Corporate Efforts to Enhance the Business Case for Diversity
Bill Lowrey, Carolyn Benton Aiman, and John Esquivel of Shell Oil Company
In an effort to snag a diverse group of outside attorneys, some large corporations are casting a wide net, including jump-starting initiatives aimed at minority attorneys and law firms.
Bucking a fifteen-year trend that saw a decline in the number of Fortune 500 companies hiring minority firms, according to a study commissioned by DuPont on the status of minority-owned law firms, corporations such as Wal-Mart Stores, Inc., and Shell Oil Company have increased their efforts to hire and retain the best and brightest outside minority- and women-owned firms to work on its behalf while paying special attention to diversity.
Whether it’s minority or women-owned firms or minority and women attorneys in general, many minorities have had a difficult time establishing themselves in the corporate world. Industry experts say that limited access to corporate counsel and preconceived notions are common obstacles that have kept minorities from teaming up with major corporations.
Wal-Mart: Enhancing Internal Diversity; Finding the Right Firms
Fostering diversity in the legal profession makes good business sense. In an increasingly competitive environment, experts agree that diversity will play an increasing role in the success of a corporation.
Realizing that corporations cannot depend on old models when it comes to recruiting minorities, last year Wal-Mart began to identify women- and minority-owned law firms across the country by contacting associations, getting their hands on membership lists, and taking a good look at attendee lists for events sponsored by minority bar associations.
Miguel Rivera, associate general counsel for Wal-Mart, explains that it’s part of an overall strategy that Wal-Mart began about five years ago. “It began first with Wal-Mart looking at itself and looking at the diversity of the attorneys in-house, and doing a rather large effort to increase the number of women and minority attorneys that were hired internally,” reflects Rivera.
After growing from an in-house department of about 55 lawyers to just under 160, the corporation began to look at outside counsel and the partners responsible for the relationship between Wal-Mart and the firms.
“We initiated the process and asked outside firms to present us a slate of their partners, in which at least one had to be a woman and at least one had to be a person of color,” says Rivera, adding that there was a detailed process of evaluating these partners.
Wal-Mart also looks at good-faith efforts when selecting outside counsel to see if the majority firms are supporting diversity initiatives such as attending and participating in diverse bars, becoming involved in pipeline programs, and offering internships and scholarships.
According to Rivera, Wal-Mart performed its own internal surveys for about four years, looking at the diversity of its top 150 law firms. Although he notes that the job is never done because there is so much work to do with minority and women representation in the bar, Wal-Mart felt that it had made strides in beginning to look at how much of its work is being done by minorities and women in the law firms.
Rivera notes that, as a result of these efforts, Wal-Mart moved roughly $60 million of its existing businesses to women and minority partners at those majority firms. When selecting outside firms, Rivera explains that the makeup and complexion of the firm itself plays an important role. A majority-owned firm should be promoting diversity in the profession. “Diversity is one of the three things we measure outside counsel on,” he relates, adding that performance, cost-effectiveness, and diversity are all important.
Although it may seem like a simple task, part of the challenge in increasing diversity is identifying women- or minority-owned law firms. It took more than a phone call and a little legwork for Wal-Mart to get an accurate and inclusive list. “I didn’t expect that it would be as difficult as it was,” admits Rivera, who shares that, as he went to the various bar associations he found that their membership lists were smaller than expected.
Research and interviews with a number of firms helped Wal-Mart to figure out which were minority- or women-owned. “There are a lot more women and minority law firms out there than are on the list as members of organizations, so through word of mouth, attending women- and minority-owned bar association meetings, by research, and looking at attendee lists, we’ve been able to identify 50 around the country and would like to identify more,” Rivera notes.
“All of that culminated in a directory of lawyers that we put together last year that are pre-approved to do Wal-Mart work for us,” declares Rivera, adding that the directory is available on the legal department’s Web site, and that Wal-Mart is encouraging everyone to take a look at it.
Tracking progress is important to ensure that talk turns into action. Wal-Mart is working on measuring the number of billable hours that are flowing to women- and minority-owned law firms, and reporting that number to an executive steering committee that is examining the diversity of all of Wal-Mart’s vendors.
In Florida, for example, Rivera said that the corporation was able to identify two Hispanic and one Indian law firms that are all doing a significant amount of work for Wal-Mart. He also found several women-owned law firms in California accounting for a large amount of work.
“As people are continuously asking us who can do work for us in Texas, for example, we always first go to our list and the firms we recommend to our in-house lawyers,” Rivera explains, adding that Wal-Mart always tries to include one or two minority- and women-owned firms in any group of law firms it recommends.
Five Corporations Strive for Diversity
The corporate legal departments of Wal-Mart, DuPont, General Motors, Sara Lee, and Shell Oil Company all have rosters of minority-owned firms. The leaders of the five departments spearheaded an effort with their in-house attorneys to make certain that minority-owned firms got a bigger piece of the legal spend.
