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Practice Innovations - Managing in a changing legal environment
Gray Rule
January 2011 | VOLUME 12, NUMBER 1spacer
Gray Rule
Corporate Social Responsibility Programs in Law Firms

IN THIS ISSUE:
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»Change Management in Law Firms—A Solution in Stormy Weather?
»Carnegie Report: An Update on Educating Lawyers for Real Practice
»New Faces of the Future Firmspacer
»Corporate Social Responsibility Programs in Law Firms
»Professional Development: Downtrodden but Not Defeated
»Book Review: Followership: How Followers Are Creating Change and Changing Leadersspacer
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Lisa Kellar Gianakos, Director of Knowledge Management, Reed Smith, L.L.P., Washington, DC
Corporate Social Responsibility Programs in Law Firms
Corporate social responsibility programs in law firms can be a positive force for generating opportunity and competitive advantage and recruiting and motivating staff....

In July 2009 I wrote an article for Practice Innovations called "Being Green." It offered suggestions on how to establish a green environment in your firm, one important aspect of an overall corporate social responsibility (CSR) program. Social responsibility is the idea that an organization and its members feel responsible to give back to society or improve the quality of life in society. This article focuses on the nongreen elements of such programs, how some firms are approaching CSR, and overall adoption trends in the legal profession. 

These two articles were inspired by the 2008 International Legal Technology Association (ILTA) keynote address, given by Tim Sanders, the former chief solutions officer at Yahoo. Due to population trends, there will be a decrease in talent in the near future, with a huge population reaching retirement and a relatively small pool of new entrants into the workforce. At the same time, incoming workers have grown up with recycling and climate change. These are not new issues for them, but are simply part of their generational culture. Who they work for partly defines the kind of person they are, and they expect employers to follow green business practices and to have CSR programs. For businesses that want access to the shrinking talent pool, their social reputation increasingly will become a differentiator.

According to Sanders, "Every one of us, regardless of title or position, can inspire our companies to change the way they do business, helping them to become a positive force for enriching people, communities, and the environment. When this happens, not only do we help save the world, we help save our companies from becoming irrelevant. We also become part of what I call the Responsibility Revolution. Companies that don't participate in this revolution risk becoming obsolete. Today customers, employees, and investors are demanding that companies focus on their social responsibilities—not just their bottom lines. Sixty-five percent of American consumers say they would change to brands associated with a good cause if price and quality were equal; 66 percent of recent college graduates will not work for companies with poor social values. And more than sixty million people are willing to pay a premium for socially and environmentally responsible products."1

Sanders noted that "the new cutting edge of business will be at the intersection of business and society. Social responsibility will be the most important aspect of a company's brand or identity in the future."2 Assuming he is correct, I sought to find out about the adoption of CSR within the legal profession.

CSR at Clifford Chance

I spoke with Clifford Chance's Diana Koshel, a senior business adviser heavily involved in its CSR program. "Clifford Chance has had a long-standing involvement in CSR activities, historically focused on providing pro bono legal advice, and also making financial donations in the community," she said. "Roughly five years ago, the firm undertook a rigorous review of our CSR activities and changed the way we supported the community to provide more value to those we serve by combining the provision of pro bono legal work, hands-on volunteering, financial contribution, and organizational leadership."

Clifford Chance's CSR programs are focused on three main areas: providing access to justice, access to education, and access to finance. "Through our Clifford Chance Foundation, we undertake a coordinated approach to our charitable giving, aligned with our three primary goals," Koshel said. "It is the focal point around which the firm's charity fundraising, pro bono work, and volunteering efforts come together. In the last 12 months, the Foundation committed funds of more than £2.4 million. Every office is involved in choosing which charities to support, but the firm's charitable giving extends well beyond those communities where the firm has offices. Ninety-one charities in more than 40 different countries received support from the Foundation in the last 18 months."

When asked what makes Clifford Chance's program unique, Koshel replied, "One of the CSR elements we're proudest of is the way we strive to create meaningful, sustainable partnerships in the communities where we live and work. Writing checks is important, but rolling up your sleeves and working side by side with those in need is where the greatest satisfaction—and often, the greatest benefit—comes from."

In response to the question of how much impact CSR programs have on business development, Koshel said, "Without question CSR has an important impact on business development. Clients often ask us what we are doing in the area of CSR. But it's more than that—giving back to the community is another way to relate to your clients, and when you can match up professional and personal causes and goals, it's a win-win."

