Biglaw

Moneyball Meets Attorney Recruitment

Failing at diverse hiring means leaving money on the table.

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Have you ever watched a friend miss a big opportunity and then spent the next few hours doing the Captain Picard facepalm? It hurts, doesn’t it? It’s tough to see someone you care about miss out on a chance at happiness, or romance, or professional fulfillment.

What if you saw an entire industry leaving money on the table? What would you say if I told you that law firms across the country, staffed by lawyers who pride themselves on their cool, analytical reasoning ability, have been objectively missing huge opportunities and costing themselves money for literally decades, all in plain sight?

The problem is diversity, and the legal industry’s lack thereof.

The National Association for Law Placement (“NALP”) publishes an annual report on diversity in law firm hiring, and found in its most recent study that representation of minorities in law firms in 2016 still lags behind the levels found prior to 2009, back when the recession led to massive layoffs that hit those groups hard. NALP further found that, although minorities make up nearly 1/3 of law firm summer associates, minorities end up making up less than 15% of practicing law firm attorneys overall, and only around 8% of law firm partners. In short, the pipeline from law student to firm partner is leaking, and minority attorneys are dropping out of the pipeline at disproportionate rates.

This isn’t just bad politics. It’s not just bad PR. It’s bad business. Study after study after study confirms that diverse teams are better teams. They bring more ideas to the table. They view problems in different, unique, and productive ways. They do a better job of avoiding groupthink and self-defeating mentalities. Smart businesses that want to make better decisions are making a concerted effort to get more diverse voices into their structures, and smart law firms need to be doing the same.

You don’t have to take the academics’ word for it, though. Major League Baseball’s opening day was last week, and we started up yet another season of the sport that’s become consumed by Sabermetrics, the fine slicing and dicing of large swaths of data in search of an edge on the competition. Sabermetrics had been creeping up in relevance in baseball circles for decades, but it was the 2003 book Moneyball, and the subsequent movie, that pushed the concept into the general public consciousness.

Moneyball followed the Oakland A’s, a struggling team without the deep financial resources of other teams like the Yankees or Dodgers, that leaned hard into Sabermetrics. The conventional wisdom of the day put a premium on statistics such as batting average and RBI, and players who excelled in those areas were highly sought after, and paid handsomely by the market. Sabermetric analysis had left those statistics in the dust, though, and was focused on deeper, less intuitive, but wholly objective ways of valuing player performance. Oakland’s manager, Billy Beane, focused on recruiting players who excelled in those underappreciated areas, reasoning that by doing so he’d pick up players on the cheap who would outperform their paychecks, letting him compete with the rich kids on a shoestring budget.

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In the book and the movie, the A’s clear-eyed, data-driven approach leads to success and fortune. One can argue whether that’s a correct interpretation of the A’s history, but what’s inarguable is that Sabermetrics has absolutely taken over Major League Baseball. Every team in the league has made deep statistical analysis a permanent part of its repertoire. As one sportswriter put it, “In less than 15 years, the culture inside major league front offices has changed so profoundly that where once teams were mocked for using analytics, they’re now mocked for not using them.”

Let us draw two lessons from this for the legal world. First, lawyers are no better than baseball managers at making objective decisions about talent. Even the most woke of attorneys brings unconscious bias to the table. A 2014 study by consulting firm Nextions submitted a legal memorandum to 60 law firm partners and asked them to grade it. Each memorandum was the same, and had deliberately inserted errors throughout. Each memo was supposedly drafted by Thomas Meyer, a third-year law firm associate who graduated from NYU Law School, a top-tier program. The only difference was that half the partners were told that Thomas Meyer was Caucasian, and the other half were told he was African-American.

The results were striking. The law firm partners were much harsher, both qualitatively and quantitatively, to the memo produced by the associate they thought was black. Partners noted more spelling, technical writing, and factual/analytical errors, and were far less forgiving in their written feedback. While “Caucasian” Thomas Meyer was considered a “generally good writer” with potential and good analytical skills, “African American” Thomas Meyer needed “lots of work” and was “average at best.” One reviewer wrote that they “can’t believe he went to NYU.” Again, there was zero difference between the actual memoranda these attorneys reviewed — the only variable was the grader’s perception of the author’s skin color.

These unconscious biases appeared to run deep, and to have no correlation with the race, ethnicity, or gender of the partner grading the memo. This type of bias is quite likely the hardest to root out, and potentially the most damaging overall to the profession’s efforts to increase the diversity, backgrounds, and perspectives of its members.

The end result of this very human failing is that some attorneys get undervalued due to their heritage, rather than their content or character. It’s deeply unfair to those attorneys, and it means law firms are passing on hiring potential rainmakers without giving them the chance to prove what they can do.

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A law firm that wants to be on the cutting edge needs to recognize that the conventional wisdom of what makes a lawyer needs to be questioned. Focusing on increasing diversity solves the problem both by compensating for built-in bias, and by helping firms develop smarter organizational decision making structures. Diversity gets us better attorneys, which makes us better lawyers, and makes us more money.

The other lesson of Moneyball? The competition is eventually going to catch up. The arc of the universe is long, but it bends toward both justice and economic efficiency. Diversity hiring is a secret weapon that’s going to break out into the open eventually. Until it does, it’s both good policy and good business to be ahead of the pack.

James Goodnow

James Goodnow is an attorney, commentator, and Above the Law columnist. He is a graduate of Harvard Law School and is the managing partner of an NLJ 250 law firm. He is the co-author of Motivating Millennials, which hit number one on Amazon in the business management category. You can connect with James on Twitter (@JamesGoodnow) or by emailing him at James@JamesGoodnow.com.

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