Will Diversity Rankings for Law Firms Become Self-Fulfilling Prophecies?
An article in the NY Times earlier this week reported on an effort by faculty and students at Stanford Law School to rate large law firms in major legal markets on the basis of the number of female, black, Latino, Asian, and out LGBT partners and associates. Using data provided by the firms, the project assigns scores in individual categories and composite scores, with the evident aim of pressuring firms to increase the numbers of members of the listed groups among their ranks. As the article notes, quoting Hastings Law Professor (and my fellow FindLaw columnist) Vik Amar, given that governing law requires something almost approaching colorblindness (and the related blindnesses associated with the other groups) there is a distinct possibility that by succumbing to this pressure firms would be acting illegally. I make this observation as a descriptive matter, without taking a position on whether aggressive private sector affirmative action along these various dimensions should be deemed illegal. As a matter of positive law, much depends on whether the Supreme Court would be inclined to cut back on the scope of permissible affirmative action in the private sector. For now, at least, firms would probably be permitted to consider these various factors at least to some extent when making hiring and partnership decisions.
Here I want to make a different point, however: the effort may prove counterproductive for the least diverse firms. Suppose you are the hiring partner at a firm that gets an F on one or more diversity measures. You worry that this will hurt your recruiting and may even hurt you with clients, since one tactic described in the article is to alert Fortune 500 companies of the diversity performances of the various firms. So, you resolve to hire more X's, Y's and Z's. Meanwhile, however, with all the added attention being paid to diversity, your competitors with better numbers are also resolving to hire more X's, Y's and Z's, and those competitors have a strategic advantage. They can say to recruits "come here and you'll feel welcome, whereas if you go to [the firm that got the F], you'll be marginalized." To be sure, a very aggressive effort by an otherwise good but not-very-diverse firm could pay off, but on average, the efforts of the already-diverse firms are likely to be most successful. Expanding the pool overall would certainly help, but to the extent that the Stanford project grades on a curve, the curve will tend to be self-reinforcing.
Posted by Mike Dorf
Here I want to make a different point, however: the effort may prove counterproductive for the least diverse firms. Suppose you are the hiring partner at a firm that gets an F on one or more diversity measures. You worry that this will hurt your recruiting and may even hurt you with clients, since one tactic described in the article is to alert Fortune 500 companies of the diversity performances of the various firms. So, you resolve to hire more X's, Y's and Z's. Meanwhile, however, with all the added attention being paid to diversity, your competitors with better numbers are also resolving to hire more X's, Y's and Z's, and those competitors have a strategic advantage. They can say to recruits "come here and you'll feel welcome, whereas if you go to [the firm that got the F], you'll be marginalized." To be sure, a very aggressive effort by an otherwise good but not-very-diverse firm could pay off, but on average, the efforts of the already-diverse firms are likely to be most successful. Expanding the pool overall would certainly help, but to the extent that the Stanford project grades on a curve, the curve will tend to be self-reinforcing.
Posted by Mike Dorf
posted by Michael C. Dorf @ 9:30 AM
5 Comments:
At 12:21 PM,
Paul said…
Multiple things stuck out to me in the article. Here are a few:
“Firms that want the best students will be forced to respond to the market pressures that we’re creating,” said Andrew Bruck, a law student at Stanford and a leader of the project.
My comment here is short. I think Bruck may be failing to understand market pressures. I suspect (like most forms of affirmative action) he will do more harm than good to his cause.
This one, however, was really striking:
Those numbers are “a bit of a canary in the coal mine,” said Deborah L. Rhode, another Stanford law professor. “The absence of women as partners often says something about how firms deal with work-family issues.”
The thing I like most about this quote is that is expresses acceptance or even affirmation for traditional family roles (where the woman is expected to be the primary care giver) but expresses disappointment that firms are not bringing on more women as partners in spite of the considerable disparity in value to the firm.
To the extent there is a problem, the problem is that women are expected to sacrifice their careers for their family. Law firms (and other businesses) *should* mike hiring and partnership decisions on productivity and value added. Concurrently, families with children are an important part of our society. The "solution" (again, assuming you see a problem in the first place) is not to preferentially hire and promote using inefficient personnel strategies. The solution is to change societal norms such that on average (at least for the segment of the population we label "professionals") males are spending as much "time at home" as females. The blunt tool of affirmative action is no way to go about effectuating this change.
At 4:32 PM,
Paul said…
BTW, FWIIW, I think whether or not the grading system is self-reinforcing depends entirely on its actual market effects. *If* this grading system really does have the market effects Bruck is so convinced it will have, then diversity will become a financial necessity. The result will not be self-reinforcement, but instead it will be equalization among firms. Firms that score low on the scale will offer larger signing bonuses to minorities and/or be willing to dip lower in quality for minorities to make the numbers work out.
It will only be self-reinforcing if, as I personally suspect is the case, there is no market ramification for having a low diversity grade.
At 10:13 PM,
junk said…
I think the point of a rating is not about recruitment as much as it is about firm culture. If a firm is family friendly, the firm will be able to recruit more women (who even if they assume the traditionally male role of being a bread-winner still give birth and breastfeed) and more older students who are more likely to already have families.
If the firm provides flexible holidays, it's more likely to attract people whose faith is not Christianity.
If the firm allows for extended holidays, the firm is more likely to attract different ethnicities whose families might still live abroad.
ETC.
I don't think it's about sheer recruiting in the old affirmative action sense, I think it's about changing the culture to make working at a specific firm more friendly for people with different needs. Its about creating policies that allow people with different needs to be as productive as the traditional worker, not purely promoting someone who works less.
At 8:30 AM,
Frank said…
Very perceptive post. I worry about self-fulfilling prophecies in many rankings. I have some commentary on these types of arguments here:
http://www.concurringopinions.com/archives/
2007/04/spirals_slipper.html
my last paragraph may be relevant here:
Many commentators have discussed an "echo chamber" effect, a version of the self-fulfilling prophecy, whereby the all-important "reputation scores" are themselves driven by the very rankings they are supposed to help determine. My question is: has any firm "spiraled" up or down the rankings? What was the original impetus?
At 12:05 PM,
Michele said…
Hmmm -- the rankings aren't a prophecy, they are noticing current reality, so it's hard to see how they could be "self-fulfilling". Maybe there was some earlier prophecy that has been fulfilled?
As others have noted, employers with low diversity may have to offer a compensating differential -- a wage premium -- to attract workers who value diversity. This seems OK to me. If it works to increase diversity, then the differential would presumably decline (law firms, are you listening?)
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