Posted on 07/06/2005 2:34:54 PM PDT by tdewey10
Wal-Mart Demands Diversity in Law Firms
Outside counsel must comply or lose its business, says GC at nation's biggest retailer
Law firms that pack their lower ranks with minorities and women while leaving white men in charge are about to find Wal-Mart a tough customer.
The nation's biggest retailer wants to see diversity at the top. The company's general counsel has told its top 100 law firms that at least one person of color and one woman must be among the top five relationship attorneys that handle its business.
Wal-Mart GC Thomas Mars made the announcement last week at an Atlanta conference on legal diversity. Top lawyers at Visa International, Del Monte, Pitney Bowes and Cox Communications also said they have begun requiring outside counsel to demonstrate that there are substantive numbers of women and minority lawyers in the upper levels of their firms.
Mars, whose department spends about $200 million a year on outside legal services, said he realized he had to do something when he saw that 82 of the top 100 relationship partners handling the company's business are white men.
Those firms get $142 million of the company's business, with individual firms' fees ranging from $350,000 to $13 million.
The goal, said Wal-Mart's associate general counsel, Samuel M. Reeves, is to "increase the number of women and minorities directly responsible for the Wal-Mart relationship at our law firms."
Mars, Reeves and the other GCs were participants in the fourth annual Symposium on Diversity in the Legal Profession, organized by the Atlanta Legal Diversity Consortium.
The move by Wal-Mart appeared to answer two of the big questions posed at the symposium that drew about 400 lawyers from around the country: Do general counsel at large companies consider the number of women and minority lawyers employed by outside counsel when deciding whom to hire -- and will they move business away from firms that remain overwhelmingly white and male?
That prospect has become serious since Sara Lee's top lawyer, Roderick A. Palmore, issued a "call to action" last year warning that he and the other signatories would consider a firm's diversity when hiring outside counsel. So far, close to 100 general counsel have signed on, including those from some of the nation's biggest companies.
Wal-Mart's move, sent in a letter to outside counsel last month, upped the ante.
Once the retailing giant gets lists of attorneys from its outside firms, due in mid-July, it will start weeding accordingly, Mars said. "We'll be making more decisions to retain and terminate firms [at that point]," he said.
"We are terminating a firm right now strictly because of their inability to grasp our diversity expectations," he added.
NO LONGER ENOUGH
Wal-Mart's new policy signals a growing determination by corporate legal departments to pressure outside counsel. It is no longer enough, the general counsel at the symposium said, to raise the numbers of women and minority lawyers in a firm's lower ranks if its upper echelons remain an exclusive club for white men.
Although the number of women and minorities running corporate law departments is disproportionately low, it is far higher than at the nation's top law firms.
Mars acknowledged that corporate legal departments also have a way to go on diversity. Wal-Mart's legal department started an effort to increase its own diversity about 2 1/2 years ago. "We had 50 lawyers and no particular diversity in the group," he said. Last year, the company hired 39 lawyers and 15 were minorities, he said. Now Wal-Mart wants to hold its outside counsel to the same standard.
Guy Rounsaville Jr., general counsel at Visa, agreed with Mars that just looking at the number of women and minorities at a firm is not enough. He said he wants to make sure the women and minority lawyers are among the client relationship managers.
"I get intrusive about who in the firm is getting credit for the relationship," he said, adding that Visa also asks outside counsel for a monthly diversity report.
Del Monte General Counsel James G. Potter said that his company's requests for proposals always include a question about the firm's track record in hiring and promoting women and minorities -- and their likelihood to be assigned to the company's work. Failing to address that question substantively "dramatically lowers a firm's chances of reaching the interview stage," he said.
Pitney Bowes' GC, Michele Coleman Mayes, said she focuses her scrutiny on the firms where her company spends the most money, adding that she looks at the law firms' numbers and also talks to their lawyers to gauge how hospitable the cultures are to women and minorities.
