Since its founding 10 years ago, Halleland Lewis Nilan & Johnson in Minneapolis has valued diversity as the right thing to do.

Turns out, it’s good for business, too.

“Our clients are valuing diversity and demanding diversity, and it makes good business sense,” said Teresa J. Kimker, a shareholder in the 50-attorney firm.

Halleland Lewis is one of a growing number of firms across the country recognizing the bottom-line basis for diversity.

Jane Pigott, head of R3Group, a diversity consulting firm in Chicago, said that more senior law firm partners have begun preaching “the business case for diversity – and why it’s as fundamental as the billable hour.”

Driving force

The most significant factor driving law firm diversity is demand from corporate clients.

Fueled by Sara Lee general counsel Roderick Palmore’s 2004 Call to Action, which advocated diversity in the legal profession, a growing number of chief legal counsel at major corporations are examining their outside law firms’ diversity records.

Last year, the nation’s largest retailer, Wal-Mart, provided a major boost to the diversity drive by telling its top 100 law firms that at least one person of color and one woman must be among the top five relationship attorneys handling its business.

Corporations are factoring in law firms’ diversity records in “making their decisions on whom they’re going to hire and fire,” Pigott said.

Kathleen Flynn, director of client relations and marketing for Sedgwick, Detert, Moran & Arnold in San Francisco, said clients want specifics about diversity efforts.

“We’re getting requests in our RFPs and proposals – what’s our diversity mission? How are we going to staff teams to demonstrate diversity?” she said.

“We need to make sure we are a reflection of our clients,” Flynn continued. “If we’re going to grow and flourish as a firm, then we need to build from ranks that are very diverse.”

Changing law school demographics are also bolstering firm diversity.

Women now make up 49 percent of all law school students; African-Americans and other people of color make up 27 percent; and gay and lesbian students total 10 percent of law school students.

“If you want to hire the best and the brightest, this is what it looks like now,” Pigott said.

Roy Ginsburg, an attorney coach in Minnetonka, Minn., noted a more controversial reason for law firm diversity – the strategic use of women and minority attorneys in litigation. Proponents contend that minority and women lawyers can help firms connect more effectively with diverse juries.

Critics, however, contend that using women and minority attorneys – especially to defend a lawsuit involving race or sex discrimination – is exploitative.

“The response to the critics is that as long as the attorneys are competent and their presence does not risk being viewed as ‘window dressing’ by the jury, the strategy is simply smart advocacy,” Ginsburg said.

Focus on retention

Diversity experts say that law firms have to do a lot more than simply hire women and minority attorneys.

“Recruiting is only 20 percent of the issue,” said Charlotte Wager, a partner in Jenner & Block’s Chicago offices and director of professional development. “The issue is retention, advancement and leadership.”

Law firms that fail to retain women and minority attorneys can face substantial costs. According to Ginsburg, the cost of losing a second-year associate can reach as much as $250,000, after factoring in the lost return on the investment in training an associate.

In addition, he said, law firms that lose minority and female associates could face discrimination litigation, which can be costly in terms of legal expenses and negative publicity

Helise Harrington, diversity manager and a partner at Sonnenschein Nath & Rosenthal in New York City, said the firm has developed mentoring and leadership programs aimed at increasing leadership opportunities for women, racial and ethnic minorities, gays and lesbians and employees with disabilities.

“We hope with mentoring and our emphasis on diversity training, we will not have such a big attrition rate for women and minorities – which has plagued most law firms,” Harrington said.

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Four firms share solutions for creating a diverse workplace

Here’s what several innovative law firms are doing to hire and retain women and minorities:

Halleland Lewis Nilan & Johnson in Minneapolis

A written diversity policy and diversity committee has helped boost the percentage of women attorneys to a majority – 51 percent. Women constitute 34 percent of the firm’s shareholders – double the national average. Eight percent of attorneys are African-American, and 4 percent are openly gay or lesbian.

The firm offers generous maternity leave and work-at-home policies for mothers, and provides domestic partnership benefits for gay and lesbian employees. Halleland Lewis has held several diversity retreats – closing the entire firm for a day at a time, and bringing in speakers to discuss diversity issues.

“We have done fairly well with women and also African-American associates in recruiting,” said Teresa J. Kimker, a shareholder at the firm. “We want to focus now on making sure Halleland Lewis is a place that’s comfortable and where they can become partners.”

Sonnenschein Nath & Rosenthal in New York City

The firm has established a diversity plan with goals for recruitment, retention, promotion and leadership. Individual partners are accountable for achieving diversity goals. The plan applies to all employees – not just attorneys – and includes a vendor diversity program.

Diversity efforts helped boost the percentage of women partners to 22.5 percent last year, from 21.7 percent in 2004, and the percentage of minority partners to 10.8 percent, from 9.4 percent in the same time period. Six firm-wide committees include at least one woman and minority attorney each.

Six women, three minorities and one gay attorney are leaders of national practice groups. A woman heads Sonnenschein’s Washington, D.C., office and another co-heads its Chicago office.

To encourage career growth, all associates receive individual mentoring. Affinity groups of minorities and gay/lesbian attorneys meet regularly for support and networking.

Jenner & Block in Chicago

“The critical thing we’re doing is creating a culture of inclusiveness,” said partner Charlotte Wager. “The culture of inclusiveness is the opportunity for women, people of color and LGBT (lesbian/gay/bisexual/transgendered) attorneys to advance, develop, be promoted and be future leaders.”

The number of minority partners in the firm has nearly doubled in the past three years; and the number of women partners in the past three years has increased by nearly 30 percent.

Key components of the 400-lawyer firm’s diversity program include a mentoring program for all associates in their first three years at the firm. Fourth-year associates are assigned advisors, who help develop individualized career plans.

A “free market” assignment system helps ensure that all associates have the opportunity to advance.

Affinity groups provide networking opportunities and role models for women and minorities.

Sedgwick, Detert, Moran & Arnold in San Francisco

The firm is ranked 15th for diversity out of the top 100 law firms by Multi Cultural Law Magazine and The Minority Law Journal. Since 2002, Sedgwick Detert has increased its women partnership ranks by 60 percent.

Last year, four of six attorneys promoted to partner were women. The 360-lawyer firm now has several part-time partners who are women – busting the myth that an effective partner has to work full-time. Forums aimed at women attorneys focus on such topics as work/life balance, elder care and breaking the glass ceiling.

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