Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How a Law Firm Made Billing Credit for Diversity Work Count
Transcript
- Lucas: So there's this moment in a young lawyer's career where they have to decide: do I take on the diversity committee role, or do I protect my billable hours? And for a long time, the answer was obvious — you protect your hours, because your compensation and partnership track depend on them. Luna: Right, and that's the diversity tax — the hidden cost of doing inclusion work when it doesn't count toward your metrics. Lucas: Exactly. A few firms have started to address that head-on. Morrison & Foerster — MoFo for short — introduced what they call a 'Diversity Credit' policy back in 2023. The idea is straightforward: attorneys can count up to two hundred hours per year of diversity-related activities toward their billable target. Luna: Two hundred hours — that's about ten percent of a typical annual target, which is significant. Lucas: It is. And the activities are broadly defined: mentoring junior associates from underrepresented backgrounds, participating in recruiting events at law schools with diverse student bodies, serving on the firm's diversity committee, even developing DEI training materials. The firm wanted to signal that this work is not extracurricular — it's core to the practice. Luna: But how do you prevent it from becoming another box-checking exercise? I mean, if hours are credited, there's an incentive to inflate them. Lucas: That's the tension. MoFo requires attorneys to submit a brief description of the activity and get approval from a partner. They also track outcomes — not just hours logged, but whether the associate's engagement correlates with retention and promotion. Early data suggests that associates who use the credit are more likely to stay at the firm past their third year. Luna: And that's the real metric. Retention, especially for women and lawyers of color, has been a chronic problem in Big Law. Lucas: The industry average for attrition of underrepresented attorneys by year four is something like forty to fifty percent. MoFo's numbers aren't perfect — they're still a predominantly white partnership — but the credit seems to be a meaningful lever. They reported a fifteen percent improvement in retention of diverse associates since implementing the policy. Luna: Fifteen percent — that's not trivial. And it addresses a structural problem that many firms talk about but few actually solve. Lucas: What I find interesting is that the policy also forces a cultural shift. When billing credit is on the line, partners start paying attention to DEI work. They ask questions about it in reviews. It becomes part of the conversation, not an afterthought. Luna: But there's a risk, right? If diversity work becomes just another metric, you might get people doing performative hours — attending a meeting and logging it, without real impact. Lucas: That's a fair concern. MoFo tries to mitigate it by requiring that the activity be 'substantive' — not just showing up. But the line is blurry. A one-hour pipeline webinar is easy to count. A sustained mentorship over six months is harder to track but more valuable. Luna: So the design matters a lot. What other firms have adopted similar policies? Lucas: A handful. Latham & Watkins has a 'diversity and inclusion hours' category. Orrick lets attorneys count pro bono and DEI work together toward a reduced target. But MoFo's model is the most explicit in tying credit directly to billable expectations. Luna: And it's not just law firms. Consulting firms like McKinsey have experimented with similar ideas — weighting DEI contributions in performance reviews. Lucas: Right. The principle scales: any professional services firm where billable hours are king has to structurally value inclusion work, or it will always be seen as a trade-off. Luna: You know, this reminds me of something. We talk a lot on this show about career ladders and structural changes. And I think a lot of listeners — especially those in professional services — might be wondering how to advocate for something like this at their own firm. Lucas: Yeah, it's a tough conversation to start. But the MoFo case gives you a concrete model to point to. You can say, 'Look, a peer firm has done this and seen retention improve. Can we pilot something similar?' Luna: And speaking of concrete models — I know we don't usually do this, but I think it's worth mentioning that the reason we can dive into cases like this, week after week, without ads, is that some listeners choose to support the show. Lucas: Yeah, it's a small thing that makes a big difference. If this podcast has helped you think through a career move or given you a new idea, a couple of dollars a month at buy me a coffee dot com slash fexingo genuinely keeps us going. Luna: It's that simple. No tiers, no bonuses — just knowing the show is useful to people. So thank