Coca Cola Demands Diversity For Its Law Firms Or Risk Getting Canned

Law firm diversity scorecards, committees, summits and action plans aren’t working, according to Coca-Cola general counsel Bradley M. Gayton.

In a Jan. 28 letter to outside counsels, Gayton said the legal profession is “too quick to celebrate stagnant progress and reward intention.” Rather than celebrating action plans, he said, it’s time to demand results.

Toward that end, Coca-Cola’s legal department told outside law firms:

• They must commit that at least 30% of associate and partner time on new matters will be billed by diverse lawyers. Of that amount, at least half of the billable hours should go to Black lawyers.

• If firms can’t meet diversity commitments internally, they can work with other firms to assemble teams that qualify.

• If firms fail to meet their commitment over two quarterly reviews for new matters, their fees will be reduced by 30% for the matters going forward until the commitment is met.

• Firms that don’t meet the goals over time won’t be considered for new work.

• Coca-Cola will create a list of preferred outside law firms in the next 18 months, and ability to meet the new standards will be considered a significant factor to get on the list.

• The minimum diversity commitment will be adjusted upward over time, with the ultimate goal being that at least half of billed time will be by diverse lawyers.

Bloomberg Law described Coca-Cola’s program as “one of the legal industry’s most rigorous outside counsel diversity programs yet.”

Other companies that monitor law firm diversity have withheld only about 10% of fees for failing to meet requirements, and firms get a chance to earn back the fees, Gayton told Bloomberg Law.

Gayton told Law.com that Coca-Cola has already started to preview the program with law firms.

“There’s really broad support for what we’re doing,” he said.

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