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Microsoft’s Outside Counsel Can Earn a Bonus for Increasing Diversity

Posted Jul 25, 2008, 06:26 am CST
By Debra Cassens Weiss

Microsoft will pay its preferred outside counsel a 2 percent bonus if they meet diversity goals.

The program allows law firms to earn the annual bonus in two ways, reports The BLT: The Blog of Legal Times. One way is to increase the number of hours that women and minorities spend on Microsoft matters by 2 percent. A second way is to increase the number of women and minority lawyers working at the law firm by .5 percent.

Contract lawyers and lawyers from outside the United States cannot be included in the numbers, the National Law Journal reports.

Microsoft’s in-house lawyers are also eligible for bonuses tied to diversity improvements made by the outside law firms, according to the NLJ story.

Microsoft’s 17 preferred legal providers are eligible for the bonuses. Microsoft identified its nine “premier preferred providers” as Arnold & Porter; Covington & Burling; Davis Wright Tremaine; Heller Ehrman; K&L Gates; Perkins Coie; Sullivan & Cromwell; Weil, Gotshal & Manges; and Winston & Strawn.

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Title: Microsoft’s Outside Counsel Can Earn a Bonus for Increasing Diversity


Comments

  1. Posted by Anthony - 4 months, 1 week, 23 hours, 51 minutes ago

    Sounds laudable but how can law firms be getting paid more to hire and use diverse minorities?  Isn’t this unlawful reverse discrimination?  If they work on government contracts, I think we have a Title VII issue here. Also, isn’t formalizing a company policy to pay more for the same service validating cost-inefficiency, or worse?  If so, can’t the Microsoft stockholders bring a derivative action for corporate waste?  Or something else?  Can any corporate litigation types comment here?  At a minimum, I’d want to pay $X for doing the job, not X+2% for getting the same job done by a minority firm.

  2. Posted by abaJ reader - 4 months, 1 week, 22 hours ago

    Anthonyflame*cough*flamerflamer*cough*

    Ahh yes, the good ole over exhausted reverse discrimination argument. Love the us (white) & them (minority) philosophy, washed over with some basic math. That’s great.

    But I believe the USSC did make a little point about remedying past wrongs… even if people like Anthony don’t think they exist - or worry that the remedy will be at his expense. Me me me!

    It’s great to see MS take a stand by creating an incentive to include groups of people that aren’t really wanted in the legal industry… ok, maybe that’s a bit harsh. Then again, you tell me what other professional industry has SO many ethnic/ gender legal associations? Today it might seem like today such orgs are used to address cultural community legal issues, but originally those groups were created due to the barriers faced by minority and female attorneys trying to enter the legal “club” (remember, Sandra Day O’Connor’s first job offer out of Standford was for a legal secretary position. We’ve come a loooooong way baby….)- and today we have to ask, how much have we improved? Such overlooked groups, and those “last hired, first fired” are definitely made up of women and minorities. If it wasn’t for big companies like MS taking a stand to remind good ole boy firms that world - and clients - are not, in fact lily white, very few of these employers would be going out of their way to recruit and and include others that don’t fit the “pigment/gender mold.“ Of course, some employers in certain regions who just want that bottom dollar raked in from associates, irregardless of their background, but that is not reflected in the whole industry.  The reality is that these groups have been fighting for equal rights for decades… and the fight continues. Sure the colored signs, restrictive covenants, open gender discrimination and blatantly divisive hiring practices (as in “the position has already been filled” game - depending on what color your are…) seem to have diminished….. but the problems of intentional exclusion in more subtle forms still exists.

    But I’m envious of you Anthony, since you don’t really have to worry about any of that.

  3. Posted by Oscar - 4 months, 1 week, 19 hours, 48 minutes ago

    The legal industry has these groups because well over 95% of them are liberal and tend to push for such groups. These initiatives are the result of making choices on the basis of race rather than performance or merit. If diversity naturally enhanced the market, the market would respond accordingly.

    The undeniable truth is that for law school and the job market, racial diversity regardless of merit is an advantage and being white is a disadvantage. (of course that isn’t to say that there aren’t highly skilled and fabulous associates that are very good and racially diverse - the argument is at the margin).

  4. Posted by lawyer - 4 months, 1 week, 19 hours, 21 minutes ago

    abaJ reader,
    What does irregardless mean? I’ve heard of irrespective and regardless, but irregardless?? I don’t think that’s a word. I couldn’t get past that in your post.

  5. Posted by associate - 4 months, 1 week, 16 hours, 21 minutes ago

    abaJreader,

    Nice rant.

