Will any general counsel in the UK have the guts to replicate the tech giant’s minimum standard sanction?
Pitching for new business via a formal tender process is one of the most challenging aspects of business development, particularly when formal procurement rules are involved. Since the recession, in-house legal teams have had the upper hand and have fully embraced their purchasing power as a means of improving the value that they receive from their external law firms.
The whole discipline of legal procurement has developed rapidly to insist on more transparent and creative pricing structures, innovation to enhance the legal service offering and an alignment of values on issues such as diversity or environmental policies.
I can recall more than one occasion when lawyers have had to scrabble together a policy on something that they had barely thought about before, because it was a requirement in an invitation to tender. But having a policy does not always translate into action and results, which may be one reason why progress in diversity in the legal progression continues at a snail’s pace.
HP’s legal team has now set out a minimum standard for diversity from legal service providers in the US with more than 10 attorneys, requiring that at least one relationship partner or an attorney who performs or manages at least 10% of billable work is diverse in terms of race, ethnicity, gender, sexual orientation or disability status.
Diversity is embedded in the HP culture, with an impressive section on its website and a claim to have the most diverse board of directors in the tech sector, and to be among the most diverse in senior executive positions.
General counsel Kim Rivera has been proactive in extending this to the legal team and is one of 20 GCs in the Fortune 1000 who are encouraging all the chief legal officers to embrace the Amercian Bar Association model diversity survey to facilitate consistent data collection and analysis.
The letter to HP’s law firm partners indicates that 10% of fees could be held back if a firm fails to meet this standard – but it is clear from the implementation timeframe (which numerous online critics appear not to have read) that the objective is not about saving money, but about working with a diverse team.
That correspondence must have sent the HP relationship partners scurrying round to the HR department for an immediate report on whether they met this standard and what they might need to do. But firms have until the second year of their engagement with HP to comply and so have plenty of time to adjust team composition if required. It is hard to imagine that this will be too much of a stretch for the sort of firms that will be on HP’s legal panel.
What will be interesting to see will be the impact of this for HP in two years (I hope they will publish details of any improvement), and whether any general counsel in the UK is brave enough to follow this lead and flex their procurement muscles to push for greater diversity among their legal service providers.
Sue Bramall is director of Berners Marketing