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Doing it Better: Diversity at Bank of America

Image: The Bank of America headquarters in Charlotte, NC

W hat gets measured does not necessarily get managed. Obtaining information is not the same as acting on it. But measurement is a good starting point. Despite positive public pronouncements, few legal departments take the next logical step of measuring diversity. Even fewer take their commitment to diversity one step further. Bank of America is a model for actively managing outside counsel relationships to continuously improve against a diversity baseline.

This is not a story of raw market power and an important client's stated desire that outside firms simply 'do better.' Rather, it is a story of structured dialogue, shared commitment, and continuous improvement. What began as a general statistical report has grown into an enduring project that better aligns Bank of America and its most valued law firms. "Bank of America is a company that champions a culture of diversity and inclusion both internally and externally," says Bank of America's Associate General Counsel and Senior Vice President Lani Quarmby, who oversees outside counsel management and is a member of Bank of America's Diversity and Inclusion Business Council ("DIBC"). 

The story starts with measurement. For more than a decade, Bank of America's legal department has measured how women and minorities are staffed on Bank matters. As Quarmby observes, "for any legal department, in order to solicit change and move the needle on diverse staffing by law firms, the important first step is to ask the question and relay the importance of diversity and inclusion from the client's perspective."

In 2012, the Bank expanded its metrics. The Bank now obtains granular data on staffing, work allocation, and fee distribution. The analysis is multidimensional, looking at number of timekeepers, dollars going out the door, seniority, and distribution by gender, ethnicity, sexual orientation, and disability. Bank of America's legal department not only captures what percentage of their work is being handled by diverse attorneys but also tracks the attorney level. "Tracking staff diversity by level is an important piece because we may see that women and minorities are not being promoted to the partner level, or a law firm fluctuates on its staffing of women, which may indicate a retention issue," says Quarmby.

Measurement is a means, not an end. The next step is equally essential. Quarmby explains, "Once we have the data, we engage directly with the law firms in the performance review process and further inquire about what specific challenges are facing the firm with respect to recruiting, mentoring, retaining and promoting diverse attorneys. We then reward those firms who stand out among their peers through the law firm award."

Going beyond numbers, the Bank's legal department takes a relationship-based approach premised on partnering with its law firms to reach mutual diversity goals. The Bank sends out law firm self-evaluations and engages directly with diversity committees to inquire about the firm's internal diversity goals, community outreach, and opportunities to partner with the Bank on diversity and inclusion initiatives. Key to this self-evaluation is a question that recognizes the dual responsibility of the law firm and the client: "What could Bank of America do better to enhance your Firm's diversity performance/metrics for the coming year?"

Recognizing Excellence Through Diversity

The commitment to creating a diverse and inclusive environment starts at the top with Bank of America's CEO Brian Moynihan, who also chairs the Bank's Global Diversity & Inclusion Council. Quarmby credits the innovative leadership of the legal department's initiative to Vice Chairman and Global General Counsel Gary Lynch, and current and former DIBC executive sponsors Amy Littman and Bill Caccamise for the success of the program. "We set the highest standards for ourselves and for the law firms with whom we do business," Lynch says. "We require those firms to not only provide exceptional legal services in a cost-effective manner, but to do so through staffing and related means that exemplify our joint commitment to diversity."

It was Lynch who decided that the Bank of America legal department should institute an annual diversity award, which he personally presents. Firms that demonstrate the deepest commitment to diversity are made finalists for the award. All finalists are interviewed and subsequently recognized for their achievement at a celebration in New York. The winner is selected based upon specific criteria including:

  • Statistics on how the firm staffs Bank matters with diverse attorneys (both women and minorities);
  • The law firm self-evaluation regarding the firm's commitment to diversity and inclusion; and
  • An interview with the law firm finalists to discuss the firm's
    • internal culture for recruitment, retention, mentoring and promoting diverse attorneys 
    • external outreach to the community, including their work with affinity groups; and
    • the firm's direct partnership with the Bank to further its diversity goals and mission.

Poor performers are not just left off the invite list to the awards banquet. Progress on diversity is addressed in each firm's annual performance review. More than a judgmental wag of the finger, Bank of America actively engages with its firms and works collaboratively with them to develop performance improvement initiatives when appropriate. Understanding they are falling behind their peer firms has a substantial motivational impact on legal overachievers. "Law firms are competitive by nature. So any constructive comment on areas for improvement is usually enough to motivate change within the firm," remarks Quarmby.

Starting at Home

The Bank of America legal department holds itself to the same high standards. DIBC executive sponsor and Deputy GC Littman is pleased with the progress, "We have made significant strides but there is always room for improvement. We remain fully committed to seeking additional means of recognizing and engaging with minority-owned law firms, sponsoring affinity groups and requiring diverse legal teams from our majority law firms while providing superior legal services."

The Bank of America legal department is itself an active participant in the National Association of Minority and Women Owned Law Firm's (NAMWOLF) Inclusion Initiative. In addition, the Bank's summer program of 19 interns is composed entirely of diverse future lawyers dividing their time between the Bank and its primary firms. The splitting of time is just another way that the Bank uses diversity to create better alignment with its firms. Quarmby maintains, "the firms provide the summer interns with traditional research and writing projects, while the Bank provides an inside perspective on our business and the client-side view of the client/firm dynamic. The insight these future lawyers gain is of great value to them and their law firm sponsors."

Bank of America's legal department is an outlier in many respects, including the depth of their commitment to diversity. Truth be told, very few in-house legal departments have the market power or the internal resources to pursue such a comprehensive program. But some do, and should. At the very least, most medium-to-large departments have the capacity to ask, measure, and voice displeasure if their diversity goals are not being realized. One major client can change the conversation. Clients acting collectively can change the profession. 

A Conversation with Lani QuarmbyLori Quarmby

How has the Bank of America Legal Department's approach to diversity changed over time?

"2012 was a turning point for Bank of America. In addition to the change in reporting with our law firms and the law firm award, we took more of a relationship-based approach with our law firms that resulted in better engagement. We have seen an increased commitment year after year which can only be the result of targeted communication regarding our diversity goals and mission and shows the firms that we are serious about implementing improvement and change."

What is an important lesson about taking an empirical approach to diversity?

"First, establish a baseline. Then track progress against that baseline. Start with reasonable goals and let the goals evolve over time. Bank of America's information requests are now very extensive. We are a data-driven department. However, it is important for others to realize that results do not happen overnight."

How does the diversity initiative fit with your other initiatives, such as the Litigation Roundtable?

"Our approach to any new initiative is strategic. It must align with our overall goals. We pride ourselves on being innovative in number of areas such as convergence, budgeting, vendor management, and relationship-based fixed-fee negotiations. Our General Counsel Gary Lynch understands that each initiative is important in its own right, but it does not need to be at the expense of a diverse legal team."

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