For several years, Russell Reynolds Associates has been collecting and examining data relating to prior experience and path taken for Fortune 500 general counsels, with a particular focus on females and their representation at the top of the legal profession.
The number of female general counsels in the F500 continues to grow, with women now holding the top legal job in 28 percent of companies, up from 26 percent last year. This is particularly poignant against the backdrop of the #MeToo movement, with workplace diversity issues taking center stage and receiving more attention than ever before. Typically, underrepresentation of women is never more apparent than at the very top. Women now hold just over a quarter of general counsel positions among the F500, but when viewed together with other C-suite roles (5 percent of CEOs and 13 percent of CFOs are female), we realize that the underrepresentation of females in the top legal position is part and parcel of a broader issue.
It is increasingly a source of frustration to companies, boards and shareholders that the percentage of women holding C-suite roles remains intractably low. Meanwhile, it is well accepted that having diverse perspectives, experiences and leadership styles—which women often bring to a team—strengthens that team’s ability to problem-solve and create high-performance organizations.
With that being said, the rise in female general counsel appointments is promising, and the upward trend paints an optimistic picture for the years to come. In 2013, just 28 percent of Fortune 500 companies with open general counsel positions filled them with female candidates. In 2017, that figure was 38 percent, and for 2018 to date, it looks similarly promising so far at 36 percent (9 out of 25 new hires so far this year)—a significant increase over the last five years.
The proportion of females promoted internally into the top legal spot has remained relatively consistent when comparing the years since (and including) 2015 with years previous. Arguably, one of the best ways of improving diversity at the top of organizations is to focus on the leadership pipeline. As organizations increasingly think about and prioritize succession planning, the proportion of women promoted internally will likely increase.
Comparatively, the external picture is more positive. The proportion of women hired externally has nearly doubled in recent years. Now, more women are being hired into the GC role from outside than are being promoted internally.
When general counsels are hired externally, there are notable differences between genders in terms of where the incumbent is more likely to have come from. Men are twice as likely to move over from partner positions at law firms, whereas women are more likely to move from another corporate firm, either from the top position or roles lower down.
When the source of external hires in the last three and a half years is compared with previous years, we notice a change in trends in recent years. More than eight out of 10 (82 percent) of external candidates hired by Fortune 500 companies since (and including) 2015 have come to the job with in-house legal department experience, up 15 percentage points from earlier years. Legal professionals in corporate environments gain experiences and develop skills that are very different from those gained and developed at law firms. They are able to get closer to and develop in-depth knowledge of a single business and set of stakeholders. They are required to confront a wider array of topics where they likely have limited expertise and must operate under significant ambiguity, using their best judgment, marshaling resources and taking myriad calculated risks which law firms are typically not at liberty to take or recommend. They are also required to build new team leadership skills over larger and more dispersed teams with a wider variety of professional skill, experience and motivation. Consequently, when hiring for senior legal roles, companies are increasingly turning to individuals who have previously been exposed to the challenges associated with in-house legal roles.
As a result, the proportion of external hires coming from law firms has declined. In the past, over a quarter of external general counsel appointments were partners hired from the top ranks of law firms, but this has fallen to just 13 percent of hires. This decline has been seen most prominently among men, with the proportion of men coming from law firms falling from 29 to 15 percent. Gender diversity at the equity partner level of law firms is worse than at corporates. Just 19 percent of equity partners are female, according to data from The American Lawyer magazine, nine percentage points lower than the percentage of female F500 general counsels.1 The percentage of women holding equity partnerships in law firms has hardly budged in a decade despite years of women graduating law school in near to equal numbers as men. In fact, 2016 marked the first year in which women made up the majority of law students, holding just over 50 percent of seats at accredited law schools in the United States.2
What is particularly interesting is that, despite the increase in the proportion of female external hires from in-house positions (76 percent pre-2015 to 89 percent since), a decline was actually seen in the proportion making lateral moves. All growth was the result of a significant increase in the proportion of women coming from other roles in-house. This trend would suggest that organizations are increasingly willing to view an accumulation of different experiences in the in-house environment—from board and senior team exposure to regulatory, commercial, team leadership and international experience—as a sign of readiness to assume the top legal job or an acknowledgement of all that general counsels are now asked to do in large corporations.
We have seen hiring prospects for females improve as a greater proportion of women are gaining in-house experience and competing for the top legal role. Alongside improvements to the candidate pool, the increased focus on diversity and inclusion means we are set to see a continuation of the trend of women being hired into the top legal job.
CYNTHIA DOW is a Managing Director who leads the Legal Officers Practice at Russell Reynolds Associates and is also a member of the Consumer and Board & CEO Sectors. She is based in New York.
POLLY BORROWS is a Knowledge Consultant in the Corporate Officers Practice. She is based in London.
- The American Lawyer magazine, “Female equity partner rate is at all-time high (but it’s not that great)” (September 2017).
- New York Times, “Women Make Up Majority of U.S. Law Students for First Time” (December 2016).