In-House Counsel

Diversity And Origination Credit

For law firms to prove that they value diversity and inclusion, they must put their money where their mouths are.

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When I became Vroom’s first general counsel after years of working in-house at Etsy, I received many congratulatory emails, gifts, and pitches from a wide variety of law firms. Shortly after starting at Vroom, I was negotiating an engagement agreement with a law firm attorney who had previously worked with me at Etsy. I prioritized diversity and inclusion and wanted to make sure that this lawyer received origination credit for my company. “Origination credit” refers to the concept that the person who brings a client to a firm gets credit for future work, even if that person never did actual work for the client.

I was shocked by her answer. She would not receive origination credit for me or for her firm’s future work. It seemed that due to prior outreach, another lawyer, someone I had never spoken with and who had never done work for my client, had laid claim to me. She was hesitant to push the issue, explaining that disputes must follow the firm’s internal process. Any actions by me could negatively influence her career path. She didn’t want either of us to step outside our lane.

The past few weeks, I’ve been inundated by law firms supporting Black Lives Matter, offering Juneteenth as a firmwide holiday, and otherwise toting their positions on equality. This is a step in the right direction, but it’s not enough. More is needed than just paid time off, inspirational quotes, and photos on a website for law firms to prove that they value diversity and inclusion, they must put their money where their mouths are.

Here are four tips for in-house counsel who want to influence outside counsel’s origination credits.

1) Outside Counsel Guidelines — Ensure that your company’s guidelines require transparency and outline specific language around your diversity goals. For example, a diverse “team” may include layers of support staff.

2) Engagement (Or Re-engagement) Letters — Outline the allocation of the origination credit and, if appropriate, specify who gets the credit.

3) Review And Iterate — If a relationship is ongoing, so is the equality conversation. If you inherited a law firm, ask questions about the history of the work, the bills, and the origination credit. Share tips and industry best practices with other in-house attorneys. Examine the marketing of competing firms. Use all this information in discussions and when you periodically update practices and policies.

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4) Comply or Cut Ties — You must decide what is in the best interest of your client. A policy is worthless unless it is followed.

In-house attorneys are responsible for culture and supporting a company’s mission, vision, and values. We are surrounded by legal issues and choose how to delegate the various legal work. We review bills, approve bills, and our budget pays the bills. If outside counsel believes that a lane doesn’t include transparency concerning attorney compensation, it is time to forge a new path. The only way to fight systemic oppression is with systemic change.

Sarah was the General Counsel / first Lawyer at Etsy and Vroom.  She’s a co-founder of The Fourth Floor, a creator and producer of Legal Madness, an NYU Law School Engelberg Center fellow, a board member, an investor, and a speaker. You can also find Sarah hammering silver, eating candy, and chasing her child. sarahfeingold.com.

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