Dive Brief:
- Roughly one-third of general counsel hired by Fortune 500 companies last year were ethnically diverse and nearly half were women, according to a report from the executive search firm Russell Reynolds Associates.
- These figures reflected increases in both categories compared to two years ago and came amid a slight rise in the number of general counsel hired at those large companies from 52 in 2020 to 59 in 2021.
- Russell Reynolds also reported that the GCs hired by the Fortune 500 were more likely to be outsiders with prior GC and relevant sector expertise.
Dive Insight:
The increase in diverse general counsel comes as companies have felt outside pressure to diversify their leadership ranks, particularly in the aftermath of George Floyd’s murder.
The 34% of hires from ethnically diverse backgrounds was up from 24% from 2019 onwards, according to the report.
“There is little doubt that this is the result of renewed energy and pressure for progress towards social justice, but also efforts by organizations to use every GC succession as an opportunity to search for a diverse slate of legal talent, and meaningfully diversify their leadership teams,” the report said.
The executive search firm also expects diverse GC appointments to increase moving forward, in part because of the growing diversity among board of directors at large companies.
For example, of the newly elected directors within 2021’s S&P 500 rankings, 13.6% identified as Black, according to Russell Reynolds Associates.
The number of women appointed as GCs has continued to rise as well.
The 49% of GC hires in 2021 being female was an increase from 42% in 2020 and a big leap up from 28% in 2018.
“The GC appointments of the past year reflect both our current cultural moment as well as a strong pipeline of seasoned female in-house legal executives built over many years, and suggest a positive trend towards additional diversification and, by extension, a more inclusive and equitable Fortune 500,” the Russell Reynolds Associates report said.
The report also noted a trend of Fortune 500 companies tapping seasoned outsiders as their GCs.
These candidates typically have previously served as general counsel, which mitigates the risk of placing someone in such a high-pressure position who can't effectively handle the dynamic business and risk landscape.
“There’s a sense that there is no time to learn on the job; organizations need a proven entity in this critical enterprise leadership role,” the report said.
Large companies’ desire for experienced GCs is resulting in many of them looking externally to fill the role.
However, these companies are often looking for someone who has experience in relevant sectors so they can meet important business and regulatory demands.
Outside hires also can bring a fresh perspective to the legal team and broader business, which can be particularly helpful during transformation efforts and crisis management, according to the Russell Reynolds Associates report.