    That basic math you refer to is called profit.  It’s how the big boys make so much more money than you and why CFO’s get paid.

    I’d hazard a guess that the “basic math” problem is why your job doesn’t pay as much as you think it should, not any perceived “past discrimination” problems.

  6. Posted by Marc Bernstein - 4 months, 4 days, 3 hours, 23 minutes ago

    I take issue with abaJ reader’s grandstanding.  The very definition of ‘white’ is suspect, as southern and eastern Europeans, as well as Jews, weren’t included in this so-called old-boy network. 

    They were only included in the definition of “white” after The Civil Rights Act of 1964, when something could be taken away through affirmative action if you were considered “white”.  It wouldn’t be taken away from the Rockefellers, Vanderbilts or Kennedys , of course.  Affirmative action was set up to take opportunities away from lower and middle class whites, not the elites whose families actually benefited from slavery and segregation.

    So, abaJ reader, keep deluding yourself with your simplistic understanding of ‘past discrimination’.  The system needs people like you who will drink a full glass of the Kool Aid.

  7. Posted by LawStudent - 4 months, 1 day, 1 hour, 52 minutes ago

    Few companies are wealthy enough and have stockholders disinterested enough to permit the liberal management of a publically held firm to reduce its bottom line because its management thinks the payment is a social good, instead of a financial good. Microsoft won’t sell more software by strongarming law firm vendors into hiring more minority lawyers. Would Microsoft really like its vendor law firms to turn over all of the business it gives them to women and minorities? Might not produce a result of which the stockholders would approve.

  8. Posted by esquire - 4 months, 1 day, 1 hour, 12 minutes ago

    Nice, LawStudent.  Also nice that you didn’t care to attach your name to your comment; worried that your first interview out of school might be with a minority or woman? 

    Although I am certain that we all appreciate the totally refutable and convoluted logic in your comment, I challenge you to tell us all your name.  I always am sure to Google people before I make any hiring decisions, and I want to be sure that you don’t come across my firm’s doorstep.

  9. Posted by Bob - 4 months, 1 day, 19 minutes ago

    I don’t really want anything to do with either side of this worn-out debate.  Still, “esquire”... would you mind sharing YOUR full name and the firm you recruit for?  Because speaking of worn-out… I don’t think I’ve ever seen an ABA Journal article that isn’t about BigLaw salaries, flip-flop in the office, or racism.  Accordingly, I’m a bit suspicious of any practicing attorney who still reads this stuff and didn’t lose interest while in law school… and I’d probably prefer interviewing with firms where attorneys have something better to do with their day.

    Besides, I’m not too interested in personal injury law regardless.

  10. Posted by Jade - 4 months, 23 hours, 20 minutes ago

    Oscar, the market IS responding. Microsoft isn’t being forced to do this. They’re being smart!

  11. Posted by Ms.Golightly - 4 months, 20 hours, 35 minutes ago

    It is sad that many individuals still want firms to operate the old fashioned way. Microsoft did not meantion any support at all what-so-ever about promoting reverse discrimination. Your opinion is totally based only on feelings and does not represent true fact. What Microsoft is encouraging is a great thing and I would love to see more minorities in some of the best firms (and schools) which can help make the elegal field a better place for all people, regardless of the color of one’s skin. If you feel this is absolute racism… Show some actual statistics of caucasian hiring percentage go down. Do note, that these are applied to large firms with a percentage of <1% minority. You also forgot to note that the minority catagory includes more than one race. Black, Hispanic, and Jew! Caucasian covers one race. Minority three. That means three different groups must fit in 2%! If anything, it should be higher! I am a female and I am glad that the doors are opened for women who actually want to make a difference. Go Microsoft!!!

  12. Posted by Stephanie - 4 months, 20 hours, 20 minutes ago

    I am happy to see Microsoft doing this.  Many in the legal field have been trying to find different and creative ways to increase diversity in the legal field (by the way a diverse candidate is anyone is not a heterosexual, white male, and sometimes also includes economic diversity amongst white men).  I heard of the concept that Microsoft has put into practice at the Louisiana State Bar Association’s Diversity Conclave.  It makes sense if you think about it; corporations have done far better at increasing diversity than law firms.  They are not punishing the firms or taking their business away, they are simply offering an incentive to get with the program called DIVERSITY.  On another note, it saddens me to see such opposition that people have for anything that means opportunities for others not like themselves.

