DEI, ESQ: Diversity as a Multiplier on Legal Teams

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In economics, a multiplier refers to an economic factor that amplifies the effect of some other outcome. And the term differentiator usually refers to a quality or feature that sets something apart from others and often makes it better. When it comes to companies, diversity can be both a differentiator and multiplier. For example, a study from Harvard Business review found that diverse companies had a 19 percent higher innovation revenue. The potential impact of diversity on legal departments is no different. Diversity on legal teams can bring a multitude of benefits. Here are three ways in which diversity can strengthen legal teams.

Creative problem-solving and better decision-making

A diverse team, composed of individuals from various backgrounds, cultures, and experiences, can not only offer a broader range of perspectives but it can also lead to more creative problem-solving and better decision-making. One reason for this, according to a study highlighted by the Kellogg School of Management at Northwestern University is that “diverse groups outperformed more homogeneous groups not because of an influx of new ideas, but because diversity triggered more careful information processing that is absent in homogeneous groups.” Another reason is that diverse teams focus more on facts and process facts more carefully. And last, but certainly not least, diversity is strongly correlated with innovation.

While these studies are not focused on lawyers, it stands to reason that these studies can also apply to in-house legal teams. By combining the skills, experiences, and perspectives of individuals from different backgrounds, legal teams can more effectively tackle complex issues and come up with creative solutions. A team with diverse perspectives is better equipped to evaluate risks and opportunities from multiple angles, resulting in more well-rounded decisions, than a homogenous one.

Specific studies aside, Sandra Phillips, general counsel and chief legal officer of Toyota Motor North America, recalls how the diversity of her legal department assisted the company in navigating the COVID-19 pandemic and the social justice issues that emerged following the onset of the pandemic.

“We were navigating unprecedented times,” Phillips says. “If there was ever a time where we could benefit from the different skills, experiences, and perspectives in order to advise the business on challenges we never thought we would face, 2020 was that time. Understanding what was the right thing to do, the appropriate thing to do, the timely thing to do, resulted from everyone bringing their unique perspectives to the table. Solving a problem requires pulling together a team of unique and creative people so that all potential solutions are raised and potential downsides are discussed."

Greater cultural competence

A diverse legal team is better equipped to handle multicultural and international legal issues than a homogeneous one. Understanding different cultures, languages, and legal systems is crucial in providing effective counsel to clients operating in diverse, and often, multicultural environments. Of course, it bears noting that culture transcends borders. Social norms can vary depending on what region of the United States you grew up, whether you lived in a rural area, in the suburbs or in a metropolitan area, and your socio-economic class.There are also subcultures in society like pop, gaming, and sneakers.

Jennifer Jones, managing counsel of Toyota Motor North America and co-author of this article, recalls a situation where understanding the vernacular of a certain generation and demographic group was important in deciding whether an employee engaged in threatening and intimidating conduct at work that could have resulted in termination. However, due to her familiarity with the colloquial term used, she educated HR on its innocuous nature. Without this unique perspective, an employee could have needlessly lost his job, resulting in potential risk to the organization.

This cultural competence not only assists with providing legal advice to internal clients, but it can also impact your litigation strategy, Phillips says. She believes that having a team with enhanced cultural competence gives legal departments a better chance at connecting with the jury pool. How lawyers communicate with the jury, tell the company’s story, and their ability to impact the jury’s decision depends on their cultural competence and how they resonate with the jury. The cultural competence attorneys bring to the team is just as important as the technical skillsets they bring.

Having greater cultural competence can also better meet the needs of diverse customer segments. Internal clients are not a homogenous group. In our globalized world, clients come from a variety of backgrounds. A legal team that reflects this diversity is better able to understand and address the needs and concerns of a diverse client base.

Competitive advantage through talent

Companies that prioritize diversity and inclusion often outperform their less diverse counterparts. One reason may be from their competitive edge through attracting, engaging, and retaining top talent.

Success starts with talent. Any leader is only as strong as the team as a whole. In order to attract the broadest talent group possible, there needs to be a desire to be part of the team. Diversity can help with that. Where people can visibly see a space where they belong, it is more likely that they will want to join and be engaged. By embracing diversity in recruitment, legal teams can tap into a larger pool of talent, potentially hiring individuals with unique skills and perspectives that contribute to the team’s success. Notably, by the year 2025, 75 percent of the global workforce will be made up of millennials, and a study from 2016 shows that 47 percent of millennials are actively looking for diversity.

It doesn’t stop at recruitment. When individuals feel valued and respected for their unique contributions, they are more likely to be engaged and satisfied. In diverse legal teams, individuals are more likely to feel included and appreciated, leading to higher morale, motivation, and productivity.

A wealth of benefits

In conclusion, a diverse legal team can offer a wealth of benefits, from improved decision-making and problem-solving to a better understanding of clients and an enhanced reputation in the market. According to Phillips, “Organizations just work better when teams are diverse because people tend to be more harmonious when they feel like they have a voice and a sense of belonging.” Embracing diversity is not only ethically sound but also makes good business sense in our interconnected and rapidly changing world and can lead to your legal department being both a multiplier and differentiator for your company.