Diversity Among Elite American Law Firms: a Signal of Quality and Prestige

Abstract

This Article* considers the diversity-performance nexus among elite American law firms. I present several existing theories that might explain this nexus. I argue that these theories do not entirely explain certain institutional and behavioral realities among these law firms with respect to workplace diversity. The Article thus supplements the existing theories with a deliberately parsimonious theory that seems more consistent with several of the observed institutional and behavioral regularities among elite U.S. law firms. In particular, I argue that diversity functions as a signal for elite law firms. Adhering to diversity signals unobservable law firm attributes to various third parties, including prospective associates, and is thus a partial solution to asymmetric information. In this limited way, at least, diversity is good for business. Ultimately, however, the theoretical model that I present is deficient in that it treats diversity as an exogenous norm. A deeper inquiry into the motives of elite law firms' diversity commitment is therefore in order. (*Note: This Article lays the preliminary theoretical foundation for the larger project, which will include an empirical analysis of the relationship between diversity and performance/quality/prestige among elite U.S. law firms. The next stage will include a refinement of the theoretical framework and an empirical analysis using data from the Law Firms Working Group)