Nearly one in four general counsel have directly asked a law firm to put a woman or racially diverse lawyer on a litigation or arbitration matter, new research has found.
A common reason for not doing this was that in-house lawyers felt uncomfortable dictating to law firms how they made up their teams.
But most do not impose formal gender or racial diversity requirements on the law firms they instruct in litigation or arbitration, with nearly half citing a lack of relationships with diverse external counsel in their networks as an obstacle to appointing more representative teams.
The report for litigation funder Burford Capital, What’s driving the commercial disputes leadership diversity gap?, was based on 66 in-depth interviews with GCs, heads of litigation and senior in-house lawyers in the US, Europe, Asia and Australia.
Many in-house lawyers said they informally asked their law firms to support their commitments to diversity, while 44% applied formal requirements for gender or racial diversity to the law firm teams that represented them.
One associate GC said: “We have emphasised the importance of, and our commitment to, diversity but we have not mandated this issue.”
An in-house lawyer at a consulting firm said the question of who should lead in litigation or arbitration was normally decided by the law firm. “We prefer not to manage the law firm.”
However, another associate GC commented: “We have removed a firm from our panel of providers for a lack of diversity in these matters.”
Three-quarters of senior in-house lawyers believed there were “significant obstacles” to achieving diversity in high-stakes disputes.
“A commonly cited hurdle is that senior in-house lawyers are comfortable with existing relationships and are reluctant to work with unfamiliar counsel, which is perceived to add risk.”
Nearly half of in-house lawyers (47%) cited lack of relationships with diverse external counsel in their networks as an obstacle to appointing more diverse litigation teams, while some said the availability of diverse lawyers with trial leadership experience was a significant issue.
A GC at a chemical company commented: “People seek lawyers with a reputation in high-stakes litigation, which makes it more difficult for those who have not had the opportunity in the past to break in.”
A deputy GC at a tech firm said: “In-house counsel are risk averse so they work with people they know. It is perceived as risky to send a matter to someone with whom you have not worked.
“There is no reward internally for bringing in a diverse practitioner unless you have established it as a goal in the department. It is all about incentives.”
Three-quarters of GCs said they would benefit from being exposed to recommended female and racially diverse litigation and arbitration lawyers from a “trusted source”, such as a law firm.
“Many senior in-house lawyers say that they would most prefer that the firms with which they already work offer them teams that are diverse and equipped to represent them effectively.”
A GC at a software company said: “What would help me is if I already work with a firm and then learn that they have a talented diverse team.”
Aviva Will, co-chief operating officer of Burford Capital, commented: “As the purchasers of legal services, legal departments can – and should – have a significant impact on promoting diverse leadership of commercial disputes, which remains persistently lacking.”
Ms Will said Burford had committed more than $137m through its Equity Project to fund commercial litigation and arbitration led by female and racially diverse lawyers.