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Women- and minority-owned firms: Where are they?

Big corporations earmark millions in an “inclusion initiative,” but the Carolinas are noticeably absent when work is handed out

Eleven large corporations got together last year and vowed to spend $30 million on hiring law firms that are owned by women and minorities. The spending goal was exceeded by more than $12 million, but not one of the firms receiving work through the inclusion initiative was based in North Carolina.

“To this point, we have not identified minority- or women-owned firms in [the state], though we would very much like to work with them if we came across them,” said Mark “Rick” E. Richardson, vice president and associate general counsel of GlaxoSmithKline in the Research Triangle Park, which was involved in the effort.

A similar thing happened back in 2006, when DuPont led an inclusion initiative with Shell, Sara Lee, GM and Walmart. The corporations spent more than $16 million with diverse law firms, though none of them were in North Carolina or South Carolina. More than a dozen other states were also left out.

This year’s inclusion effort involves 17 major companies, including GlaxoSmithKline, Google, Comcast, American Airlines, Microsoft, Verizon and Xerox. The spending pledge has grown to $70 million.

“We want to demonstrate through our use of these firms that they are fully qualified and able to represent corporate America,” Richardson said, “and we want to encourage others to use them as well.”

But whether firms in the Carolinas will benefit from the initiative this time around remains to be seen.

‘The big boys’

Each corporation involved in the inclusion effort follows its own criteria when it comes to hiring diverse law firms. And it seems that most large corporations prefer equally large firms with armies of lawyers, though they may not readily admit this fact.

“They want the big boys. That’s the problem,” said Karen M. Schaede, who runs a small law practice in Greensboro that represents businesses and healthcare providers. “Big corporate work is one of those things that I’ve never gone after because I don’t have the marketing funds. I don’t have as much networking power as the bigger firms.”

I.S. Leevy Johnson, one of the first three African Americans elected to South Carolina’s General Assembly since the turn of the century and the founding partner of Columbia’s Johnson, Toal & Battiste, said diverse firms have had difficulty growing because corporations have historically given priority to larger firms.

“The problem is that they are requiring firms to do large corporate work and they have not given that type of work to firms of color, therefore the firms of color have not been able to grow to large sizes,” he said. “What they need to do is to give a volume of work that mid-size and smaller firms can handle. All of their business does not require a large number of attorneys or staff.”

When asked if a law firm’s size matters, Richardson simply said GlaxoSmithKline will consider whether a firm has a record of successfully handling corporate litigation and if they have strong recommendations from other companies.

Meanwhile, only a handful of diverse law firms that practice corporate litigation call the Carolinas home. And it is surprisingly difficult to nail down the exact number of local minority and women-owned firms because most are small operations that have not been identified in any kind of comprehensive list.

Many diverse firms are unaware of the benefits of getting certified as being minority or women-owned, which gives them a leg up when it comes to securing government contracts, said Jason L. Brown, executive director and general counsel of the National Association of Minority and Women Owned Law Firms.

“Certification is not in any way, shape or form a slam dunk.” Brown said. “But it allows you to fairly compete with firms that have been around for the better part of a century. In getting government contracts, the majority of the work is still being done by the larger, non-minority firms.”

NAMWOLF is a Milwaukee-based organization that connects certified diverse law firms across the country with corporate partners, and it only has one member firm in the Carolinas, according to Brown.

“We are targeting the Carolinas for growth,” he said. “This is just the tip of the iceberg.”

Nationally, the numbers of minority-owned and women-owned firms pales in comparison to the number of firms owned by Caucasian men. Of the 167,535 law firms in the country that aren’t solo practices, only 21,575, or 12.8 percent, were female-owned and just 11,611, or 6.9 percent, were minority-owned, according to a U.S. Census Bureau survey of business owners in 2007, the latest study available.

Like their colleagues, many women and minority lawyers who are starting out choose to join large firms, which are predominantly male-owned, rather than hang a shingle. And because they tend to stay with the big firms the number of law firms owned by diverse partners has remained low, said Janet Ward Black, who heads a personal injury firm in Greensboro.

“It’s almost impossible for someone to get the kind of experience a large corporation would want unless they practice for a long time in an established, sophisticated litigation firm,” she said. “Why would someone pull out of a big firm and have to recreate that structure on their own?”

But Ward Black, one of four female presidents of the N.C. Bar Association in its 110 years of existence, said more young women are emerging from law school and are opening their own practices because they are unable to find jobs.

“Gender issues are important and I think it’s going to equalize over the next 20 years as the numbers of lawyers in active practice equalize,” she said. “There is still an old boys’ club. There is also starting to be an old girls’ club.”

Who you know

Regina H. Lewis waved goodbye to a large firm after making partner, rounded up two colleagues and started her own corporation defense practice in Columbia, becoming one of the only minority-owned and women-owned firms of its kind in the Palmetto State.

“Looking back on it, I think, ‘What, were you nuts?’” she said. “It was a huge risk for me and my family.”

Lewis left big law because she felt “isolated” as a black woman. She stressed that she was not mistreated by the firm and that many other firms have trouble retaining women of color. She said four out of five of her female African American friends have left law firms within the last eight years.

“There are not a lot of people who look like you and that in and of itself is a challenge,” she said. “I do think there is a fear or perception by the minority associate that maybe you’re there because of some affirmative action or because the firm needs diversity. You don’t want anybody to think that you’re not as smart or not as good.”

Lewis has found that more companies are willing to do business with her now that she has started her own diverse firm than when she was a partner at a bigger firm. Money is also a factor. Because of her firm’s small size, she is able to charge a lower hourly rate while still offering large firm experience.

“We work for several large corporations,” she added, “and at least one is a big player in the inclusion initiative.”

While inclusion initiatives are helpful, good old fashioned networking has been more useful for Sara “Sally” W. Higgins, who left big law three years ago to start her own business litigation practice in Charlotte.

“I have clients that are large companies and have some sort of diversity initiative, but for the most part that’s not how they end up being my clients,” she said. “It tends to be more driven by relationships and referrals.”

The success or failure of a firm, just like any business, hinges on who you know and who knows you. And despite the recent popularity of diversity inclusion initiatives, chances are that the top brass at most big corporations still know more white men than women or minorities, said Johnson, the Columbia lawyer.

“It is a result of longstanding relationships that originate in an elementary, high school, college, fraternity, law school, church – all these relationships result in them sending business to certain law firms,” he said. “Most of the people making these decisions regarding who gets their business do not know lawyers of color. That hasn’t changed.”

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