  13. Posted by Mike - 4 months, 19 hours, 36 minutes ago

    I don’t understand this opposition to increased hiring of minorities in the legal workforce.  If anything, people should be opposed to the current hiring level of females rather than ethnic minorities.  Sixty-percent or more of law school grads these days are female… they take up spots that otherwise would have gone to male candidates… and 3-5 years later they crap out a kid and step aside for “work-life balance” reasons.  All firms know that they’re typically wasting their time and resources on this training, and setting themselves up for inevitable attrition problems, but they have to pretend that it doesn’t exist so as not to look mean.  Compared to that, asking firms to keep a few token minorities on the payroll is a drop in the bucket.

  14. Posted by Anonymous - 4 months, 19 hours, 28 minutes ago

    1.  Microsoft isn’t being “smart.“  They’re doing it because they are pressured to do things like this by, e.g., the group that tried to require every major legal department to sign the diversity “call to action” that occurred a couple of years ago.  If you don’t sign it, you’re branded as a racist organization and suffer various consequences in the marketplace (and, perhaps, in the legal sense).

    2.  To those wondering why we post anonymously - we do so because if you have these opinions, you’re deemed a racist, “backwards,“ unsophisticated, hateful, and so on.  You can see that from some of the reflexive liberal comments given here—by merely expressing opposition to programs that pay money based on the race and gender of your lawyers, you are deemed as “hateful.“

    3.  To Stephanie—It quite literally blows my mind to read comments like yours, saying that you are “saddened” to see that people are opposed to “anything that means opportunities for others not like themselves.“

    I am saddened to see that we can’t have a full discussion about, including disagreement with, initiatives that discriminate on the basis of a person’s gender or skin color.  If you disagree with me, fine, but don’t pull out the old “I’m saddened at your backwards thinking and racism” nonsense.

    The people who oppose this are not opposed to opportunities for “others not like themselves”—the people who are not like me have the same opportunities I did, if not more!  I say that not in a “hateful” sense, but in simple recognition of the fact that I went to public schools, worked to pay for a lot of it and took out loans for the rest, and did well enough to get a good job.  In fact, I was summa cum laude in college and didn’t get any scholarships in large part to having white skin.  I got notices constantly for scholarships for minorities in my degree program, and I knew personally of several minority students who received “merit” scholarships for having a 3.0 GPA!  My ancestors were German immigrants who didn’t even speak English until two generations ago (during the WWII era, in fact, when they were referred to derogatively in various circles), so I certainly didn’t benefit from slavery or racial discrimination in this country, nor, I believe, did my ancestors.

    What makes me sad is knowing that my infant son is having to grow up in a world that, like the one I grew up in, was full of scholarships, mentoring programs, special fellowships, recruiting initiatives, and so forth, all for minorities, and that he (as a normal middle class white guy) will not receive those same opportunities.

    Consider the alternative arguments and understand that maybe—just maybe—it is possible to be opposed to discrimination on the basis of skin color and race for reasons other than “hate” or “not wanting to see those who do not look like you have opportunities.“  That’s not it at al—I think everyone should have equal opportunity, as our laws ensure.

  15. Posted by Jon - 4 months, 19 hours, 26 minutes ago

    Hey, here’s a memo—quit trotting out the old “it’s sad” arguments!  All anyone should want is equality of opportunity ... the perpetuation of racial discrimination certainly won’t bring an end to thinking about things in terms of race, as 40 years of failed affirmative action programs have shown!

  16. Posted by splaw - 4 months, 18 hours, 52 minutes ago

    The equaslity arguments are nice but…Do you really think that it is not smart business to increase diversity?  What about diverse clients and diverse juries?  Do you think corporations are not aware of the world they compete in?  Shouldn’t law firms join them?

  17. Posted by John Buso - 4 months, 18 hours, 46 minutes ago

    I was surprised to find out from anonymous that there were no scholarship opportunities for the “normal middle class white guy.“  Curiously, the vast majority of the lawyers in the Microsoft preferred law firms are normal middle class white guys.  Perhaps it is not, “in large part due to having white skin.“  However, the comments by anonymous makes one wonder how so many of them ever got though school at all.

  18. Posted by Ms.Golightly - 4 months, 16 hours, 5 minutes ago

    I agree with you John Buso! There is no racism promoted against white guys of medium income. Even white middle class men can qualify for these amazing grants. Here is a few examples, “Being an A+ student” I support Microsoft for such a smart choice and will continue to purchase their products in support of their business model. I hope by the time I graduate I can see more diverse students graduate with me. I think people of a diverse background should have the same opportunity like us! Of course, everyone is entitled to an opinion.

