Former Zurich Insurance Group general counsel duo launch platform to measure law firm ESG performance
New offering also enables law firms to measure their own progress and includes firm-client matching features
A Swiss startup founded by a pair of former general counsel at Zurich Insurance Group has created a platform to help GCs compare law firms’ environmental, social and governance (ESG) performance.
Adrian Peyer and Yannick Hausmann's data analytcis platform, launched through their Zug-based startup Impactvise, is also intended to enable law firms to more accurately measure their own ESG progress and match GCs with law firms whose ESG performance reflects their company’s values.
Hausmann told Legal Futures that general counsel could use the tool to rank and review their current panel firms, or when considering engaging a new firm, which in turn could create an opportunity for an ESG-forward law firm to gain new clients.
Equally, law firms lagging behind could find themselves missing out as their corporate clients increasingly focus on ESG matters. In May Nokia’s legal team launched an equity, inclusion and diversity scorecard system to assess its six panel law firms, while last year Swiss pharma giant Novartis agreed diversity and inclusion targets with its roster of law firm advisers and will withhold 15% of their fees if they are not met.
Impactvise’s platform uses the World Economic Forum’s stakeholder capitalism metrics, which it has adapted to the legal industry, to measure performance in matters including remuneration, net-zero commitments, diversity and inclusion, data protection and governance. It then assesses the data based on its own internal 0-3 rating system.
It uses algorithms to assess publicly available data, requiring no manual data input from the law firms themselves, and uses natural language processing to analyse law firms’ values and standards as described by themselves on their websites and others in the media.
Hausmann commented: “As companies adapt to meet the sustainability standards of their stakeholders, as well as comply with regulations and requirements, so too do companies expect the same from their business partners and service providers. Lawyers are core among these partners and Impactvise provides the foundation for effective engagement on sustainability.”
Impactvise last week published a study on the ESG performance of more than 500 law firms across the world, including the top 200 largest firms in the US and UK. It found that the average law firm’s performance was ‘poor’ and that even the best performers still had room for improvement in a number of areas including conflicts of interest and health and safety.
The front runners were mostly UK magic circle firms and the big US firms, though the best UK performers were ‘more advanced and broader in the topics they cover’ than their US counterparts, which were ‘more focused on selected topics like net-zero commitments, greenhouse gases, diversity, risk, and governance.’
However, Peyer said “the 'sustainability race' is on, on all levels and the US is catching up.”
Also among the top performers were some small boutique law firms, which Impactvise said were more likely to apply client acceptance policies aligned to ESG criteria such as not accepting clients that are 'polluters'.
Impactvise’s co-founders have been self-funding the startup until now but will look for external funding in the first quarter of next year.