Preferred Counsel lists came into widespread use in the 1990s, when minorities and women were markedly underrepresented in the legal profession. Then, as now, Preferred Counsel lists allowed companies to obtain more favorable terms with outside counsel by forming consolidated networks. In recent years, corporate law departments started using national contracts for certain types of work. Prior to the rise of Preferred Counsel lists and national contracts, insurance companies used panel counsel lists. Companies retain these lists for years, often listing law firms of retained lawyers who have long left those firms. Companies’ continued use of the law firms on these lists, and the creation of new such lists, has had the unfortunate consequence of perpetuating historic inequality, and of causing the companies using them to miss out on the business advantages of having more diverse counsel.
This article proposes methods for companies to achieve the benefits associated with having a preferred network while, at the same time, increasing the benefits that minority and women owned law firms can offer these clients.