My final question was whether the firm culture is highly supportive of CSR (and how it is promoted within the firm) or if it is seen as something that simply has to be done. "Yes, our culture is highly supportive of CSR," she said. "In fact, we're in the process of nominating another round of attorneys and employees from the Americas Region for the firm's Annual CSR awards. In the fall, Clifford Chance's managing partner and senior partner will again host a global video conference to honor those in the firm who demonstrate the values we believe in. This type of commitment starts at the top—and the importance of CSR is now embedded in our firm's governance and leadership structure."

CSR at Freshfields

I also spoke with James Daffurn, acting head of Corporate Responsibility for Freshfields Bruckhaus Deringer LLP. "In London our pro bono program dates back some 20–30 years and our formal community investment programs have been running for more than a decade, although the firm has a rich history of philanthropic activity dating back over 100 years," Daffurn said. "In 1999 the Partnership Council approved a proposal to formalize the firm's approach to corporate social responsibility. In 2005, we became the first international law firm to publish a CSR report."

I asked Daffurn if Freshfields has seen an increase in request for proposal questions regarding CSR. "The majority of our clients have well-established CSR programs and they also expect us to be active and knowledgeable in this area," he said. "They are increasingly seeking to surround themselves with advisers and suppliers who share the same values. As a consequence, over the past few years we have noticed an increase in the number and depth of enquiries we receive from clients about our CSR performance. In London we responded to approximately six detailed client questionnaires touching on CSR issues over the last year, and a steady stream of more informal CSR queries."

When asked whether potential hires often ask about CSR or if it weighs into their decision to work at Freshfields, Daffurn replied that he felt that a strong CSR program can have a positive impact on prospective and current employees. "We recently surveyed participants in our CSR programs to try to understand how they and the firm benefit from these activities. Respondents reported improved morale and increased job satisfaction, motivation, and commitment to the firm as a direct result of the opportunities afforded by their volunteering experience. In addition, our volunteers stated that they gain greatly from the opportunity to do something meaningful that helps others, and that through this experience they feel better about themselves and the firm that they work for. Job applicants are provided with information on our CSR programs as a matter of course if they are to be invited to interview. We know that for some of our people the firm's strong CSR credentials were a motivating factor in their decision to join us, but this is not the case for everyone."

In closing I also asked Daffurn if CSR is being done for the right reasons (moral and societal obligation) versus primarily for marketing and business development reasons. "The firm's approach to CSR forms a core part of our business strategy," he said. "The average Freshfields lawyer is aware that we are active in this area, and many have participated in our programs—approximately 35 percent of our people participated in at least one of our CSR programs in 2008–09. We have dedicated intranet, extranet, and Internet pages providing information on our programs, including pitch materials, and we promote participation to new joiners in London via induction training."

Aside from these direct interviews, my background research found that four of the five Magic Circle firms announced commitments to CSR back in 2008 or earlier and routinely produce annual CSR reports. These firms say they're responding to client demand. "You're not going to win work if you're a responsible business, but you might lose it [if you're not]," said Linklaters partner Alan Walls, head of the firm's CSR committee. "Clients expect suppliers to demonstrate the same values that they're now demonstrating." And CSR can be good public relations.3

The Impact of Minimal Adoption

U.S. firms, by contrast, have been slow to adopt CSR as such. One article on CSR notes, "While many tout strong pro bono and diversity efforts—and occasionally, environmental programs—in general they have not tried to group such initiatives under the broad umbrella of an explicit CSR policy."4 I noticed this to be true when I spoke with Reed Smith's CSR partner. All of the information provided to me was about the U.K. practice. And in fact the CSR site on Reed Smith's intranet covers the U.K. group while there is a separate pro bono site that focuses on the United States and yet another site on its Green Initiative, which is firmwide.

