November 5, 2018

More on “Do Boards Really Talk About Race?”

A few months ago, I blogged about the dominance of white people in our industry. I heard some nice feedback. But I particularly liked this one from Carl Hagberg because he offered these concrete suggestions:

I agree that boards – and white people in general – are afraid to talk candidly about race and this needs to stop. In response to your request for ideas, here are a few things that enlightened companies can be doing about it:

– A growing number of companies have been demanding that the law firms they use must have a significant percentage of women and minority group members on the teams for every single company project they are awarded. Many law firms are struggling hard with this – which is precisely the point.

– Smart companies are bidding-out a growing percentage of their legal work – and not only demanding the same degree of diversity for the teams assigned to their projects, but awarding extra points in the evaluation of bids for pro-bono work – where it is easy to specify that diversity efforts and pro-bono work with minority groups will receive extra “extra points.”

– Companies should also be demanding – and rewarding strong diversity efforts – and actual results – at ALL of their service suppliers – like transfer agents, proxy solicitors and advisors, financial printers. And yes, in the selection of Inspectors of Election too.

I know that is extremely hard to diversify. I know from my own experience how hard it is – and why. Take a look at my article about “The Prevalence of Old White Men at Shareholder Meetings.” But if the clients don’t push harder for change, nothing WILL change!

And then Jenner & Block’s Jolene Negre sent me these common approaches:

– Mansfield Rule – Consider diverse candidates for open leadership positions (including board seats)

– Diversity training to give boards the tools they need to think and talk about race as it relates to their businesses

– Some major companies offer financial incentives to law firms staffing those companies’ matters with diverse legal teams (and penalize firms that do not)

“UTBMS”? What The…

Are “matter codes” frustrating – or practical? A new manual – “Best Practices for Using UTBMS Codes for Merger & Acquisition Transactions” – shows how codes can be used in the deal space. Having not been in a firm now for decades, I had no idea what “UTBMS” was. And my initial response was “there needs to be a manual for this!?!”

But I asked around – and here’s what I learned. “UTBMS” stands for the “Uniform Task Based Management System.” It’s how many big company clients wants you to enter your time now so that their outside consultants can flyspeck everything you bill – and it can be helpful for GCs who love all this data analytics stuff. It takes forever to enter your time now – client, matter, service code, and then an individual task code. If you talk with a client on the phone, you’ve got to enter code 9915, “Communicate (with client)”. You need to break down everything you do into these task codes e.g., “Review and Analyze,” “Research,” “Communicate (in firm),” “Communicate (opposing counsel).”

The list is endless – and god help you if you combine two service entries into a single code. The activity codes are useless for transactional work, but you still have to use them. Sounds like it’s not much fun… but that some firms have fully embraced project management now (see “SeyfarthLean” web page)…

ESG Risks Influences Foreign Sovereigns Ratings

As noted in this report, Moody’s says that changing environmental, social & governance considerations can affect sovereign ratings. Moody’s report points out that – while ESG is often spoken of as a single, homogeneous category of risk and while the three overlap in some respects – they are also quite distinct from one another. Of the three E, S and G risks, G has the strongest quantitative relationship with both sovereign ratings and Moody’s four methodology factors: economic strength, institutional strength, government fiscal strength, and susceptibility to event risk.

Broc Romanek