you to anyone who's already done that. Lucas: Alright, back to law firms. One thing I want to dig into is whether these policies hold up when the market turns. We're recording this in June 2026, and the legal industry has seen some belt-tightening in certain practice areas. Luna: Right. When revenue pressure hits, the first thing that often gets squeezed is non-billable work. Lucas: Exactly. MoFo's policy has been in place for about three years, through a period where demand was relatively strong. The real test will be in a downturn — will partners still encourage associates to take those two hundred hours, or will they quietly suggest that diversity work can wait? Luna: And that's where commitment has to be structural, not just cultural. If the credit is baked into the formal system — written into the associate handbook, tracked in the billing system — it's harder to roll back than if it's just a 'we encourage you' message. Lucas: MoFo has it written into their policies. They also publish an annual diversity report that includes usage rates of the credit. In 2025, about sixty percent of eligible associates used at least some of their diversity hours. Luna: That's a solid adoption rate. But I wonder about the forty percent who didn't use it. Is it because they didn't have time, or because they didn't feel supported? Lucas: That's the next question. Early feedback from associate surveys suggests that some worry about stigma — that logging diversity hours might signal they're not focused on 'real' work. Others simply don't have visible opportunities. Luna: So the policy alone isn't enough. You also need active sponsorship — partners who say, 'Come with me to this recruiting event, I'll count it as your credit.' Lucas: Right. And that's where firms that succeed tend to have a critical mass of partners who are genuinely bought in. It's not just HR driving it; it's practice group leaders. Luna: Let's talk about the pipeline piece. MoFo also ties the credit to its 1L diversity fellowship program — first-year law students from underrepresented backgrounds get a summer associate position, and the attorneys who mentor them can count that time. Lucas: That's a smart integration. The mentoring hours become part of the credit, which means associates have a direct incentive to invest in the pipeline. And for the summer associates, they see that the firm values this work — it's not just window dressing. Luna: So the policy has a multiplier effect: it retains current attorneys and attracts future ones. Lucas: Exactly. And that's the argument for making it permanent. The upfront cost — in reduced billable hours — is offset by lower turnover costs and stronger recruiting. Luna: Turnover in Big Law costs roughly two to three times an associate's salary when you factor in recruiting, training, and lost productivity. So even a small retention improvement can justify the policy. Lucas: That's the business case. But I think the deeper point is about equity. Underrepresented attorneys were already doing this work — mentoring, recruiting, serving on committees — they just weren't getting credit for it. The policy just makes the invisible visible. Luna: And it reduces the penalty for being one of the few. When you're the only woman of color in a practice group, you get asked to join every diversity task force. Without credit, that's a double burden. Lucas: Right. So the credit doesn't just reward work — it redistributes the cost of inclusion across the firm, rather than loading it onto the people who are already underrepresented. Luna: That's a structural fix. And it's replicable. A marketing agency could count DEI committee hours toward utilization targets. A bank could give loan officers credit for community outreach. The template is there. Lucas: I think the key is specificity. MoFo didn't just say 'diversity work counts.' They defined the hours, the approval process, and the reporting. Vagueness kills these policies. Luna: So if a listener wanted to bring this idea to their employer, what would you tell them to lead with? Lucas: I'd lead with retention data. Show them the fifteen percent improvement at MoFo. Then ask: what would a five percent improvement in retention of underrepresented talent be worth to our firm? That gets the conversation out of 'should we' and into 'how would we'. Luna: And if the answer is 'we can't afford the lost billable hours,' you can point to the turnover cost savings. It's almost always a net positive. Lucas: Exactly. This is one of those rare cases where the equity argument and the business argument point in the same direction. And that's powerful. Luna: Alright, I think we've given listeners a solid blueprint. Next time you're in a meeting about DEI metrics, you've got a concrete example. Lucas: And if you want to dig deeper, MoFo's annual diversity report is public. The 2025 version includes a section on credit usage. It's worth a read.