Serving as the general counsel of a large company comes with a host of responsibilities. It involves strong management skills, staying attuned to the latest regulatory developments, and navigating complex laws across jurisdictions. Some general counsels have taken it upon themselves to also use their position for social good, to promote workplace diversity.
Louise Pentland, the Chief Legal Officer of PayPal, is on just such a mission. In addition to focusing on the many demands of running the legal department of a multibillion-dollar technology company, Pentland is dedicated to increasing diversity at the top.
Ms. Pentland’s Initiatives
Since joining PayPal as Chief Legal Officer in 2015, Ms. Pentland has implemented a number of initiatives to promote diversity and inclusion. PayPal’s employee resource groups provide an outlet for all employees to voice their concerns. They also have invested in internal programming and acknowledged the role of workplace sexism and racism. Shadowing initiatives, such as an initiative that allows junior employees to shadow more senior employees, ties to the company’s goal of facilitating mentorship and role models.
Diversity of the Board
PayPal has also focused on building a diverse Board of Directors. PayPal’s Board of Directors is approximately 45% women and underrepresented ethnic minorities. PayPal’s CEO Dan Schulman has likewise been passionate about bringing more diverse candidates in for consideration.
Businesses have a tendency to invest significant resources into attracting diverse candidates and hiring headhunters. However, once hired, these companies often fail to retain and advance diverse employees into top leadership positions. Ms. Pentland is focused on a consistent approach to engagement. This involves frequent check ins to ensure diverse employees feel that they have access to high-quality opportunities and mentorship.
“I came into this profession with no network myself, and without the privilege of personal or professional connections,” stated Ms. Pentland. “In fact, I was the first in my family to go to college so my advancement as a lawyer has been a distinct combination of hard work, and mentors and sponsors. The lack of diversity can, unfortunately, still be attributed to the fact that many people don’t have a network.”
Diversity Extends to Outside Counsel
Outside the walls of PayPal, Ms. Pentland has focused on making sure the external law firms PayPal uses have diverse teams of lawyers. Too often, the representation of diverse lawyers on deal teams is disappointing. PayPal has been fortunate to have the ability to select from a wide range of top law firms. Unlike some companies, PayPal doesn’t have established 30-year relationships with certain law firms. And if previously selected law firms fail to maintain diverse deal teams, PayPal will take a firm stance to not work with them on a repeat basis. Moreover, Ms. Pentland knows appearances on paper can be superficial. Therefore, she analyzes the actual interactions between lawyers at the outside law firms that PayPal hires to make sure diverse lawyers are getting adequate substantive opportunities and leadership on deal teams.
Ms. Pentland ties the company’s focus on diversity efforts to the broader corporate mission—to democratize access to financial services. Founded in 1998, PayPal today operates online payment systems in a majority of countries around the world. It facilitates fast, secure financial transactions for 400 million active users globally. Customers value the payment network’s flexibility and simplicity. PayPal also owns Venmo, which processes nearly $200 million in total payment volume.
PayPal’s legal department has had to deal with a plethora of regulatory issues. Operating as both a large technology company and as a financial services company, PayPal has had to navigate a number of antitrust, money transmitter, data privacy, and other complex laws across countries with diverse legal systems. Complying with strict tech and finance sector regulations means organizational management is key throughout PayPal’s legal department. Recently, PayPal and Venmo have enabled users to buy crypto on their platforms. While there is relatively little federal regulation over crypto trading today, PayPal will need to be alert to regulatory changes.
Ms. Pentland is among only a handful of chief legal officers that earned eight figure compensation in 2020. Executive compensation packages are typically composed of a combination of base salary, cash bonuses, and equity awards. Equity and stock awards can sometimes account for up to 60% of the total compensation package. As the pandemic boosted the stock prices of technology companies, the general counsels of tech companies such as Apple, Alphabet, Uber, and PayPal saw their compensation soar.
Mansfield Plus Certification for Diversity
Her commitment to diversity and inclusion is already paying off. Out of a large number of in-house legal departments surveyed in 2020, Ms. Pentland’s legal department was one of only 13 legal departments to earn the Mansfield Plus Certification. Earning this certification is linked to the representation of historically underrepresented lawyers in leadership roles and high-visibility work opportunities.