ACC: legal departments evaluate internal diversity through new hires

In the time that diversity and inclusion have been a main focus for many businesses, the legal community leaders have been very vocal about their role in providing a more inclusive workplace for all their employees. However, a survey done by the ACC and Major Lindsey & Africa showed that only 29% of legal departments surveyed track internal diversity.

The survey was conducted between March and May of 2021 and had a total of 493 legal departments in 24 industries in 30 countries participate.

Among those departments that track diversity metrics, 94% evaluate diversity among new hires, followed by promotions at 55%. The percentage of departments that track diversity metrics and that also have a formal strategy to improve in this area, with actionable measures and tangible consequences, is around 47%.

The ACC/MLA Law Department Management Benchmarking Report is a top-tier resource for the in-house counsel community to track and measure progress on numerous metrics,” said Veta T. Richardson, president & CEO of ACC. “The report gives law department leaders a wealth of data for peer comparisons and benchmarking across a variety of metrics in order to assess performance, results, and efficiency and take a data-driven approach to charting the legal operational and managerial goals to be achieved.”

“Since its inception in 2019, this report sets the industry standard for structuring and maintaining a high-performance legal department, said Greg Richter, VP, Retained Search and Advisory Services for MLA.  For the first time this year we asked companies about their Diversity and Inclusion efforts, which is becoming an increasingly important metric within organizations.

Other key findings

Cost Per Lawyer and Use of ALSPs Remain Relatively Consistent

Differences in spend are substantial across company sizes. Legal departments in small organizations record a median total legal spend of US $1.2 million, while those in mid-sized organizations report a value of US $8.4 million, and larger legal departments report a median of US $64 million in total legal spend.

One metric that is relatively consistent across company size is cost per lawyer hour. The results across company sizes are similar, with the median values set at US $113, $131, and $123 for small, mid-size, and large companies, respectively.

Company revenue size shows large differences when reviewing the number of law firms and alternative legal service providers that participating organizations engage. Despite the growing focus on ALSPs, only 12 percent reported engaging more ALSPs in 2020, compared to 29 percent reporting an increase in law firms used.

Legal Department Structure and Scope

Results show that in 80 percent of departments, the CLO reports directly to the organization’s chief executive officer. In 92 percent of companies with over $10 billion in revenue, CLOs reported directly to the CEO. CLOs in all participating pharmaceutical companies report directly to the CEO, followed by finance and banking (88.9 percent) and energy (86.7 percent).

Staffing Metrics: Lawyer to Legal Operations Professional is 7 to 1

The report found departments tend to have at least one paralegal once there are three lawyers, an admin once there are five lawyers, and a legal-operations professional once there are seven lawyers.

Richardson continued, “With nearly 500 legal departments participating in the study, there is sufficient depth of data for law departments to engage in custom benchmarking against a defined peer group using their preferred combination of characteristics, including industry, revenue, and geographic footprint. We are grateful for MLA’s partnership to support the ACC research team to bring such a valuable report to today’s law department leaders.”

To view the executive summary of the report click here