Wednesday, October 31, 2007

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