Beyond Advisers Discusses Managing DEI Risk in a Shifting Legal Landscape with The American Lawyer

With renewed scrutiny on diversity, equity, and inclusion, law firms face heightened risks in how they navigate DEI. Scott Curran, CEO of Beyond Advisers, offered guidance to The American Lawyer on how legal leaders can balance reputation and compliance in an increasingly polarized environment. Read the full article below!

In Trump’s Second Term, Every Law Firm Decision on DEI Comes With Risk

By Dan Roe

Caught between a hostile administration and standing commitments to diversity, law firms are forced to choose which constituencies they value most.

Within three months of inauguration day, six Big Law firms received executive orders or presidential actions against them for issues that included DEI, while the EEOC threatened to investigate 20 large firms over their DEI practices and affiliations with diversity-oriented groups.

The way the targeted firms responded to the administration has been well-publicized: four took the administration to court and thus far have prevailed, while nine firms struck deals, with eight of those firms never receiving executive orders in the first place. But firms’ decisions on DEI going forward remain evolving and varied.

One thing is consistent, however: Almost no one currently working at a firm large enough to feel exposed wanted to discuss DEI publicly. Law.com reached out to at least one diversity leader at every firm in the Am Law 100 for this story; only one agreed to go on record.

But with the benefit of conversations with several current chief diversity officers who were able to speak anonymously–as well as discussions with former Big Law diversity leaders and current consultants on DEI and DEI-related communications–what follows is an analysis of how firms are interpreting risk related to DEI decisions from the administration, talent and clients.

Risk Factor: The Government

Although the most recent executive order against a law firm was President Trump’s April 9 order against Susman Godfrey, which referenced the firm’s “unlawful discrimination” against white applicants, many firms are interpreting the slowdown in administrative scrutiny as a lull in the action.

“It certainly seems like there’s been a lot of momentum behind and around the firms that have fought back, but I think there’s still this sense that it’s not over, and expecting appeals and feeling like we haven’t really reached the end of it yet,” said Cari Brunelle, founding partner of legal advisory firm Baretz+Brunelle, who has been consulting with law firms about their external and internal communications on DEI.

With that in mind, firms are still tweaking their outward presentation of DEI commitments in various ways. But perhaps the most universal change has been the striking of the “DEI” acronym and the word “diversity” altogether. In their place, firms have swapped in words deemed more palatable to the administration, such as “fairness” and “opportunity.” And while many large firms still have DEI (or equivalent) webpages navigable from their homepages, others have made certain materials harder to find.

In some cases, firms have made more substantive changes. In a response to the EEOC, Goodwin Procter recently ended its relationship with external diversity-focused organizations such as the Sponsors for Educational Opportunities (SEO) legal fellowship, the Leadership Council on Legal Diversity (LCLD) and Diversity Lab’s Mansfield certification.

Mansfield-participating law firms have always had the option to opt out of inclusion in public Mansfield certification materials, but this year, Diversity Lab offered firms the option to continue using resources and attending monthly forums without participating in the program.

“So far, no law firm has chosen that path—the hundreds of firms that have recommitted have chosen to continue to be part of both the community and the formal certification process,” founder and executive chair Caren Ulrich Stacy said.

Multiple sources indicated that the Mansfield certification this year has added what they characterized as a “stealth” option for firms, allowing them to continue participating in the program—which requires, among other factors, that at least 30% of candidates interviewed for leadership roles come from underrepresented backgrounds—without being named in marketing materials.

In a statement, Stacy said the vast majority of firms that previously participated in the Mansfield certification have stayed on, although she declined to state how many firms dropped out.

“Whether each firm chooses to do the work quietly or publicly, which has always been an option for firms since Mansfield’s inception, is up to them. In the current climate, it won’t be surprising if more firms exercise the option to do this work quietly,” Stacy said. “What matters most is continuing to do the work to ensure equal opportunity for all talent, not the publicity.”

In other cases, firms have removed public information about affinity groups and employee resource groups, or even cut those groups altogether. At some firms, diversity-oriented staff are in a precarious position.

“There are people doing this work in law firms that are quietly and not so quietly being let go, and that’s disturbing to see,” said one Am Law 100 CDO. “Or they’re being repositioned within their firms outside of the work related to this.”

This spring, Kirkland & Ellis—which made a deal with the administration agreeing, among other terms, to avoid “illegal DEI discrimination”—fired its director of inclusion of five years and several DEI-oriented staff. It was not clear whether the cuts were tied to the Trump deal, though one source said the cuts were related to a reorganization that predated the November election.

However, there are also firms that have seemingly done nothing in response to risk from the administration, or even doubled down on their commitments. Ultimately, diversity leaders at law firms said they believe firms’ substantive decisions related to risk from the administration are a reflection of their cultural commitment to DEI in the first place.

“Intentionality toward diversity, equity and inclusion efforts is key,” said Kia Scipio, a former Am Law 100 diversity leader. “One of the things we saw was a lot of communication and promotion of a commitment to diversity, equity and inclusion back in 2020, 2021 and even 2022. Now many are asking: Was that real? Was it all just for show? Was it really a commitment? Was it just to look and sound good?”

