Coca-Cola GC Issues Open Letter on Outside Counsel Diversity Guidelines

On January 28, Bradley M. Gayton, senior vice president and general counsel of the Coca-Cola Company, sent out an open letter to the company’s U.S. outside counsel. I had the opportunity to speak to Gayton about these new guidelines and Coca-Cola’s own initiatives as well as his hopes for this endeavor.

Throughout his career, Gayton has put considerable effort into diversity initiatives and summits in hopes of addressing the diversity imbalance in the legal and business community. As he stated in his letter, “These efforts are not working.”

A year ago, two firms he’d worked with closely – attending diversity summits, assembling diversity initiatives and created scorecards to track progress – released their new class of partners. He received the placemat with the headshots of each new partner, and he was struck by the lack of diversity.

He contacted the firms and started work with them again and then in September he received an announcement that one of the firms was opening a new office with another placemat of headshots. Again, there was no diversity.

“I wasn’t making as much progress as I’d hoped given the amount of effort I was putting into this issue,” he said.

He has also become increasingly alarmed by the negative impact the pandemic is having on the careers of women and people of color.

“I’m concerned that we could lose ground on the progress we had been making,” he said.

As the general counsel of a client company, Gayton saw an opportunity to construct actionable steps with guidelines that would take a different approach to this issue. His team spent the last four months creating the guidelines outlined in his open letter (link below).

“When I think about impact, what I think we’re fundamentally trying to achieve is driving demand,” he said. “I’m trying to make it unequivocally clear that there is demand for diverse teams of lawyers and we’re going to reward the firms that put those teams together and cultivate and grow those teams.”

One of the ways in which the Coca-Cola Company will be “rewarding” these firms is through the creation of their preferred firm panel. When asked about the decision process in selecting these firms, Gayton shared that normal considerations like cost and technical competency will of course be weighed, but that adherence to the diversity guidelines will be the main differentiator.

“So, if impact is creating a demand, I think that is one of the things that will create demand.”

Of the guidelines outlined in the letter, Gayton believes the quarterly evaluations, the ability for firms to collaborate outside their four walls with other firms and the transparency in regards to origination/relationship credit and succession planning will be the areas driving the greatest impact.

“I think the quarterly evaluations we set up will be meaningful discussions because they will take place in close proximity to the billing cycle,” he said. “Those core discussions will be really helpful.”

As for transparency, Gayton recommends the creation of sponsorship roles – someone at the executive level, sitting at the decision table who is responsible for understanding “how work is allocated; being transparent about that process; and making it more democratic. They should also play a role in making sure that the work allocated is critical to people’s development and understand how origination credit and relationship credits are being allocated.”

Of the initiatives the Coca-Cola Company is pursuing, Gayton was most enthusiastic about the plan to increase the spend with women and minority-owned law firms from 1% in 2020 to 10% in 2021. When asked if it is their goal to hit that number by the end of the year, he said they WILL hit 10%.

When asked what he hopes to see spark from this letter, Gayton was very transparent.

“The Coca-Cola Company is just one client in the world with several dozen law firms.

“I hope these guidelines are broadly adopted by my peers in the legal community. But I also think about the impact this could have if these standards were adopted more broadly. If you thought about any sort of procurement function at a major corporation adopting guidelines like this for any sourcing decision they make, the kind of impact we could have collectively with women and people of color and supporting the suppliers we buy from. It could be really very powerful. That’s my hope.”