Jack Thorlin (Georgetown), Racial Diversity and Law Firm Economics, 76 Ark. L. Rev. 131 (2023):
Why racial diversity in law firms lags behind similar professions (and even other parts of the legal profession) calls for explanation. Often, explanations for lack of racial diversity in a specific field fall into one of two camps. One explanation is individual bias, the conscious or subconscious tendency to discriminate against people of color. Subconscious bias is very well studied and has indeed been proven to exist in many different contexts. But unless a particular industry triggers some specific stereotype or prejudice, bias does not explain why some industries do better than others at promoting racial diversity. Another explanation is the broad socioeconomic inequalities facing minorities long before they go to work at law firms. Again, there is undeniable truth in this explanation, but it is not industry-specific. If anything, lawyers are probably more aware of the history of discrimination than other professionals for the simple reason that it is impossible to understand constitutional law without it.
Understanding why law firms lag behind on racial diversity must start with broader comparison—what differences are there between law firms and, say, medical organizations? I have seen no evidence that law firm leadership is more prejudiced than, say, leaders of the medical community, but we can point to any number of differences of structure, evaluation, and compensation between law firms and medical organizations. These differences give us a starting place for finding the cause of law firms’ diversity problems. The specific incentive problems I have identified in this Article may not completely explain law firms’ failure regarding racial diversity, but I strongly believe that law firm structure and incentives merit further, exhaustive study.
Focusing on incentives and structure has many benefits. First, it allows us to ignore utopian rhetoric. Lawyers often brag about the role we played in ending many forms of discrimination, but we are less profuse about the roles we play in continuing discrimination. For every attorney who participated in the NAACP’s legal battles against segregation, there was an attorney on the other side fighting just as hard to keep segregation alive. Ultimately, lawyers are just people, and people fall on a spectrum of goodness. Some will sacrifice anything in the name of justice. Others will sacrifice a little. Still others will do the right thing if it is equally lucrative as evil. And some will work for evil with a passion normally reserved for doing good. Consequently, we should expect a strong correlation between good results and good incentives. The more sacrifice required to do the right thing, the less it will be done.
Another benefit to examining incentives is falsifiability. Given data and economic theory, we can offer specific predictions about, say, the role of an eat-what-you-kill system in restraining racial diversity. It is harder to measure the role of, for example, subconscious prejudice in the specific failure of law firms to achieve greater diversity. While that may indeed be an important factor, how law firms could fix subconscious prejudice is much harder to discern. Similarly, the broad socioeconomic inequalities that disadvantage people of color in the United States undoubtedly play some role in the diversity travails of law firms, but if we allow firms to do essentially nothing while society at large works on inequality, we will be eternally waiting.
Finally, we should note that some of the incentive problems at law firms that have stymied racial diversity could be profitable to fix for reasons beyond diversity. It is implausible that the world and the nature of legal work has changed so dramatically since the late nineteenth century, but law firm structure has remained largely static. Rethinking how firms work—how associates get ahead, how partners interact with associates, how clients interact with firms—could lead to better provision of legal services. We should not mistake the lack of innovation in large law firms as suggesting the perfect structure has been reached. Rather, law firms, protected from competition by bar requirements, have not faced a need to innovate. If a dearth of racial diversity ultimately requires changes to the fundamental structure of firms, it should provide a rare opportunity to rethink the firm model. If the current model is most efficient, then it will survive. If it is not, then we should not hesitate to experiment with new organizational schemes.
