Quality assurance

Law firms that don’t ensure diversity within their ranks will lose out on opportunities to be hired by large organizations and young general counsels.

That was one of the major takeaways at the annual meeting of Meritas — a referral organization and global alliance of business law firms that counts Goulston & Storrs among its members — held recently in Boston.

Among the sessions was a presentation by a group of young lawyers who conducted a targeted survey of in-house counsel to answer the question: “What is the 21st century client looking for when retaining — and maintaining — its law firm of choice?”

While only 60 percent of respondents said they think diversity within a law firm is important to clients, the percentage jumps considerably when looking specifically at in-house counsel under 55 (80 percent) and those who work at companies with 101-plus employees (70 percent).

“Diversity is very important to larger firms. The smaller companies tend to focus solely on the work,” said presenter Scott L. Sternberg of Baldwin, Haspel, Burke & Mayer in New Orleans.

Alan G. Bryan, leader of Wal-Mart’s Office of Outside Counsel Management, said the world’s largest retailer recently moved $60 million worth of its legal spending to “diverse relationship partners” after a review found a lack of diversity within the law firms working for it.

Bryan said diversity is one of Wal-Mart’s top three considerations in evaluating law firms, along with cost and performance. He also said Wal-Mart doesn’t look at just the gender and racial make-up a firm, but also whether it employs flexible scheduling policies.

“What we have found is work-life balance creates a better lawyer,” Bryan said.

For all the attention alternative-billing methods get, only 20 percent of the survey respondents said they used it “always” or “very frequently.” In fact, “high cost” was only the third most likely factor to result in termination of outside counsel, according to the survey, preceded by “not providing practical advice” and “poor responsiveness.”

“We just basically need to hit it out of the park every time,” said presenter GianClaudio “JC” Finizio of Delaware’s Bayard law firm.

Seventy-four percent of respondents said they would terminate a law firm for poor response times, and the presenters cited a Harvard Business Review study that found 56 percent of clients felt lawyers at “white-shoe” firms are generally less responsive than those at other law firms.