The 2004 report by DuPont, entitled “Study on the Status of Minority-Owned Law Firms in Today’s Legal Environment,” prompted the joint initiative, which began in 2005, according to Diane Nowak-Waring, account supervisor at Crosby Marketing Communications in Annapolis, Md., who is involved with the corporations on the project.
Putting their “money where their mouths are,” the five Fortune 500 corporations surpassed their goal to spend $16 million dollars on outside legal work done by minority-owned law firms during 2006. That goal represented a significant increase over the combined amount of business that the companies historically have placed with minority-owned law firms in a year. Leaders in these five corporations are encouraging other corporate legal departments to join them in a disciplined process of placing work with minority-owned firms.
“We’re working on a brochure and a Web site that list the minority- and women-owned law firms that many of the companies use,” explains Nowak-Waring. She expects the publication and the Web site to be completed soon. They both will include a list, arranged by state, of dozens of minority- and women-owned law firms across the country that are employed by DuPont, Shell, Wal-Mart, and other corporate legal departments. (See “Diversity News,” page 66 of this issue.)
In addition to this initiative, Nowak-Waring notes that DuPont’s Legal department has assembled its own reference material that lists the minority- and women-owned firms that it uses, and publishes it on the DuPont Legal’s network Web site—www.dupontlegalmodel.com.
Striving for diversity should be a company-wide effort on all levels, and many agree that it could not be accomplished without strong support from the top. Bill Lowrey, senior vice president, general counsel, and corporate secretary for Shell Oil Company, said that “a commitment to diversity and inclusion is supported at the highest levels of Shell, and supported by each of the separate businesses and corporate functions, including the legal department.”
Lowrey notes that Shell Legal has been a strong supporter of diversity and inclusion, including under his predecessor, Cathy Lamboley, and that support is continuing under his leadership.
The Shell Approach
Carolyn Benton Aiman, senior corporate attorney and, after a four-year tenure, outgoing co-chair of Shell Legal’s diversity and inclusion committee, relates that Shell has a long-standing commitment to diversity and inclusion, including supplier diversity. Diversity and inclusion at Shell translates into understanding Shell customers and attracting talent to the organization, according to Aiman. When hiring law firms, Shell actively seeks out diverse talent both in large firms and in minority- and women-owned law firms.
Within the majority firms with which Shell does business, Shell teams include a diverse group of attorneys, according to Aiman. Women and minority attorneys at majority firms are a part of the company’s approach to finding the best solutions, she explains, adding that Shell does business with about 26 majority firms, and that each firm has a focal point or client representative. Aiman notes that those representatives include both women and lawyers of color.
Furthermore, Aiman says that “Shell has significantly expanded its efforts to do business with minority- and women-owned law firms.” The results of the report by DuPont that mentions a lack of access to the decision makers as a glaring concern and an obstacle preventing minority outside counsel from working with Fortune 500 corporations was not a surprise to Aiman: “Every corporation has a different approach to how work is handed out to law firms. The key is finding out how decisions are made. That is not always an easy task, to ascertain who’s handling what in a legal department.” Shell began to focus on access. Aiman describes the ways in which the company has provided access to the decision makers. “One of the things that we’ve done is created opportunities for people to meet, interact, be interviewed and let us know who they are.”
For instance, Aiman and the department’s diversity and inclusion team organized what she calls a reception and “round robin” event. At the event, 25 minority- and women-owned law firms were invited to Shell for a joint reception and information session so that Shell could get to know the firms.
“We asked them for their most significant practice area and matched them to lawyers practicing in that area, in their area of the country,” explains Aiman. For example, a firm that does environmental litigation on the West Coast would be matched with an environmental lawyer at Shell who practices on the West Coast.
Aiman reflects that hiring decisions within Shell Legal are generally made by the lawyer who is managing the case or conducting the transaction, adding that her colleagues remind her that people rarely hire law firms—rather, they hire lawyers. “In order to do that, they have to get to know who they’re hiring and spend time with them discussing what experiences they’ve had, what kind of work they do and whether they have the capacity (meaning sufficient number of attorneys) to handle matters.” In-house counsel have a lot of work to do and want lawyers that can provide quality, cost effective, professional, solution-oriented legal work. The round robin event allowed minority- and women-owned law firms to meet with decision makers (i.e., hiring attorneys) to share their expertise and introduce themselves or, in many cases, expand their relationships with Shell. In this way, the law firms’ marketing efforts were directed to the people that could make a decision related to them.
A year after the initial round robin event, Shell picked about 10 to 15 firms that had participated and were doing work for Shell and invited them for another visit to Shell to meet other colleagues at the corporation. They were invited to these “lunch and learns” to discuss a particular topic and be further introduced to the law department or simply meet other attorneys over lunch. The following year, a few new firms were introduced to the organization.
“The primary thing we were trying to do was to identify firms that we thought were a good match for us, that did the kind of work we do in the area of the country that we need it done and match those firms to lawyers who did the same thing,” explains Aiman, adding that these efforts represent a “win-win” situation for Shell and the law firms. “The feedback, both from the law firms and the in-house lawyers, was uniformly positive.”
