As the legal industry confronts persistent gender and racial imbalances, law firms are looking to attorney development reforms and structural incentives to both improve their own diversity and show their commitment to change.

Reed Smith capital markets partner Daniel Winterfeldt told a virtual roundtable hosted by Burford Capital this week that Big Law needs "an extreme makeover" to achieve greater equity. He said law firms should adopt mandatory leadership training to give lawyers from non-diverse backgrounds a better understanding of the experiences of their women and minority colleagues.

"We're asking men about how women feel within their firms and we're getting very different answers from what women are actually saying," Winterfeldt said. "Male partners are assuming that what happens to them happens to everyone else."

According to a February report by the National Association for Law Placement, women make up 25.05% of partners in U.S. law firm, while minorities are only 10.23%.

Bendita Cynthia Malakia, Hogan Lovells' global head of diversity and inclusion, said during the Burford panel Tuesday that along with mentorship and recruiting programs, law firms need concrete strategies to ensure minority attorneys know how origination credits work, how work allocation is determined and how client relationships are developed.

"We choose who is in the pipeline. We choose the budget for the pipeline. We choose who we recruit for the pipeline, so we need to be more intentional with how we handle the pipeline," Malakia said during the event, which focused on the responsibility of male lawyers to increase gender equity within the legal industry.

Spurred in part by last summer's George Floyd protests, many firms have also looked for ways to signal a commitment to diversity that extends beyond their own demographics. Lately, that's taken the form of new or expanded billable hours credits that can incentivize lawyers to become more active.

In January Hogan Lovells, Reed Smith and Ogletree Deakins each announced they are allocating 50 billable hours credits for firm and client-related diversity matters. Locke Lord upped the ante in February when it said it will count up to 75 hours of diversity-related work towards billable hour targets.

Reed Smith's lawyers and other timekeepers are able to use the billable hour credits, while only U.S associates and counsel at Hogan Lovells can count the hours toward the 2,000 needed to be eligible for a bonus.

Reed Smith's timekeepers have clocked more than 1,300 billable hours for diversity in January and February, according to a firm spokeswoman.

Despite the new wave of announcements, such incentives aren't new. Kirkland & Ellis, for example, said it has been giving billable hour credits for diversity work for more than a decade.

Another of Tuesday's panelists, Freddie Mac general counsel Ricardo Anzaldua, who announced Wednesday that he is retiring from the company, said non-diverse lawyers won't have a reason to change the faces of their firms without having "skin in the game." He said framing diversity activities as a form of charity often fails to motivate lawyers who come from privileged or non-diverse backgrounds.

"If you put the incentives there, people will find a way to get things done," Anzaldua said.