In the past two years, many law departments have intensified their efforts at holding their law firms accountable for making progress on diversity, equitability, and inclusion (DEI). These efforts include establishing formal DEI programs, and many law departments now regularly gather their law firms’ diversity data, if not quarterly, then annually. However, there are important nuances in collecting and analysing DEI data. To move beyond “check-the-box” initiatives and reliance on metrics that paint an unrealistically rosy picture of progress, we need to explore the issues and challenges around which data to collect, why, what to do with that information, and how to leverage it in our efforts to make a difference.

No two companies are the same, and there is no one-size-fits-all approach to an outside counsel DEI program. Real results require taking into account the resources available to a law department, its DEI goals, the number of law firms it has, its ability to collect and analyse data, and its commitment to a long-term strategy. Any law department launching a new outside counsel DEI program, or seeking to evolve an existing one, should first answer five questions involving diversity data. These questions form a good starting point for thinking through how to tackle significant challenges faced by every DEI program; the answers will help clarify the appropriate actions for a law department to take to make meaningful progress:

How should we collect our law firm's diversity data? 

Painting a complete picture of a law firm’s DEI efforts and successes requires an array of data points. Obtaining the most meaningful types of information (concerning, for example, professional development activities, billing credit, committee membership, mentoring program effectiveness, etc.) means collecting more data. Law departments currently use several methods – eBilling software, enterprise legal management systems, third-parties’ DEI data collection and reporting tools, and even home-grown approaches. The best practice is for a law firm to use the client’s preferred tool, whatever that may be, rather than providing all clients with the same data in a single format. That said, it is critical to make it as easy – or at least as straightforward – as possible for law firms to gather and furnish fulsome data sets. When collection methods are complicated or confusing, data accuracy suffers.

Are we collecting the right data? 

Law departments have yet to standardise the diversity data collected from law firms, and various KPIs and metrics can measure DEI progress. Nevertheless, law department leaders understand that the type of data collected matters when measuring a firm’s DEI progress (or lack thereof). Basic demographic data – on, for example, the composition of timekeepers and within a firm’s practice groups, or a firm’s hiring, promotion, and attrition rates – are relatively easy to collect. While this information helps a law department begin to get a sense of how a firm is doing on DEI, it provides an incomplete picture and, at worst, a misleading one.

Moreover, relying on simplistic categorisations and yes-or-no questions has limited value. Too often, it leads to check-the-box initiatives that give the appearance of progress but don’t solve the long-term challenges. Law departments must have their firms dig deeper and furnish data about mentoring programs, timekeepers’ professional development, client interaction, and billing/working credit. Information on these sorts of items enables a law department to delve into important issues around what firms are doing to develop diverse lawyers and the opportunities those lawyers are getting.

How do we analyse what we’ve collected? 

People often misunderstand DEI as a straightforward, self-contained problem that, once solved, stays solved. In reality, DEI is a set of complex challenges that evolve and interact with each other. Making progress requires applying the proper analysis. It is easy to put DEI data into an Excel spreadsheet and generate pivot tables – but good luck getting actionable insights from such a simplistic approach. If you want to use data to figure out how best to proceed, you need to develop sophisticated analytics that reveal significant trends. Data visualisation is especially helpful in seeing an organisation’s DEI story because it makes diversity data easier to understand and reveals current and emerging patterns and trends.

How should we message our expectations with our law firms? 

Driving DEI progress with outside law firms is as much a matter of persuasion and relationship management as achieving specific targets. The foundation for success is for a law department to begin by articulating its values to its law firms. One key message is that everyone benefits from greater numbers of diverse Associates doing well, progressing in their careers, and serving clients. The next step is to be upfront about holding firms accountable for making progress. But before imposing targets, a law department should clarify the current state of DEI at the firm in question. Only after establishing the baseline should a law department specify the milestones ahead. Making headway requires regular discussions between law firm leaders and in-house lawyers who manage outside counsel relationships – to look at data, assess progress, and figure out what’s working well and what requires improvement. When law departments partner with their firms, collaborate on goals, and provide support for law firm DEI programs, progress occurs.

How do we set future goals? 

Future goals should be incremental, realistic, and achievable. Because DEI is an evolving challenge, a law department should set short- and long-term goals. And because DEI challenges evolve, goals should evolve to take into account new developments and new information about what is and is not working. Multiple rounds of data collection can serve as a feedback loop, revealing patterns that help focus and adjust DEI strategy and goals. For example, over time, attrition data may uncover that a firm tends to lose diverse Associates during a particular stage in their careers. This sort of finding can spur designing and implementing an initiative whereby a law firm and its law department client partner concentrate on remedying the problem.

The lack of diversity in legal has existed for decades and will not disappear quickly. Progress requires commitment, sustained energy, and a willingness to evolve DEI efforts over time. Both law departments and law firms should view DEI efforts as a multi-pronged, multi-year, collaborative endeavour. By themselves, data collection and analysis aren’t enough to achieve DEI goals – but they are indispensable to identifying the root problems; facilitating honest, reality-based discussions; and creating and implementing impactful solutions.