“It was clear to me that, if we connected talented firms with in-house attorneys at Shell who routinely hire, the rest would follow,” notes Aiman, who added that the leadership team also established a specific goal for the minority- and women-owned firms. She adds that Shell’s legal department expects to hold a similar event to involve the several new hires the department has made during the last 18 months.
Supporting the fact that Shell recognizes talent can be found in many places, Lowrey says, “By looking broadly, we find the right solutions for the organization, while at the same time supporting Shell business principles for working with communities in which we do business.”
Evaluations are an important piece of maintaining diversity and inclusion, according to Aiman. Shell evaluates its minority and majority firms in the same way, giving them critical feedback on the issues, good or bad: “We don’t want to just stop calling, leaving them wondering; it’s a great way to give feedback so that people know what to expect and if necessary, how to improve.”
Change on the Horizon
Like Wal-Mart, Shell shares its information on minority and women attorneys with colleagues in its legal department. Shell has a directory on its internal Web site that resembles a computer-generated map of the United States. The map tells in-house attorneys which minority, women and majority firms do work for Shell in any state, and includes their evaluations from past services the firms have provided.
Both Aiman and Rivera agree that more change is on the horizon. “We can only hope that it will catch on,” says Rivera, adding that a lot of people have been asking “how they did it.” He has spoken with three other large corporations that asked if Wal-Mart would share its list of women- and minority-owned law firms. This type of dialogue leads him to believe that many other companies are starting to take a look at diversity. “They’re intrigued by what we’ve found, especially when you cast a net as wide as we had,” Rivera noted.
Aiman contends that “change is already here, but there is always more to do.” She adds that she is often asked to speak with other corporate law departments and law firms about diversity and inclusion in the profession. “Successful corporations understand that their customers expect them to do business in all of the communities that those corporations serve,” reflects Aiman. “Corporate legal departments have the opportunity to support their organizations, and seek the talent they need to represent those entities. ”
Shell has a limit on the number of law firms that it uses and does not regularly expand that list, adds Aiman. “Ultimately, our desire is to give our company the best legal work we can give it. Expanding your relationship with a diverse group of lawyers and limiting the amount of law firms that do your business means we are selective about the firms we do business with, and we have found the talent we need to support Shell. Ultimately, our task is to best serve Shell and its legal needs.”
Aiman adds that the legal profession as a whole is struggling to contribute to its own diversity and inclusiveness, and thinks that general counsel and corporate law departments have a great opportunity to help diversify the face of law. “Corporate law departments have the opportunity to take the lead in diversity and inclusion in the profession. A simple start is simply communicating expectations to the law firms that represent them.”
“The diversity of opinions and perspectives are critical to any business,” notes Rivera, adding that “the more advice we can get from a more diverse group of attorneys with different perspectives, the more it’s going to benefit our business and the more it will help Wal-Mart, in a sense that our customers are diverse. If we are setting a policy and doing things from a legal perspective in a way that is consistent with the broad views of our customer base, that will, of course, help our business as well.”
Rivera advises corporations looking to diversify their outside counsel to look first at the diversity in their own legal departments. He notes that it’s difficult to ask someone else to do something that you’re not doing yourself. He insists that corporate lawyers not just attend conferences sponsored by the Minority Corporate Counsel Association, the federal bar associations, and others with one or two attorneys, but with groups of attorneys as well.
“We’re searching for excellence,” concludes Rivera. “We want the best lawyers to represent us in-house, and why should we limit ourselves?”
John Esquivel, associate general counsel and chief ethics and compliance officer with Shell Legal, said that “diversity without inclusion is ineffective, but together provides better solutions, better problem solving and, in the end, better legal services for Shell Oil Company.”
Aiman believes that the two main reasons Shell has been so successful in promoting an environment of diversity and inclusion in the legal department is due to leadership support by people like Esquivel and Lowrey, “our general counsel, both the current one and his predecessor, and the general counsel’s direct reports are committed to diversity and inclusion and that is evident in their behavior.”
Secondly, Aiman adds that the department has treated the issue of diversity and inclusion as a fundamental part of how it does business, both within the organization and when doing business with outside entities. Everyone has a responsibility to diversity and inclusion and contributes accordingly.
Shell evaluates and rates all of their law firms, on five separate factors, including partnering, quality, cost effectiveness, professionalism, diversity, and inclusion. “Each of these factors is individually evaluated and important and each contributes to the best work, best solutions, and best product for Shell.”
“If we evaluate a firm for our organization—minority, woman-owned, or majority—and the firm is not a good match, then the firm doesn’t get the work, it’s that simple. If, on the other hand, we find a firm that has what we need and it makes sense to hire them, then it makes sense for Shell,” concludes Aiman. DB
Carisa Chappell is a freelance writer based in Bowie, Md.
From the March/April 2008 issue of Diversity & The Bar®