April 26, 2007
Law Firm Firings and Other Half Truths
How many stories have you read about the high rate of corporate firings of law firms? The truth is it doesn’t happen and it never was true. The firing of a law firm by a corporate client is a rare exception. We all know that from experience, but much of the press has been telling a different story and using “statistics to back it up.” Who said, “There are three kinds of lies—lies, damn lies, and statistics”? Actually, a lot of people said it, but it was Mark Twain who popularized the phrase. He did so for good reason. Statistics are more misused than not by those with an agenda.
Rees W. Morrison of Hildebrandt International sets the records straight in his March 2007 Legal Times article The Truth Behind Those ‘Firings’. Here is one of the opening paragraphs:
Remember all the publicity about law departments ‘firing’ their law firms? It certainly made the headlines and caused a good deal of hand-wringing at anxious law firms. But the truth is not nearly so stark. In fact, even though it’s becoming conventional wisdom that law departments commonly and increasingly fire their firms, I think that conventional wisdom is off-base.
If you read, Rees’ blog, you know he has gone after those who misuse statistics before. Clients do fire law firms, but as Rees points out, despite the gaggle of surveys, the number of firms that a given law department fires each year is a small fraction of all of its law firm relationships. As he says, we need better surveys and clearer thinking or, might I say, more truth and realism versus sensationalism in the press.
Now the hyperbole centers on diversity mandates from the corporate world. If you were to believe the press, the corporate world now hires and fires law firms based on firms meeting mandated diversity goals. A front page story in the Legal Times March issue reports that “In one case, Wal-Mart went so far as to terminate its relationship with a firm for lacking diversity.” Come now…when does a single firing represent a change in the universal law of mankind? The media's high pitched coverage of the issue even led one law firm leader to ask, “How many gays do we need?”
I think any prospective law firm client has the absolute right, obligation even, to not do business with an organization that they feel does not meet their standards. Sweatshops immediately come to mind. But we are not talking about some third world sweatshops. We are talking about the legal profession. I’m not unfamiliar with corporate halls. Most law firms that I have worked with do not stand in second place to the corporate world when it comes to ethical and societal standards.
Yes, the corporate world wants to be a good citizen, but public responsibility is only one of the eight areas in which organizations are judged by those to whom they are accountable. The corporate world has a responsibility to shareholders, employees, and others to engage the best law firms for the value. While they are at it, they want to know that they are doing business with other “good citizens”. Diversity is the right goal, but diversity doesn’t trump everything. If a law firm maintains an environment welcoming to all and that discriminates against none, they meet the test of good citizenship. In spite of the press coverage to the contrary, they aren’t likely to be “fired” for failing to meet someone's idea of the ideal diversity quota.
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