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Microsoft adopts bonus scheme to promote diversity

Microsoft adopts bonus scheme to promote diversity

Microsoft has announced the launch of an innovative initiative that uses a “pay for performance” approach to enhance diversity in the legal profession. The new ‘Law Firm Diversity Program’ will pay firms a bonus if they achieve diversity targets. Microsoft has created two alternative diversity goals, and each firm can choose which goal it wishes to use.

Under the new Law Firm Diversity Program, Microsoft is changing its legal fee structure for 17 Premier Preferred Provider (PPP) law firms that collectively handle more than US$150 million of legal work for the company annually.

Each PPP firm can earn a 2 percent bonus by achieving concrete diversity results. It has created two alternative diversity goals, and each firm can choose which goal it wishes to use. The first is a 2 percent increase in the hours worked by U.S.-based diverse attorneys as a percentage of total hours worked on Microsoft matters, compared with the same time period last year. The second goal is a 2 percent increase in the total number of U.S.-based diverse attorneys employed by the firm. The first goal focuses on diverse representation for Microsoft, while the second focuses on diverse representation in the firm’s U.S. offices overall.

Microsoft simultaneously launched new internal initiatives to work in closer partnership with its leading law firms on diversity. Most notably, five percent of the annual bonuses of Microsoft’s Vice President for Legal and Corporate Affairs and his senior leadership team will depend on the level of success the PPP firms achieve in improving diversity and earning their bonuses from Microsoft.

Within Microsoft, 44 percent of attorneys are women or minorities and the firm are coupling the Law Firm Diversity Program with a substantially broadened diversity initiative for Microsoft’s in-house Legal and Corporate Affairs department.

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