigation or arbitration team
  • 21% say that women litigators’ work is more efficient than that of men based on factors such as speed to resolution and/or cost management
  • 55% say that knowing about The Equity Project will change the way they think about or prepare for future affirmative litigation

Ultimately, GCs support gender diversity, recognize the business case for having a diverse team of external counsel and are ready to do their part but rightfully regard real progress as a matter requiring collaboration. Savvy law firms will take note of the ideas that their clients have for closing the gender gap in law and be prepared for clients to utilize non-traditional tools and economic incentives like The Equity Project to drive change.

Download the 2020 Equity Project study: General counsel and the gender gap in law