AVOIDING A ZERO-SUM GAME
Not everyone at the symposium thought diversity should be judged mostly by numbers. James A. Hatcher, senior vice president for legal and regulatory affairs at Atlanta-based Cox Communications, said that he does not ask firms to quantify their diversity. "I want diversity to be part of the culture," he said.
To find out if firms are fostering what he called an "inclusive environment," he asks his outside counsel a lot of questions. "At meetings with firms I'll ask, 'Why are there just white males here?' Or I'll probe associates to see how it is working there," he said.
Hatcher said his measure is "inclusiveness" instead of "diversity" because he does not want to pit white men against women and minorities.
"I try to include the white male in this," he said, explaining that sometimes "white males fear diversity efforts." Increased diversity at law firms should be a win-win situation, not a zero-sum game where white men lose opportunity as women and minorities gain it, he said.
DIVERSITY EDUCATION
To help firm managers make their environments more inclusive, the Atlanta Large Law Firm Diversity Alliance will launch a diversity education program next fall. Executive director Melanie Harrington, who announced the new program at the symposium, said it's the first of its kind.
The group has developed a management training program aimed at making the environment more hospitable for minorities -- instead of just getting the numbers up, she said.
Firm managers need to become "more cognizant that they have people coming into their environment who are not aspiring to assimilate but to contribute as they are," she said.
The program is aimed at practice leaders and others in large firms with an interest in managing diversity, Harrington said. For more information, see the American Institute for Managing Diversity's Web site, or call (404) 575-2131.
The Alliance's 11 member firms are Alston & Bird; Arnall Golden Gregory; Jones Day; Kilpatrick Stockton; King & Spalding; McKenna Long & Aldridge; Morris, Manning & Martin; Powell Goldstein; Smith, Gambrell & Russell; Sutherland Asbill & Brennan; and Troutman Sanders.
You can count on Vernon Jordan being behind this story. I am familiar with his tactics with retail companies, and he considers WMT the elephant.
Just wait until Mr. or Ms. Diversity Hire at the top bollixes up a big multi-million dollar deal or case for Wal-Mart. I guess then it will be the law firm's fault for not making the correct diversity hire or promotion. You are probably correct though; a big law firm would have the real talent in the background doing the work while the window dressing kept the PC crowd happy.
What female or minority lawyer with any self-respect would want to be viewed as a token promoted to appease the PC mongers? I would want to know I earned my place at the top and deserved all due respect.
Walmart is trying to clean up its image. I'm pretty sure they got in big trouble for hiding stuff in discovery in lots of cases. basically, they hired extra sleazy lawyers and paid them by the case. So the lawyers would put the case in a drawer and ignore court orders, etc. They got hit with mucho sanctions. So now they are going the big firm big publicity route.
About fifteen years ago, just about the time that the PC sh#t was starting to hit the fan, I began doing some part-time work as an arbitrator for the NY Stock Exchange. In addition to mediating disputes between brokers and their clients, arbitrators also are called upon to settle cases between member firms and their employees.
New arbitrators had to take a few seminars to further our understanding of these employment cases. One hot topic involved discrimination. There were two ways to "prove" it--direct and indirect. I had no problem with the former. It manifests itself when a minority person (i.e., a Black, Hispanic, or a woman) with a clearly superior record of accomplishment is overlooked for a promotion which is then given to a less deserving White Male. Although often difficult to prove, the concept is understandable.
The indirect method of "proving" prejudice is by throwing statistics at you. That is, if Blacks make up 12% of the general population and only 2% of the law partners, bias is assumed. I had a great deal of difficulty with that concept. I argued with the "instructor" vehemently that aptitude and interest might discourage Blacks from being concert violinists and Whites from being NBA point guards, and absent the overt type of biased behavior previously mentioned, one could not assume that just because the numbers worked out in a particular manner, that improper discrimination was the reason.
I kept my mouth shut long enough to get my little diploma and I did work as an arbitrator for several years. Luckily (for the plaintiff), I never was involved in a statistics-based discrimination suit.