Edward Weeks, the partner in charge of CSR for Cripps Harries Hall, warned firms about their failure to embrace it. "Law firms do not exist in a cosy bubble: if you think that CSR is not relevant to your firm or is something that is not important, you have not been keeping pace with either your clients or public perception. CSR is increasingly forming a key part of the 'core values' of modern businesses, large and small. Clients and potential clients want to deal with other businesses that put into practice the principles of maximising benefits and minimising downsides. To fail to implement CSR is to be left out of a virtuous loop."5

Rich Baer, general counsel and chief administrative officer with Qwest Communications, made similar comments about the legal industry's general failure to change. "We're a profession that, over the last hundred years has not done anything differently, and the only industry that is proud of that. For us not to embrace change and innovation over the next 18 months, over the next 18 years, we're all going to fail."6 Malcolm Dowden, a U.K.-based environmental law consultant and solicitor, feels this is especially true when it comes to offering sustainability solutions (typically part of CSR). Following his return from the Copenhagen Climate Change Summit in 2009, he noted that "representatives from the legal sector were largely absent from the otherwise well-attended event." Dowden worries that this "places the entire profession at risk of losing out on the flurry of business opportunities on offer to those who are serious about corporate sustainability and energy efficiency."7

A related idea is that the idea that those doing CSR aren't doing so for the right reasons. Paul Watchman, a CSR expert at the London office of Dewey & LeBoeuf, said, "It wouldn't surprise me if 99 percent of firms pursued a CSR policy for cynical reasons such as PR."8 This corresponds to the Harvard Business Review article "Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility," which said that many CSR efforts are counterproductive because they pit business against society when the two are actually interdependent.9 This pressures companies to think of CSR in generic ways instead of crafting social initiatives appropriate to their individual strategies. CSR can be much more than a cost, constraint, or charitable deed. Approached strategically, it generates opportunity, innovation, and competitive advantage for corporations—while solving pressing social problems.10 But the devil can be in the details.

CSR Can Be Tricky

CSR policies do raise questions such as when they start to play a part in determining which clients a firm will represent. Clifford Chance's London pro bono partner, Michael Smyth, said, "Associates will tell you that they want to work in a firm where the client selection policies conform to their view of the world." So far, as Smyth admitted, "no one has found a perfect formula for determining which clients measure up—and which don't. Clifford Chance does turn away clients on ethical and reputational grounds. ... "11

So do CSR considerations always trump a firm's primary business of representing paying clients? Freshfields senior partner Guy Morton doesn't think so. "When you look at our relationships with clients, we're their lawyers first, and our job is to provide top-level legal services and not let anything compromise that," he said. "It's not realistic to say, if you're serious about CSR, you have to put all that in the background."12

Linklaters' Walls is fully aware of some of the "trickier questions" facing firms making a clear commitment to CSR. "'Is a tax practice ethically sound?' he asks, pointing out that firms routinely advise clients on how to pay less in taxes. 'Where do you draw the line?' he asks."13

Closing

According to Weeks, "The green and community-focused aspects of CSR can also be key points of differentiation for recruiting and motivating staff within any organisation. Attracting and retaining the best staff is increasingly problematic for many law firms, and today's graduates are passionate about CSR issues, or at least aware of their importance. If the firm they work for understands the issues and takes action then they are more likely to be attracted to the firm and will be happier, more loyal and ultimately more productive as employees."14 While it remains to be seen if and when other firms, particularly in the United States, will more fully embrace the opportunities CSR can present, there is certainly an overwhelming amount of evidence that there is strategic value in such programs, but only if approached with the correct innovative thinking that the benefits are mutually beneficial to the firm and society.


Sources

1. Tim Sanders, Saving the World at Work, http://www.timsanders.com/books/saving-the-world.html.

2. See the "Tim Sanders preview reel" (video) at http://www.timsanders.com/downloads/video.html.

3. See Richard Lloyd, Corporate Social Responsibility Catching on Among Magic Circle Firms, Law.com, July 7, 2008, http://www.law.com/jsp/article.jsp?id=1202422753677.

4. Id.

5. Edward Weeks, Why Firms Should Embrace CSR, The Lawyer, Dec. 4, 2006, http://www.thelawyer.com/why-firms-should-embrace-csr/123341.article.

6. Aman Singh, Why Are Law Firms Stalling on Sustainability?, July 8, 2010, http://blogs.forbes.com/csr/2010/07/08/why-are-law-firms-stalling-on-sustainability/.

7. Id.

8. Lloyd, supra, note 3.

9. Michael E. Porter & Mark R. Kramer, Strategy and Society. The Link Between Competitive Advantage and Corporate Social Responsibility, Harv. Bus. Rev. 78 (December 2006).

10. Id.

11. Lloyd, supra, note 3.

12. Id.

13. Id.

14. Weeks, supra, note 5.

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