Corporate Social Responsibility – what does it mean for law firms?
Thursday 2nd July 2020
Corporate social responsibility (CSR) is of great importance to all businesses, and law firms are no different. According to Business News Daily, it can be defined as a type of business self-regulation with the aim of being socially accountable. CSR can take a variety of forms, including charity work, environmental and sustainable business programmes, pro bono work and equality and diversity initiatives.
Law firm websites will usually divide their CSR initiatives into a few key areas of focus. For instance, Allen & Overy divides its initiatives into diversity and inclusion, environment, pro bono and community investment and charitable giving. Within these areas, law firms will describe their reason for supporting the cause, specifically how they are supporting the cause, and often any awards they have received for doing so.
Clearly, the causes that law firms support benefit from CSR, but what does CSR do for law firms? The 2015 Cone Communications/Ebiquity Global CSR Study found that 91% of global consumers expect businesses to operate responsibly to address social and environmental issues. As a result, companies are becoming very aware of their public image and look to work with firms that operate responsibly. This is further affected by the increase in power of clients in the client-lawyer relationship. As law firms become increasingly globalised and the Big Four and in-house lawyer community rise, the competition for clients is fiercer than ever. Clients have a pool of choice and are likely to go for the firm that will best reflect the company’s social awareness and CSR strategy.
CSR expectations do not solely arise from clients, but also from pressures to act stemming from current affairs. This was seen in the recent Black Lives Matter movement that calls for meaningful, long term change in the establishment, which very much includes law firms. The sentence “Silence is complicity” circulated online, and many law firms took public stances and issued statements against racial injustice. Clifford Chance issued ‘A call to action for racial equality’ and pledged to double its annual funding to the Equal Justice Initiative, with firms such as Latham & Watkins and Kirkland & Ellis following suit with large charitable donations. Considering the legal industry was recently criticised for its lack of diversity by the Telegraph, with just six out of eight hundred Magic Circle partners being black, law firms have been keen to address the issue. Clients, lawyers and stakeholders recognise that CSR is now an expectation rather than a nicety; law firms should acknowledge global issues and respond to them.
However, merely having CSR initiatives is not enough. CSR in law firms has been criticised by some for being a superficial way to improve reputational standing without creating actual positive change. Therefore, law firms are under increasing pressure to engage in CSR meaningfully by allocating larger budgets, creating innovative programmes, setting defined targets and proving their impact. Lawyer Monthly points out that an attractive approach to proving impact is calculating social value as ‘Social Return on Investment’ (SROI). This relates to the perceived monetised value of an organisation’s social impact, and it can be used along with other methods of proving impact to create a new area of competition between law firms. In this way, firms can establish themselves as industry-leading, gain recognition and distinguish themselves from competitors.
It seems the main benefit CSR brings to law firms is reputational, but when these initiatives are meaningful, appropriate and necessary, CSR goes much further. A good reputation is what attracts the best talent, helps to form and maintain client relationships and ultimately allows a law firm to thrive.