While firms’ decisions on mitigating government risk are varied, one thru-line appears to be a focus on continuing to make hiring and promotion decisions more fair to all—DEI work, in effect, but without the fraught acronym.

Per a second Am Law 100 CDO’s example, research shows that women and racial minorities are more likely to be evaluated on personality and attire than white men in performance reviews. “We could run a session on implicit bias and review feedback, make it mandatory or not, and say we’re going to ‘DEI’ this,” the CDO said. “But what if we changed our review system and structure where we asked partners reviewing to include concrete feedback for each attribute we care about?”

The first solution sounds like DEI work, the CDO noted, which opens the firm up to criticism. “Or, we change our entire review system to solicit better feedback for everyone,” the CDO continued. “The white male associate got better feedback, and the change helped guard against a failure to give better feedback—how do you attack that?”

Risk Factor: Talent

Mitigating risk from the Trump administration means inviting the risk of losing talented lawyers and staff, and struggling to recruit them in the future, sources indicated.

Paul, Weiss, Rifkind, Wharton & Garrison, the first law firm to cut a deal with the administration, has already lost key litigators, including the founders of a new spinoff firm: Karen Dunn, Bill Isaacson and Jeannie Rhee of Dunn Isaacson Rhee.

At firms that have made changes to external information about DEI or the programming itself, the method of communicating those changes has influenced the way current attorneys and staff interpret them, Brunelle said. “It has to be done in a way that shows that you’re not changing who you are at your core,” Brunelle said.

That communication has included town halls where firm leadership can express their feelings in a more personal way than a firmwide email, or firmwide communications that are followed up with in-person talks to smaller groups.

However, even changes to the language of DEI itself can still send a negative message to attorneys from underrepresented groups.

“I’m a Latina partner in the profession, and I believe Latina partners still make up less than 2% of all law firm partners,” said Hanson Bridgett CDO Jennifer Martinez. “I think it’s very disheartening as one of those people to see some of that, especially knowing the state of the actual numbers. I would like folks to consider that point in addition to the legal risk that they’re considering.”

Martinez, an employment lawyer, also noted the risk involved in getting rid of programs that were meant to mitigate risk in the first place. “What folks aren’t remembering is that [firms] started these DEI programs decades ago in some places because they had risk of ‘traditional’ discrimination claims because they never promoted a woman or an LGBTQ person above a certain level,” she said. “Rollbacks are not only not risk-neutral, they’re just rolling you back to a place where you had a far greater risk of traditional discrimination.”

Appeasing the administration also comes with reputational risk that could impact future recruitment of laterals and first-year associates alike, with the latter group being particularly problematic due to Gen Z’s awareness of social issues.

“Ask all the questions you want about boycotts, but is there qualified talent skipping Paul Weiss this year? Absolutely. Same for Kirkland, same for Simpson Thacher, etcetera,” said Scott Curran, a social impact consultant at Beyond Advisers who works with law firms. “What’s the cost to them? I don’t know, but I also don’t know any better than the managing partners of those firms do. It may be unquantifiable.”

Risk Factor: Clients

Clients are another difficult-to-quantify variable in the DEI equation. Firms that fought the administration and firms that capitulated have since traded clients from one another, but the rationale for those changes in representation hasn’t been directly tied to firms’ actions in response to executive scrutiny.

To the extent that firms find it risky to continue providing clients with demographic information on legal teams, some clients are reducing that perceived risk by no longer asking for such data (or asking for fewer specifics).

“Either you don’t see the request at all, or they’re asking for a blanket statement, and it’s been on the rare occasion that clients are using the word ‘DEI.’ They may ask, ‘What is your overall commitment to a workforce inclusive of diverse talent?’” said the first Am Law 100 CDO.

Meanwhile, the second Am Law 100 CDO noted that they have seen a contraction and decline in inquiries for demographic information in RFPs, although those requests haven’t stopped altogether.

Other law firm diversity leaders said they haven’t seen much of a change in clients’ interest in the diversity commitments of their outside counsel.

“We continue to have clients that are as interested as they have been in making sure that the folks who represent them come from a diverse group of people,” said Rima Badawiya, chief diversity partner at Lewis Brisbois Bisgaard & Smith. “The statistics bear it out that the more diverse an organization is, the more successful it can be. I haven’t really noticed anything [different] with clients.”

And, similar to lateral partner exits that may be coming down the pike, client movement based on firms’ DEI choices is not out of the realm of possibility. Several general counsel interviewed by Law.com in May said they had stopped short of firing firms that made deals with the administration, but they were also removing those firms from contention in future matters.

“I think even for private equity clients, while it can be argued that they care less because their primary motivation is profit seeking, the people I know in private equity care an awful lot about these things,” said Curran, of Beyond Advisers. “I think if given a choice between two equal firms where one is in the category of firms that capitulated and others are in the company of Perkins, Jenner and Wilmer–all other things equal, more private equity firms will pick the Perkins, Jenners and Wilmers than won’t, because their talent cares about it.”