Survey Shows Recession’s Impact on Minority Associates

October 16, 2009 by  
Filed under Articles

Top in-house lawyers fear that diversity efforts among their outside counsel will suffer as jobs are cut. And our latest Minority Experience Study suggests there’s reason to worry

 Susan Hansen

The Minority Law Journal

10-05-2009

 Given the current economic climate, it’s easy to see why long-range efforts to boost minority hiring and retention might fall further down the to-do list, as law firms attend to more urgent concerns. But memo to managing partners: Don’t expect clients to back off the push for greater diversity. Recession or no recession, many top in-house lawyers continue to care deeply about the issue. Indeed, they worry that the recent downturn is hitting minority associates especially hard, threatening the limited advances that law firms have managed to make. All big-firm associates may be facing a far shakier future, the thinking goes, but the outlook for minority lawyers could be especially bleak if firms let diversity efforts lapse.

 “The economic times suck,” one clerk at New York’s Skadden, Arps, Meagher, Slate & Flom wrote bluntly in response to our most recent summer associates survey. “The firm can’t change that. But the times have made for a difficult summer.” A Bryan Cave intern put it this way: “It is a scary time to be a law student.”

 Minority midlevels are also more pessimistic about coming salary cuts. At least among African Americans, there was also greater frustration with how law firm leaders have handled the slowdown, and a dimmer view of their future at their firm.

 “The danger is that the progress we have made on diversity will erode,” says Roderick “Rick” Palmore, general counsel of General Mills. Microsoft general counsel Brad Smith concurs: “Even before the onset of the recession, we were seeing a situation where progress was disappointing. It’s very important that we not slide backward.”

 Judging from our most recent Minority Experience Study, there’s definite cause for concern. This year we set out to measure the impact of the recession on midlevel associates of various racial groups. While all associates reported a falloff in work compared to last year, along with layoffs and benefit cuts at their firms, minority midlevels — particularly African Americans — seem to be feeling the economic crisis’s effects most acutely. Compared to those of their white colleagues, the workloads of black, Asian American, and Hispanic lawyers are lighter, and their billable hours are lower. Minority lawyers are also experiencing higher levels of anxiety about layoffs. That was true in our 2008 survey, but this year a greater percentage of associates in all ethnic groups said that the recession has affected them.

 Black associates were more likely to say that they were actively seeking other jobs, as well as more downbeat about the chances that they’d be at their current firms two years from now. As a group, African American lawyers were also more likely to cite “lack of work” as their main reason for moving on.

 Those findings don’t surprise diversity advocates like Venu Gupta, executive director of the Chicago Council on Minorities in Large Law Firms. The group has recently been busy holding workshops and career counseling sessions for a growing stream of newly unemployed minority attorneys. And not just first- and second-year lawyers, adds Gupta, but senior associates and even partners. “To me, the recession is like a final exam testing the commitment to diversity,” says Gupta. “So far the legal community has not passed with flying colors.” She adds, “My fear is that we will look up in two years, and the gains it has taken us ten years to make will have disappeared.”

 As in years past, the 2009 Minority Experience Study drew on responses compiled by our sibling publication The American Lawyer for its Midlevel Associates Survey. The survey, conducted in spring 2009, covered 6,101 third-, fourth-, and fifth-year associates at 165 law firms and included 4,592 whites, 556 Asian Americans, 211 Hispanics, and 169 African Americans.

 No question, these are stressful times for many big-firm lawyers. But as was true in our 2008 survey, minority midlevels appeared to feel particularly vulnerable. Nearly a third of African American lawyers, and almost a quarter of Hispanic and Asian Americans, reported high levels of anxiety at their firms about job security, compared to just over a fifth of white associates.

 Considering that minority midlevels are generally keeping less busy, they may have good reason to be nervous: More than a fifth of black associates and just over 15 percent of Asian Americans and Hispanics said their workloads were too light, in contrast to only about 13 percent of whites.

 Likewise, minority lawyers surveyed said they posted fewer billable hours on average last year than their white counterparts. The average hours billed figure in 2008 was 1,862 for black midlevels, 1,925 for Asian Americans, 1,965 for Hispanics, and 1,976 for whites. And minority lawyers are unlikely to boost their relative output much in 2009. Projected billables for this year were just under 1,825 hours for Asian Americans and African Americans, about 1,840 for Hispanics, and roughly 1,890 for whites.

 It’s probably not surprising, then, that minority lawyers are more likely to be braced for a pay cut than their white colleagues. At the same time, it should be noted that when we examined the issue last year, we found that actual salary gaps were mainly tied to geography and seniority, not to hours billed.

 As for the current environment, Arin Reeves, a diversity consultant with the Chicago-based Athens Group, contends that she has been seeing clear anecdotal evidence from around the country that minority and women lawyers are in fact paying a disproportionate price as a result of the shortage of work. “There are a lot of different ways this is playing out,” says Reeves, from canceled bonuses to salary cuts to outright layoffs.

