German multinational chemicals company BASF has set new diversity demands for the external counsel it works with globally.

The Global Outside Counsel DEI (diversity, equity and inclusion) programme expands on a North American-focused scheme launched back in 2016 by GC Matt Lepore and previous deputy GC for North America Sneha Desai to boost the number of women lawyers and lawyers from diverse backgrounds that the company engages. That programme has seen the number of diverse relationship partners on BASF matters more than double, with the number of diverse lawyers assuming leadership roles at BASF panel firms also increasing by 9%.

Bendita Cynthia Malakia, global head of diversity and inclusion at Hogan Lovells, a BASF panel firm, said: "The efficacy of the BASF programme is that it provides concrete and measurable action items that are grounded in the firm’s data. This fosters innovation and facilitates meaningful conversations to further DEI inside the firm in all of our jurisdictions, including those where these metrics are not typically sought.”

The new global initiative requires its 25 panel firms across North America, Europe, Latin America and Asia Pacific to complete the BASF Global DEI Survey once a year, endeavour to increase the overall number of lawyers with diverse backgrounds, demonstrate commitment to retaining and promoting diverse lawyers and partnering with BASF to train and mentor diverse lawyers so they get significant client exposure.

Data generated from the survey is then fed into an index which outlines regional and global scores for firms as a point of comparison. The scores form part of the company’s regular check-ins and overall performance and relationship meetings.

Benjamin Parameswaran, managing partner of DLA Piper’s German business, said. “The positive change in DEI representation BASF is effecting within its own organisation, coupled with a direct and collaborative approach to DEI with law firms, is testament to its commitment to shifting the status quo.”

Other in-house teams have been demanding greater commitment to diversity from their panel firms. Novartis said in 2020 that it will withhold fees from legal advisers who miss diversity targets. At the start of last year, Coca-Cola’s then-GC Bradley Gayton announced a similar plan, though he stood down three months later and the plan was never implemented.

Last October, GCs at 27 leading US companies pledged to take part in a law firm DEI scorecard to measure the effectiveness of their diversity efforts.

In-house teams are also getting more diverse. The gender balance of GC appointments at US Fortune 500 companies almost reached parity last year, with women making up 49% of new GCs, compared to 42% in 2020, according to the annual Fortune 500 General Counsel Report published earlier this month. Ethnic diversity of GCs has also increased, rising to 34% last year compared to 24% in 2019 and 2020, the study found.