  19. Posted by LawStudent - 4 months, 1 hour, 56 minutes ago

    There is a growing conflict in this country between freedom and equality. Political correctness as epitimized by the speech police has become a weapon of the left. Equality is their flag. The willingness of otherwise intellegent people to bow to this tyranny is not a good sign for the future for our nation.

  20. Posted by John - 3 months, 4 weeks, 2 days, 2 hours, 56 minutes ago

    This is a clear violation of Title VII . In the 60’s there were many federal decisions where the customer insisted that the company not send an African-American to service the account.  The courts held that the company violated Title VII if it complied with the customers’ demand.  Here, the customer, Microsoft, is PAYING the employer, the law firm, not to send white males to represent them.  If the firm complies, I think it is clearly violative of Title VII.  Unfortunately, these pratices will never be challenged because it would be “politically incorrect.“  The tenor of this thread demonstrates that “reverse discrimination”  cannot even be discussed for fear of the consequences.  It is indeed odd that it was ok to complain and sue over discrimination against minorities and women but it is not ok when white males are the victims.

  21. Posted by Veronica - 3 months, 4 weeks, 7 hours, 20 minutes ago

    Don’t you know how many white males represent Microsoft. By making a mere request to place only 5%... That is everything that is beside white male. That means that they are okay with having 95% white… And you actually call this discrimination? Further more, the firms are still hiring white males, therefor, your opinion in regards to a violation in Title VII appears to be irrelevant.

  22. Posted by Jim - 3 months, 4 weeks, 7 hours, 11 minutes ago

    John,

    Your logic is flawed.  MS does not require firms to avoid sending white lawyers.  Instead, MS provides incentive for firms to increase its diversity.  I think there is a difference there.  Actually, I personally know quite a few white attormeny servicing MS right now.  I have not heard that any of the them being rejected by MS.

  23. Posted by John - 3 months, 4 weeks, 1 hour, 41 minutes ago

    It doesn’t matter how small the percentage is.  If a firm does refuses to send a single white male attorney because of his sex and race that is a violation of Title VII.  Microsoft ‘s   PAYING   a bonus to firms if they don’t send a white male attorney is a clear violation. In the Title VII cases I referred to, there was no PAYMENT not to send African-American employess to the companies.  There was just a request which was honored by the all-white companies.  So the PAYMENT of an “incentive” not to send a white male attorney is really much more blatant and egregious.  How would you feel if Microsoft said they would PAY a firm an “incentive “ if they didn’t send a woman or minority attorney?  Sounds like discrimination doesn’t it?  I bet you would bristle with anger and file a lawsuit.  In the old days, the goal was to prevent minorities from servcing the company so it would be all white males involved. The result was a finding of discimination against the minorities.  Now the goal is to exclude white males from doing something they would otherwise be qualified to do: represent Microsoft.  The fact that the stated lofty goal is “diversity” doesn’t immunize the discrimination on the basis of sex and race from Title VII liability.  Otherwise, the white people in the 60’s who requested that the companies not send African-Americans could have avoided liability under Title VII by saying they just wanted to have a “comfortable atmosphere in their offices.“ Or that they didn’t want any “trouble.“  Now that would never have been a defense would it?  So, why would the stated goal of “diversity” be a defense?  Plain and simple: PAYING a company to exclude a white male from an assignment is discrimination of the highest order and magnitude.  Read your history and read your law.

  24. Posted by Hadley V. Baxendale - 3 months, 4 weeks, 1 hour, 37 minutes ago

    When a law firm capitulates to a client’s demand to staff a project along race or gender lines. the firm is violating Title VII.  If a firm advises a client to do this, it is committing malpractice.  Ironic, then, that firms are so beholden to the “big client” that they will do that which they would not advise their clients to do.

  25. Posted by John - 3 months, 4 weeks, 56 minutes ago

    Hadley- Good point.  But these days it is “politically incorrect “ to dare utter that this is discrimination.  As you suggest , the big firms are so hungry for business that they wouldn’t dare even “peep” about this for fear of arousing the ire of Microsoft and others who demand this 21st century brand of discrimination.  The lawfirms have been co-opted (and now) financially penalized if they don’t tow the line and go along with the program. These days, all sound legal analysis goes right out the window when the talisman of “diversity” is invoked.  It is just a sign of the times. The view nowadays is “you white males had it good for a long time—now it’s our turn!“  They don’t wwant to hear about the law.  But the shoe is on the other foot now as far as liability is concerned. They forget (or in the case of these younger posters, never even knew) that the white male-operated companies got hit bigtime with discrimation lawsuits for sex and race discrimination in the old days.  My hope is that someone will have the courage to challenge this shameless “stick-up” of companies.


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