Government Warns Law Firms of Consequences for Diversity Failures

Department of Labor
Department of Labor

U.S. Department of Labor in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)

A key federal contracting overseer put law firms on notice Wednesday, warning that the government is paying attention to the diversity gap in the legal industry.

Craig Leen, the director of the Office of Federal Contract Compliance Programs (OFCCP), told industry representatives at a town hall meeting in New York that the scarcity of women and minorities at firms in leading roles has been noted by the office, and it will be taking a closer look.

Leen said in a brief interview after the meeting that “there is evidence of low representation at law firms and financial firms, and our goal is to fix it and work with them to do so."

"This is the beginning of the process,” he said.

The OFCCP, an office within the U.S. Department of Labor, administers and enforces laws that make it illegal for federal government contractors and subcontractors to discriminate in employment on the basis of race, color, religion, sex, national orientation, gender identity, disability or veteran status. It audits companies for compliance and can take enforcement action, including negotiating conciliation agreements and imposing sanctions, up to obtaining monetary relief and terminating government contracts.

Leen said during Wednesday's meeting that the office looks at systemic issues, “and we are seeing serious issues.”

Last month, the Office of Federal Contractor Compliance Programs published its new corporate scheduling announcement list of 3,500 contractors and subcontractors who may be subject to a compliance evaluation in Fiscal Year 2019. Some law firms on the audit list included Ballard Spahr; Fox Rothschild; Haynes & Boone; Mayer Brown; Morgan, Lewis & Bockius; Paul Hastings; and Pillsbury Winthrop Shaw Pittman, according to the list.

The gathering included representatives from the Labor Department, the U.S. Equal Employment Opportunity Commission and other government agencies, as well as from law and other professional services firms and human resources specialists. Questions posed by the government included: “how are firms addressing the low representation rates of women, minorities and minority women at the partner levels,” “how do firms review their current level of people with disabilities,” “how do billable hours requirements accommodate family leave,” and “how do firms ensure men and women are treated the same regarding family leave policies?”

Another pointed question: “How can OFCCP address concerns in disclosing information on equity and non-equity partnership numbers for women and minorities to OFCCP?”

Hiring and promotion of women in law firms and legal departments has been a concern of the legal industry, with study after study showing a sharp drop-off in the number of women partners at firms and in-house departments after achieving parity in law school enrollment and near parity as early associates. Recently, women have filed gender discrimination claims against firms including Morrison & Foerster, where plaintiffs complained of a "mommy track" for women, and Jones Day, where plaintiffs described a “fraternity culture.”

As some law firm representatives in attendance pointed out, however, members of some minority groups continue to be underrepresented even in law schools, presenting additional obstacles.

Leen made clear his support for equitable family leave programs, saying the lack of support from the top for family leave policies is likely responsible for at least some of the disparity in women’s outcome at firms.

Before joining the OFCCP, Leen was city attorney of Coral Gables, Florida, where he was general counsel and chief legal officer, according to his official bio on the OFCCP website. He was also on the constituency board for the University of Miami‐Nova Southeastern University Center for Autism and Related Disabilities.

“Leadership at the top is important,” Leen said.

When some law firm representatives pointed out during question-and-answer sessions that it is controversial whether law firm partners are employees subject to equal employment laws, Leen made it clear that the OFCCP regards associates as employees under its purview and that associate promotion rates to partner would be subject to OFCCP review. “We are going to be looking at that,” Leen said. “We are very keen on the issue of promotions.” He said the office would be issuing guidance soon.

On March 25, OFCCP published an updated list of 3,500 contractors and subcontractors that may be subject to a compliance evaluation in Fiscal Year 2019, which included several law firms. But some firm members in attendance also said that federal contracts were a small percentage of law firms' revenue, and that they might decline to do business with the government if reporting and compliance requirements were too burdensome.

Some of the recommendations floated by working groups at the event included suggestions that firms reducing billable hours requirements for transitioning parents; that they credit billable hours for activities such as mentoring diverse associates; and that leave policies be enhanced to address life situations broadly, not just parental leave.

Leen said the OFCCP would be paying close attention in the coming months to compliance with anti-discrimination laws in the legal industry, financial services industry, universities and at tech firms. Town Hall meetings with the tech industry were held earlier this year.

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