Bloomberg Law
June 16, 2015, 5:06 PM UTC

The Capital of Diversity

Eli Wald
University of Denver, Sturm College of Law

Editor’s Note: The author of this post is a legal ethics and legal profession scholar.

By Eli Wald, Charles W. Delaney Jr. Professor of Law, University of Denver Sturm College of Law

The traditional understanding of Big Law organization, the “tournament of lawyers,” holds that firms and associates engage in a basic labor-capital exchange. Firms hire based on merit criteria, and then require a high number of billable hours; and in return associates are compensated with two types of economic capital — in the short run, associates receive a salary and bonuses, and in the long run, if they prove themselves, they’re promoted to partner.

But if the tournament supplies the familiar narrative for hiring and promotion practices, it’s overly simple, and does little to explain the markedly mixed results of more than a quarter century of Big Law’s efforts to increase diversity.

In order to better understand Big Law’s diversity problem, and especially its frustrating inability to retain and promote diverse talent, it’s necessary to takea more nuanced perspectiveon the various types of cultural, social, and identity capital that lawyers exchange for their labor.

In reality, big firms hire based not only on merit — by looking at a candidate’s law school rank and grades, for example — but also on the candidate’s extra-curricular activities or cultural capital, their networks and relationships or social capital, and facets of their personal identity, such as gender and race, which are deemed valuable to the firm or identity capital.

Furthermore, once associates have been hired, large law firms do not merely reward their labor and capital contributions with economic capital. They also “pay” their associates in capital currency, by offering various types of cultural capital, like training, or various types of social capital, like mentorship.

This capital perspective better explains under-representation of women and minority lawyers at the top, where the problem is especially acute — although diversity in entry level associate classes has greatly improved, women and minorities remain significantly under-represented among the partnership ranks. This is partly because women and lawyers of color tend to possess lower endowments of social and cultural capital compared with their white male counterparts. In other words, they tend to have access to fewer networks and mentors , and thus receive less training while at a big firm . As a result, they fare poorly in terms of promotion to positions of power and influence.

Once associates have been hired, large law firms do not merely reward their labor and capital contributions with economic capital.

Over time, the relative scarcity of social and cultural capital becomes a merit obstacle for promotion: obviously, lawyers with better mentors and training become better lawyers and develop more solid business development skills. Eight to ten years after joining Big Law, lawyers endowed with more social and cultural capital are therefore more likely to become partners and then rainmakers.

This capital framework also provides a better blueprint for promoting diversity. First, law firms must practice transparency regarding their hiring and promotion policies, acknowledging the role cultural, social, and identity capital play in their decision-making processes, in addition to merit considerations.

Second, firms must extend to all their lawyers equal opportunity to acquire and develop the cultural and social capital necessary for success within their ranks. For example, firms should pair women and minority lawyers with their most powerful partners not only in formal mentorships, but by ensuring that women and minority lawyers receive quality assignments and work closely with Big Law’s busiest rainmakers, and thus receive first-rate training.

Finally, Big Law should avoid confusing merit with social and cultural capital: a junior white male associate may outperform his competition in the tournament not because he is a better lawyer but because he is savvier about the firm’s culture and expectations and has lawyers in his networks to turn to for advice and counsel. Providing equal opportunity means that Big Law must develop assessment tools that measure both performance and the use of capital.

Everyone agrees that enhancing diversity at the top is a priority. It’s essential that lawyers at big firms have an equal opportunity to develop the requisite cultural and social capital necessary for success, and essential that firms keep these other kinds of capital in mind when developing plans for improving diversity. If Big Law fails to reward lawyers with social and cultural capital, it ends up benefiting from the identity capital of its diverse attorneys, without offering in return a meaningful opportunity for success within its ranks.

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