Exactly; PC and diversity run amok will ruin us!
"Oh, and what is Wal-Mart going to do to law firms that don't comply with their DEMANDS?"
They won't give said firms millions of dollars worth of legal business. This PC fad really is a big deal for law firms. I wonder if the same crowd will be going after big banks, brokerage, and accountancy firms, but maybe that's what Je$$e Jack$on's Wall Street Project was all about.
I shop at Walmart and there's lots of women and minorities shopping beside me. This isn't a government action, it's a company that wants their lawyers to reflect their customers. It's a good idea. Hats off to Walmart.
So WalMart is basically saying, give me 3 white guys, a woman and a black guy, and continue to bill me as before.
Di-verse it gets.
Quotas on attorneys? What's next? Quotas on the number of children and military in China manufacturing their goods?
Interesting that you should mention that it all started about 15 years ago. That is exactly correct. During the 1980s, SCOTUS had actually managed to strike down some - not all - of the racial preferences that were initiated by the government via an administrative ruling by a bureaucratic parasite named Alfred Blumrosen in the Nixon regime under the Orwellian term "affirmative action", chiefly in the private sector. In order to bring a civil rights suit, the plaintiff actually had to prove they were discriminated against. What a concept!
This was turned on its head by the Civil Rights Act of 1991. Passed by by a Rat-controlled congress with the help of plenty of the plaid-pants platoon (RINOs), and signed into law (in violation of a campaign promise) by the ultimate empty suit, George Herbert Walker Bush. Since then, all the plaintiffs have to do is prove that there are fewer minorities proportionally in any given position than there are in the general population. This now constitutes proof of institutional discrimination. Basically, there is no defense against such a charge as it basically requires defendants to prove their innocence. (Minority-owned firms are exempt, naturally.)
The 1991 law was backed by several large corporate interests at the time, which was seemingly illogical. It's not illogical when you think about a large corporation's greatest fear - some small startup that can run rings around their bloated bureaucracies and seriously eat into their market share. The big players can afford all of the racial/gender preference employee deadwood and hire folks in Bangalore to do the real work. The small startups can't afford the "diversity" quotas-that-are-never-called-quotas, and medium-sized firms must get with the program or face Jesse and the ambulance-chasers, a losing proposition. With it's long record of profiting form slave and sweatshop labor in totalitarian China, I'm surpised it took Wal-Mart this long to get in on the "diversity" racket.
Frankly, any American official has a lot of gall criticizing other countries for their lack of free markets. We're well on our way to becoming a totalitarian oligarchy like China.
I wonder if this is for real or not.
What happened to: I want the 5 best attorneys you've got?
"What female or minority lawyer with any self-respect would want to be viewed as a token promoted to appease the PC mongers? I would want to know I earned my place at the top and deserved all due respect."
Well said! I came up against that every once in a while during my military career; especially when I was promoted above other men. Do the time, keep your nose clean, keep your education up to snuff; ANYONE can go ANYWHERE without favoritism, if you've got the right stuff!
I know some here just HATE women and minorities in the military, but you should have a mix of the citizenry that makes up our nation protecting our nation, no?
I, too, hate to see Wal-Mart get sucked into this. It's destroyed lesser companies than Wal-Mart along the way. I'd hate to see this be the beginning of the end for them.
They're free to set up artificial quotas if they like. I just hope they don't bitch when they get substandard representation because they were only looking at skin color and reproductive organs instead of SKILL.
No big law firm with millions in fees and its reputation on the line would let it happen. As another poster wrote, the window dressing, if mediocre or worse in legal skills, will only be there for show.
Isn't it funny how nobody ever worries about diversity when it comes to picking a surgeon? People want the best one period, end of discussion.
This goes on at the large consulting firm my sister works for. Clients show up specifically requesting a certain percentage of minorities be part of the team assigned them. It's crazy.
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