 When she has questioned firms about some of those decisions, she adds, they virtually all say that they relied on objective criteria. Reeves notes, however, that seemingly objective measures such as billable hours may just be reflecting the fact that many minority midlevels have long had to struggle for access to good, plentiful work opportunities. “If there was inequity in the last five years, and you apply an objective scale, all you’re measuring is the amount of inequity,” says Reeves.

 As to getting enough of that good work, Veta Richardson, executive director of the Minority Corporate Counsel Association, notes that it’s often tied in to building key mentor and partner relationships — something she says has been a chronic challenge for many minority lawyers. “When work becomes less plentiful, it’s not surprising that minorities face significant challenges,” says Richardson, adding that the lack of good work isn’t just affecting associates. She says she has also been getting more calls for help in the last year from minority partners who say they are slowly being forced out of their firms.

 Over the years, our survey has consistently confirmed that African American lawyers in particular report a disparity in both the quality and quantity of the matters they’re assigned. This year once again, black midlevels were more likely to view the way work is distributed at their firms as less fair than their colleagues. On average they also reported less client contact along with lower levels of responsibility, and as a group they were less satisfied with the work feedback and the training and guidance they received as well as with their relationships with partners.

 

Amid the slowdown, fewer of these lawyers were redeployed to busier practice areas. Just 1.2 percent of black midlevels reported changing practice areas because of the recession, compared to 1.7 percent of whites, 1.9 percent of Hispanics, and 2.9 percent of Asians.

 As was the case last year, a higher proportion of black midlevels (roughly 13 percent) also reported actively looking for new jobs, compared to just under 8 percent of white and Asian Americans and about 3 percent of Hispanics (by contrast, last year’s survey found that 9 percent of Hispanics were looking for a new job; the reason for the sharp drop is unclear). Likewise, black lawyers were slightly less likely than whites to say they’d still be at their current firm two years from now. What’s more, when midlevels contemplated leaving their firm, African Americans were most likely to cite lack of work as the driving factor. Just under 5 percent predicted that insufficient work would be the main reason for their departures, compared to just under 4 percent for Hispanics, just under 3 percent for whites, and about 2.5 percent of Asians.

 

As for management’s response to the downturn, minority lawyers, especially black midlevels, see plenty of room for improvement. Roughly three-fifths of all associates surveyed said their firm had had layoffs in the past year. And though it’s difficult to generalize about attitudes regarding management overall, Hispanics and African Americans as a group gave their firms poorer marks for how they communicated layoff news. More than 60 percent of black lawyers said management’s handling of the recession had hurt associate morale, compared to about 55 percent of white midlevels. In addition, on the whole, minority lawyers were ever-so-slightly more critical of their firms’ lack of openness about finances and strategy. (On a scale of 1 to 5, with 5 being the most open, blacks, Asians, and Hispanics rated management at about 3.5, while whites rated it at 3.55.)

 “Stealth layoffs and denial does not improve morale,” wrote one Palo Alto, Calif.,-based African American lawyer. A Hispanic midlevel from Miami said this: “Help us support the decisions of the firm by informing us.” Added another respondent: “Leaving us in the dark only fosters a sense of isolation from the firm.”

 Many law firm leaders understand the concerns. “No matter what profession you’re in, people generally feel vulnerable right now,” says Hunton & Williams managing partner Wally Martinez. That’s definitely true in the legal sector, which Martinez says is facing the toughest business environment he’s ever seen. Like many firms, Hunton has shed jobs — including 64 staffers and 23 attorneys (a handful of whom were minorities) as part of budget cuts announced in the spring. This year the firm canceled its annual diversity weekend for minority lawyers, as well as other retreats, to cut costs.

 Even so, Martinez insists that boosting minority hiring and retention remains an important priority. To that end, he says, he’s been working to bolster the dialogue with the firm’s diversity committee, as well as prodding more partners to get out and talk to minority associates on a regular basis. “Communication is critical in times like these,” he adds.

 Of course, firms under financial duress probably aren’t spending a lot of time thinking about minority outreach. And in-house lawyers worry that if the economy doesn’t improve soon, still more firms will quietly abandon diversity efforts. “The pie is not expanding at the moment — it’s contracting,” says Microsoft’s Smith, who notes that almost all firms are under serious budget constraints. “Basically,” says Smith, “anything that costs money is under some degree of pressure.”

 The good news, says MCCA’s Richardson, is that at least for now, diversity initiatives appear to be holding up. According to a recent MCCA survey, the budgets for roughly 70 percent of law firm diversity programs had remained constant, though many firms did report that, like Hunton, they had canceled minority retreats. “It’s actually quite a positive story,” Richardson adds.

 Still, she and other diversity advocates worry that the recession will continue to take a toll. Minority midlevels who responded to this year’s survey are definitely feeling skittish. As one African American associate wrote in her written comments: “Please, no layoffs!”

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