IN FOCUS: Law Firms' ESG Performance

Updated: Dec 15, 2021

impactvise has assessed more than 500 law firms across the globe. This includes the top 200 largest law firms in the US and UK -- including Magic Circle Firms and US Big Law firms. The bulk of the firms surveyed is based in the UK, USA, and Europe.

The findings show:

  • Worldwide, the average law firm’s performance is poor and there is a long way to go to raise standards. Even the best performing firm still has room for improvement in many areas such as conflict of interests, health and safety, setting purpose, etc.

  • The front runners are mostly UK Magic Circle firms and Big US law firms, but also some small boutique law firms.

  • Boutique law firms are more likely to apply client acceptance policies aligned to ESG criteria -- for example, not accepting clients that are “polluters.”

“Amongst legal service providers, the political ESG agenda in Europe is more advanced than in the US, and the same is true for the UK vs US law firms. But the 'sustainability race' is on, on all levels and the US is catching up,” says Adrian Peyer, impactvise co-founding partner.

“We believe there is a legal, moral, and business imperative for law firms to reach ESG goals as soon as possible. It can’t just be business as usual. By identifying strengths and weaknesses in your own and your clients’ operations you can then start to think about the ways in which to improve performance and get ahead of the curve and make a positive impact in the transition to a more sustainable economy,” added fellow impactvise co-founder Yannick Hausmann.

The research shows that ESG data is becoming part of the decision-making process. This is also the case for in-house counsel in the selection process of law firms.

The application of data analytics drives transparency, which is something increasingly sought by clients, investors, and employees.

The findings also show that the best UK performers are more advanced and broader in the topics they cover than the best US performers, which are more focused on selected topics like net-zero commitments, greenhouse gases, diversity, risk, and governance.

impactvise uses the globally accepted World Economic Forum’s stakeholder capitalism metrics, which it has tailored to the legal industry, to measure performance across a range of issues from remuneration, net-zero commitments, innovation, and ESG, to diversity & inclusion, data protection, and governance. impactvise then assesses the data based on its own internal 0-3 rating system.

The 18 metrics create a universal set of data points that can be compared between companies, irrespective of industry or geographies, and represent the most holistic approach to ESG reporting to date.

Although impactvise has not disclosed the names of those who performed well or badly in the “proof-of-concept” phase, it is in contact with interested law firms and this data is accessible for customers (law firms and GCs) on the impactvise platform if they want to see how they measure up.

If you'd like more detailed information about the study's findings, please reach out, today.