Microsoft Launches Groundbreaking Diversity Initiative

Microsoft Corp. announced a new, unique diversity initiative that affects its 17 so-called Premier Preferred Provider (PPP) law firms. Law firms that demonstrate successful diversity practices will be eligible for bonuses. The program tracks the diversity success of each law firm in one of two ways.

The first formula focuses on diverse representation in hours worked for Microsoft, while the second focuses on diverse representation in the firm’s U.S. offices, taken as a whole.

Under the first method, Microsoft will pay a two percent bonus if the law firm demonstrates a two-percent increase in the number of hours worked by diverse attorneys as a percentage of total attorney hours worked on Microsoft matters, compared to the same time period in the preceding year.

The second method will pay the two percent bonus if the firm achieves a .5 percent increase in total diverse attorneys as a percentage of the firm’s total attorneys in the U.S., compared to the previous year. It applies to partners, associates, of counsel and any other full-time or part-time permanent attorneys, but does not apply to contract attorneys.

Law firms will have a choice between the two methods but must stay with a single formula for one year.

Microsoft undertook the initiative for financial reasons. “First and foremost, we believe that diversity in our legal teams is a business necessity. The reality is that we cannot be effective if we cannot understand and appreciate the interests and needs of the incredibly diverse individuals who make up our stakeholder groups, from employees and customers to business partners, regulators, and judges,” Brad Smith wrote in an email to PPP firms. He also noted the slow progress of the nation’s large law firms in increasing diversity.

The program is still a work in progress. Microsoft plans to evaluate the program after one year and will consider increasing the two percent incentive.

Some of Microsoft’s preferred law firms are K&L Gates; New York-based Weil, Gotshal & Manges; New York-based Sullivan & Cromwell; Washington-based Arnold & Porter; Heller Ehrman; and Washington’s Covington & Burling.

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