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29 June 2025 F E A T U R E S T O R Y June 2025 » and insurance standards. As a result, the very firms that many corporations seek to support—those that are smaller, women-owned, or diverse—are being priced out of competing for significant legal engagements. This dynamic creates a challenging environment for diverse firms striving to grow and establish themselves in a competitive legal market. Larger businesses focused on diversity, equity, and inclusion (DEI) would benefit to recognize that, despite their well-intentioned efforts to comply with evolving regulatory requirements, they may unintentionally hinder their goals of engaging minority and wom- en-owned law firms. One potential solu- tion is for businesses to adopt a phased approach to compliance, allowing small- er firms more time to meet IT, security, and insurance requirements. Rather than enforcing immediate and full compliance with stringent standards, businesses could gradually increase requirements as more cases or files are referred. This would give smaller firms the opportunity to build toward full compliance without facing immediate financial strain. Additionally, instead of imposing a fixed minimum insur- ance policy limit on outside counsel, businesses could tailor the limits based on the size of the firm or the volume of work being referred. By implementing these adjustments, businesses can better align their compliance goals with their diversity and inclusion objectives, foster- ing greater opportunities for diverse law firms while maintaining high standards of legal and regulatory adherence. While the implementation of robust IT, security, and insurance measures is essential for mitigating risk and ensur- ing compliance with data protection standards, these requirements can have a disproportionate impact on smaller, diverse, and women-owned law firms. The financial and operational costs of compliance create significant barriers for these firms, potentially under- mining the corporate commitment to fostering diversity and inclusion in the legal industry. As businesses continue to prioritize these compliance stan- dards, the unintended consequences for diverse firms must be recognized, as these requirements increasingly limit their ability to compete for high-value corporate engagements. Disclaimer: The above information is intended for information purposes alone and is not intended as legal advice. Please consult with counsel before taking any steps in reliance on any of the information contained herein. While the implementation of robust IT, security, and insurance measures is essential for mitigating risk and ensuring compliance with data protection standards, these requirements can have a disproportionate impact on smaller, diverse, and women- owned law firms.