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Law360's Diversity Snapshot: How Firms Stack Up

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Law360

By Gerald Schifman

Law firms have made incremental progress toward diversifying their attorney ranks. Overall, attorneys of color represented 19.6% of firm headcounts in 2021, an increase of 1.5 percentage points. While that increase is modest, it's the largest on record in Law360's annual law firm survey.

Yet many firms are behind on their diversity, equity and inclusion goals. This raises an important question for firms to grapple with: How does the diversity in their headcounts compare with what it could be, based on the potential marketplace of new hires?

Law360 aimed to answer this question by creating new pipeline scores for the 2022 Diversity Snapshot. The breakdowns of firms' headcounts by race and ethnicity were compared against a set of benchmarks, which were based on the talent pool from lower levels of the attorney hierarchy. This method accounts for how diversity rates tend to decrease at each successive level of the lawyer career ladder, even as attorneys of color make their way through the pipeline.

As was the case last year, Law360 used both our own historical surveys and data from the American Bar Association to create a pipeline score for firms based on their representation of equity partners, nonequity partners and associates. This year's pipeline score also adds in an assessment of firms' counsel and staff attorneys.

The pipeline scores measure the percentage points above or below Law360's benchmarks, which are outlined further in the methodology section below. Scores vary with the given firm's headcount and demographic breakdown at each attorney tier. Firms were ranked within one of four headcount groups so they could be compared with peers of a similar size. A total of 291 firms were evaluated in this edition.

How Do Firms Measure Up?

The top firms in each size category are shown with their pipeline score, as well as their portion of minority attorneys at different levels.

Diversity Snapshot

Just 16.5% of firms exceed Law360's benchmarks, a total in line with last year's mark. More than one-fifth of firms, while missing the benchmarks, came within five percentage points of their individualized target. That range is home to the five largest qualifying firms, as Kirkland & Ellis LLP, Latham & Watkins LLP, Greenberg Traurig LLP, Morgan Lewis & Bockius LLP and Sidley Austin LLP all sit a few points behind the benchmarks.

The majority of firms have not kept pace with the wave of candidates who could advance to the next level. Nearly half of the responding firms scored between five and 15 points below the benchmarks. Additionally, approximately 15% of firms registered scores that were more than 15 points away from the target thresholds.

Morrison Foerster LLP once again led all firms with at least 601 attorneys. In topping the benchmarks by 4.1 points, the firm edged out Wilson Sonsini Goodrich & Rosati PC, Willkie Farr & Gallagher LLP and Cooley LLP by slim margins. These four firms were joined by just 10 more of their peers in recording positive scores.

Berry Appleman & Leiden LLP ranked first among firms with 251–600 attorneys. The immigration-focused firm scored a substantial 26.6 points above the benchmarks, reporting the highest diversity rates for equity partners, associates and other attorneys in this size group. Second-ranking Fragomen, Del Ray, Bernsen & Loewy LLP was the only firm of at least 500 attorneys to exceed the benchmarks by more than 10 points. Cleary Gottlieb Steen & Hamilton LLP placed third in this size category, eclipsing Law360's thresholds by 5.4 points.

Kubicki Draper outpaced the benchmarks by 13.3 points and took the No. 1 spot among firms with 101–250 attorneys. More than half of the defense litigation firm's associates identified as a person of color. Atkinson Andelson Loya Ruud & Romo PLC and Lozano Smith placed second and third, respectively, in this ranking, as the two led their peers in diverse equity partner percentage. While this size category had the most participants (96), only 12 of those firms exceeded the benchmarks.

Among small firms of 100 attorneys or fewer, the top three were repeats from last year. Diaz Reus LLP once again led all firms in the group, this time emerging ahead of the benchmarks by 34.9 points. Roig Lawyers was a close second, and is the only firm in the report to have at least 50% of its attorneys at all four levels identifying as people of color. Meanwhile, at No. 3, Zuber Lawler & Del Duca LLP continues to surpass Law360's attorney demographics benchmarks by considerable margins.

For firms of all sizes, their pipeline scores represent an assessment of their overall headcount rather than a full encapsulation of their efforts on diversity, equity and inclusion. The racial and ethnic breakdown of key seats at law firms, such as practice area leadership and the management committee, are omitted from this ranking. These areas of firm diversity are assessed in Law360's Social Impact Leaders, a new version of which will be released in the coming months.

Law360's pipeline scoring system still has other caveats. Prospective hires from lateral positions, the government sector and other private enterprises aren't considered. Additionally, the benchmarks used in this piece could be higher if not for persistent structural biases affecting the legal industry. Black and Latino students often confront greater impediments to entering and succeeding in the legal industry. Students who overcome these trials frequently encounter less mentorship and fewer opportunities to cultivate experience at their firms.

The new Diversity Snapshot ranking is further evidence that many firms are trailing behind expectations for their diversity. But the fact that 48 firms of varying sizes and strengths were able to post positive pipeline scores is a reason for optimism. A more equitable racial and ethnic breakdown is an achievable goal for firms that are determined to make progress every year.

--Editing by Kerry Benn, Pamela Wilkinson and John Campbell. Graphics by Rachel Reimer.

Methodology

First, to evaluate firms at the associate level, Law360 Pulse computed the 2013–2020 portion of minority juris doctor degree recipients from all law schools accredited by the American Bar Association. That figure amounted to 29.5% when non-U.S. residents were omitted. The eight-year window accounts for the fact that attorneys often work as associates for quite a few years.

To gauge firms' representation of nonequity partners, Law360 compared firms' 2021 percentage of minority nonequity partners to the percentage of minority associates and other attorneys reported by all firms from our 2018-2020 headcount survey submissions. This benchmark comes out to 22.9%.

Then, firms' minority equity partner representation was assessed against the aggregated rate of minority associates, other attorneys and nonequity partners across the same three years of survey data. That benchmark is tallied at 20.7%. Nonequity partners are included here because that role can be a steppingstone to the equity tier.

The benchmark for other attorneys — a group that's generally composed of counsel and staff attorneys — is computed as the harmonic mean of the three previous values. This figure comes out to 23.8%.

Two-tier firms that didn't split up their partner data at the equity and nonequity level were evaluated differently. The diversity rate for their total partners was evaluated against a composite version of the equity and nonequity benchmarks, which was based on the average industrywide split among attorneys across the two levels. This total partner benchmark amounted to 21.7%.

Benchmarks were subtracted from the rate of minority attorneys at each level. The differentials were then added for all applicable categories, with each level weighted by its proportion of the firm's total attorneys. Calculations and rankings use unrounded numbers.

To pose an example of the calculation, say that a firm's attorneys are split in even thirds across the equity partner, associate and other attorney tiers. Suppose also that one-quarter of attorneys at each level identify as people of color. The firm would be 4.3 points ahead of the equity partner benchmark, 4.5 points behind the associate benchmark, and 1.2 points above the other attorney benchmark. Each differential is weighted equally, bringing the firm's compiled score to +0.3.

Firms that elected not to provide a racial and ethnic breakdown for their U.S. attorney headcounts were ineligible for the Diversity Snapshot. All data shown uses firm headcounts as of Dec. 31, 2021. More details about data definitions are available here.

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