The Supreme Court’s ban of affirmative action in college admissions has prompted a new wave of practices specializing in diversity, equity and inclusion at law firms including Wall Street’s Simpson Thacher and Paul Weiss.
The firms decided there was enough business to justify creating the practice areas because of client queries about racial equity audits and whether diversity pushes would withstand possible legal challenges after the Supreme Court decision.
“We were being responsive to clients who are increasingly coming to us, even before the Supreme Court decision this summer,” former US Attorney General Loretta Lynch, who helps lead the new practice at Paul Weiss, said in an interview. The clients were “saying they wanted to make sure their DEI programs were effective.”
The moves represent a burgeoning second wave of DEI practice area creations and expansions after the killing of George Floyd by police in May 2020 also prompted firms to see a need. Then, clients wanted law firms to help design their DEI programs and ensure programs used best practices.
This time, corporations see a need to defend those programs against conservative-fueled attacks emboldened by the June 29 Supreme Court decision in Students for Fair Admissions v Harvard, which struck down race-based criteria for admissions in higher education.
America First Legal, led by former Trump administration policy adviser Stephen Miller, this month asked the US Equal Employment Opportunity Commission to investigate Nascar and Rev Racing for “illegal discrimination against White, male Americans.”
Conservative medical group Do No Harm last month urged an appeals court to revive its lawsuit over a Pfizer Inc. diversity fellowship program. More than a dozen Republican attorneys general in July warned Fortune 100 CEOs against “discriminating on the basis of race, whether under the label of `diversity, equity, and inclusion’ or otherwise.”
“There’s a new level of concern or questions about whether the existing programs are still permissible under the law,” said Erik Eisenmann, who co-chairs Husch Blackwell’s Workplace Diversity, Equity and Inclusion practice group, which began in March 2022.
‘Swirling’ Debates
Lynch, who’s been at Paul, Weiss, Rifkind, Wharton & Garrison for more than four years, helped defend Pfizer’s recruitment program. She’s also led racial equity audits of Amazon Inc. and Chevron Corp. that were commissioned by shareholders and the board of directors.
Paul Weiss in late September announced its DEI strategic advisory practice, featuring a powerhouse lineup that includes firm chairman Brad Karp, Lynch, former US Homeland Security Secretary Jeh Johnson, and Jeannie Rhee, once a prosecutor in Robert Mueller’s special counsel office.
“Companies are still keenly aware that it’s an asset to them to have diversity in their ranks,” Lynch said. “They are also cognizant of the legal and social and political debates that are swirling around as well.”
Paul Weiss led a DEI task force created by the New York State Bar Association that authored a 93-page report with guidance for private employers to sustain and pursue more DEI initiatives.
Simpson Thacher & Bartlett created its equity and civil rights reviews practice in August after it found company general counsels increasingly inquiring about racial equity audits and other issues related to diversity programs, said Martin Bell, who co-leads the practice.
“The main equity issue keeping a lot of GCs up at night is this broader question that Students for Fair Admissions put squarely on the table: DEI — where does all of that fit right now?” Bell said.
McGuireWoods in September began its DEI practice, citing increased scrutiny of corporate diversity efforts. The practice is “a formal declaration, and it’s also a consolidation of our efforts in a more targeted way,” said Jack White, who co-leads the practice.
Here to Stay
Bonnie Levine, who was a founding member of Ogletree Deakins’ diversity and inclusion practice group, said businesses can no longer navigate DEI issues without their lawyers.
“As long as businesses are interested in doing diversity, equity and inclusion, they are going to need legal advice,” said Levine, who founded Verse Legal, a legal consultation company, after a decade-long stint at Ogletree.
Firms are responding to the market by advertising these distinct services, according to Nikia Gray, executive director of the National Association of Law Placement.
The first wave of structured DEI practice groups was driven by client demand arising from the national dialogue on race after the killing of George Floyd by police in May 2020, according to Gray. Firms such as Husch Blackwell and Nixon Peabody marketed their specialized groups two years ago.
Shareholders are increasingly leaning on litigation alleging their investments are threatened by bad work culture.
Tesla Chief Executive Officer Elon Musk and others were sued last year by an investor alleging they breached their fiduciary duty by fostering an environment of discrimination and harassment.
Using a similar playbook, Miller’s group sued Target Corp. in August alleging its inclusionary LGBTQ+ marketing introduced financial risks.
Rare Dynamic
Law firms are fighting the same scrutiny, in a rare dynamic that puts them in similar scenarios as their clients.
Two international Big Law firms were sued over their diversity programs and more are getting letters with threats of similar legal action. Law firms received a similar letter from Sen. Tom Cotton (R-Ark.) as Fortune 100s companies over their diversity programs.
“It gives the client a sense of reassurance,” Husch Blackwell’s Eisenmann said. “What I’m recommending to you is what we are also doing at the law firm.”
Even as more law firms market these new practices, there’s a consensus on the lack of heightened competition among firms when their clients might need conflict-free counsel.
“Sometimes there are conflicts that arise and so you do have a collegial relationship with other firms because you might need to make a referral,” Simpson partner Alicia Washington said.
In a legal landscape that is constantly shifting, Victoria Slade, who co-leads Davis Wright Tremaine’s group, said it’s better for clients to have multiple avenues of counsel.
“The more we can have people who are assisting employers and answering those questions to make them feel more comfortable moving forward with their DEI work, the better,” Slade said.