Novartis makes tough diversity demands on outside counsel


Edward Pearcey

Novartis makes tough diversity demands on outside counsel

Lucarista /

Swiss pharmaceutical giant Novartis is demanding that its external counsel ensure that a minimum of 30% of billable associate time and 20% of partner time will be provided by women, or members of the ethnic or LGBT communities, as part of its just-announced preferred firm programme for legal services.

If firms on the company’s external panel, which currently include Alston & Bird, Hogan Lovells, and Linklaters, fail to meet “its agreed-upon diverse staffing commitment for a particular matter, Novartis will withhold 15% of the total amount billed over the life of that specific matter”, the drug maker said in a statement.

“We recognise that corporate legal departments have an incredibly important role to play in ensuring that the legal profession accelerates its efforts to make meaningful progress when it comes to diversity and inclusion,” said Shannon Thyme Klinger, group general counsel, Novartis, in a prepared statement.

She continued: “Building on our company’s public pledge to achieve pay equity and transparency by 2023, and supporting the UN’s Human Rights global LGBTI business standards, our programme prioritised in its selection process firms with a demonstrably strong commitment to [diversity and inclusion] and who were willing to stand by this commitment from a financial perspective as to all Novartis matters.”

The programme applies to all 22 members of the company’s external counsel panel.

Novartis will also “further leverage technology and data analytics to simplify firm selection and engagement within the panel, as well as design fee models that replace time-based billing with financial remuneration tied to the value that the Novartis legal team jointly creates with its law firms”.

According to Novartis’s website, “diversity in our people enhances our ability to better understand the needs of patients and other stakeholders. We consider diversity and inclusion to encompass, but not be limited to, race, ethnicity, gender, religion and belief, sexual orientation, age, differential ability, education, nationality, life experiences and thinking styles”.

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Novartis, diversity, external counsel, women, ethnic minorities, LGBT, preferred firm programme, Alston & Bird, Hogan Lovells, Linklaters