The Case for Data-Driven Supplier Diversity in the Legal Industry

Law firms have long recognized the importance and benefits of diversity in their recruiting and retention policies. In the corporate world, Diversity, Equity, Inclusion & Belonging (DEIB) initiatives extend beyond employees to embrace and emphasize the importance of supplier diversity in their overall strategic plan. While some leaders have incorporated supplier diversity into their DEIB goals and objectives, the legal industry has been slow to adopt effective supplier diversity programs into their budgets, causing firms to miss out on critical opportunities on various fronts.

What is Supplier Diversity?

Supplier diversity is ideally a firm-wide strategic initiative to provide diverse-owned businesses access to participating in institutional spend. Through various means, it recruits and promotes suppliers that are minority-owned, women-owned, veteran-owned, LGBT-owned, service-disabled veteran-owned, and other historically underutilized businesses, including small business vendors. In the legal industry, this access includes the opportunity to become known, liked, and trusted with mission-critical activities. Supplier diversity encourages firms to consider opening themselves to putting diverse suppliers in a position to compete for business by demonstrating their ability to meet and exceed their competition.

Supplier Diversity Rounds Out a Commitment to DEIB

As professional service providers, the legal industry can engender its DEIB commitment on three fronts: (i) recruitment and retention, (ii) community involvement, and (iii) supplier diversity. Most major firms participate in the National Association for Law Placement (NALP) collection of statistics, which tracks the diversity among attorneys at the firm. Community involvement often comes in the form of pro bono programs and support for affinity bar associations and other sponsorship activities. Missing or underemphasized are supplier diversity programs. To truly incorporate DEIB, this third prong is necessary for an industry where a firm’s annual income can reach billions of USD.

Supplier Diversity Positions Firms as Tier One Suppliers to Corporations

The supply chain is not one link, and corporate supplier diversity initiatives recognize the limits to seeking solely direct supplier relationships in promoting diversity. Instead, most corporate supplier diversity programs will look favorably on a direct supplier who can demonstrate that they are participating in a supply chain where diverse-owned businesses are given opportunities. The percentage of spend has a vital role to play, and direct suppliers like law firms that cannot qualify as diverse owned themselves can benefit from preferential supplier practices if they have the data to demonstrate that they engage in meaningful supplier diversity.

Firm Commitment to Its Supplier Diversity Addresses Unique Legal Industry Issue

While many corporations have made an institutional commitment to supplier diversity, incorporation of their corporate counsel department has been slower to achieve. The legal industry has tended to analyze its diversity strictly regarding its attorneys. Recently, Coca-Cola attempted a radical increase in the diversity demands of its supplier firms, and it was met with pushback from its shareholders due to a perceived potential risk of discrimination claims. While no other corporate counsel has revisited or revised their supplier diversity programs as a result, a supplier-diversity lens that includes attention to other tiers that the firms utilize in supplying their services offers a solution to this possible issue.

Facilitates Other DEIB Initiatives

In a competitive market for top talent, the emphasis on DEIB is an additional powerful recruiting tool. Law students and attorneys considering a lateral move have demonstrated a consistent interest in the DEIB practices of the prospective firm. A DEIB program that includes a data-driven supplier diversity component can provide concrete evidence of a meaningful adherence to a firm’s DEIB commitment.

Supplier Diversity is Data-Driven

For many firms, there may already be significant supplier diversity spending. It may not be recognized due to a lack of systematic reporting and tracking. The procurement process in many firms is siloed by practice, group, or even individual attorneys. As such, the statistics of supplier diversity are neither collected nor leveraged. A program, under the auspices of a management-level firm leader, with full management buy-in can lead to the collection of information about the existing diverse-owned businesses in the firm’s supply chain and create an institutional environment that encourages awareness and participation in this important DEIB initiative.

At Laisar, we partner with firms to analyze their supplier diversity efforts, assess the effectiveness of the existing program, and provide a structured, quantifiable reporting mechanism that allows firms to truly engage in supplier diversity.

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AmEx Coca-Cola —

AmEx article —

HBR — Structural vs. Superficial

By Florence Amate published on Medium on December 14, 2022, 5mn read.

Photos: iStock Images.


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