The past 15 years have seen a marked decline in the number of successful minority-owned law firms serving corporate America, concludes a recent report commissioned by the DuPont Company's Legal Function. Entitled "Study on the Status of Minority-Owned Law Firms in Today's Legal Environment,"1 the report notes that while successful minority-owned firms still exist, the vast majority of firms owned and operated by lawyers of color are surviving, not thriving.
It is becoming increasingly difficult for such firms to obtain work from Fortune 500 corporations because their business development efforts are hindered by limited access to corporate counsel, perceived inexperience, and racial bias, among other factors. This is true despite the general recognition that diverse, entrepreneurial providers of legal services play an important societal role both as an alternative source of representation for corporate clients and as an alternative career path for minority lawyers.
Challenges for Minority-Owned Firms
Industry trends such as corporate convergence and globalization of legal services have been cited as factors contributing to the inability of minority-owned law firms to compete in "the era of the large law firm." According to most of the current and former owners of minority law firms interviewed for the DuPont study, however, the real challenges are more directly related to minority status.
Lack of access to and established relationships with corporate decision-makers is viewed as the biggest obstacle facing minority-owned firms, followed closely by difficulties in overcoming the perception that minority firms lack the sophistication and experience required for significant corporate work. Overt and subconscious racial bias also continues to be a problem. Finally, increased competition from large law firms and corporate legal departments for minority legal talent creates recruiting and retention difficulties for minority-owned firms and further inhibits their ability to compete for business.
In the words of one of the 42 legal industry leaders interviewed for the study, "Most minority firms today get stalled at the 20–25 attorney size because they lack the steady stream of challenging complex legal work that will help them attract and retain talented young lawyers and build a competitive infrastructure. While many of these firms are successful, few have achieved a national, or large enough scale, presence that would help secure their role as outside counsel to corporate America." Summarized another interviewee, "Corporations looking for diversity used to seek out minority-owned firms, but with today's economy and the comfort level with larger, majority firms—who can increasingly claim to have 'diverse' counsel— minority firms are seeing less steady, meaningful work from corporate clients."
General Counsel as "Drivers"
Minority firm owners and other legal experts point to the general counsel of major U.S. corporations as the "drivers" who can influence the future of such firms. "As sophisticated purchasers of legal services, corporate legal directors have the power to assign work in a creative way that demands diversity and finds a place for minority firms in their companies' outside counsel lineup," said one interviewee.
At the same time, industry leaders agreed that minority firms must structure themselves so as best to serve corporate America's needs if they want to compete. "Minority firms must reflect today's population and have true diversity among their ranks," said one corporate counsel.
Corporate contacts also felt that smaller minority firms should specialize and offer a high-level, boutique practice. In the opinion of some study participants, small firms cannot expect to compete by trying to meet the large scope of legal needs of major corporations. Minority firms must also be savvy marketers of their practices, so that corporations see a unique approach, a cost-saving option, a beneficial diversity mindset, or a streamlined service—some benefit that will get a firm's "foot in the door" on a smaller assignment that could lead to larger-scale work.
Views on the Future of Minority-Owned Firms
The future is likely to be a "mixed bag" for minority-owned firms, at least in the near term. Several former minority firm owners who merged their firms or joined majority firms relate that they tried every avenue and had every intention of making their firms successful, but that today's climate made it extremely tough. As one interviewee said: "I'm afraid that the days of the small law firm are going the way of the small hardware store—they can't compete with the huge superstores. Right now large law firms are the superstores, and I don't see that changing anytime soon."
However, others who have merged their minority firms believe that the pendulum should swing back to a better environment for minority firms. Noted a former minority firm owner, now partner in a majority-owned firm: "I think things will come around again for minority firms. We'll get to the point where mega firms will control all the major work and eliminate competition, but then corporations will want competitive rates and the profession will cycle back to include smaller firms."
Recommendations for Action
The DuPont study identified a strong need for further discussion and action concerning the declining status and future success of minority-owned law firms. The current industry and legal association focus on the important issue of how minority attorneys fare at large, majority law firms and in-house legal departments has had the unintended result of drastically reducing the amount of attention aimed at minority-owned law firms. Issues relating to such firms have "slipped through the cracks" and should be revisited, according to study participants.
As recommended in the study, Stacey J. Mobley, DuPont senior vice president and general counsel, and Thomas L. Sager, DuPont vice president and assistant general counsel, will host a charrette this fall to review the study's findings and devise strategies to address them. The charrette will be an intensive forum intended to generate both discussion and an action plan to promote corporate support for and the future success of firms owned by attorneys of color. Participants in the charrette will include general counsel from major Fortune 500 companies, managing partners from majority firms, major bar and legal trade associations, including the Minority Corporate Counsel Association, minority law firm owners, and minority attorneys at majority firms. The charrette is intended to generate both discussion and an action plan to promote the future success of firms owned by attorneys of color.
Other recommendations of the report include:
- Based on the results of the charrette, the companies/ organizations involved could sponsor sessions on the status of minority-owned law firms at major conferences attended by corporate legal leaders. In addition, hosting a special party or networking meeting between corporate counsel and minority firm owners at such conferences would be an attempt to create for these firms improved access to decision-makers.
- With funding from major corporations, or through a co-sponsorship, a leading legal organization could develop an effective clearinghouse/directory of minority-owned law firms.
- Interested parties could commission a survey of general counsel to track the amount of work being assigned to minority firms, and which minority firms are doing Fortune 500 work.
- Key legal associations could include research on minority law firms in future studies on the profession, such as the American Bar Association's "Miles to Go" report.
- Interested parties could support development of education and training sessions for minority-owned firms on marketing, networking and doing business with major corporate law departments. Workshops, on-line training and/or a training toolbox could be developed with the proper sponsorship/funding.
- Finally, a committee of interested parties could be formed to explore creation of a "new paradigm" of partnership between major corporations and minority-owned law firms.
Hinton J. Lucas is associate general counsel of DuPont and a member of the MCCA® board of directors. Ramona E. Romero is corporate counsel and manager of the diverse legal supplier network at DuPont Legal.
- The study was conducted by Crosby Marketing Communications, a member of DuPont Legal's network of preferred service providers. Crosby conducted an extensive review of relevant published sources and extensive interviews of 42 legal industry leaders, including corporate counsel, owners of minority firms, minority lawyers at majority firms, leaders of several bar organizations (including the MCCA, ACC, ABA, and the major minority bars) and academicians. Because the consensus was that women have achieved critical mass in the legal profession, even though their presence has not been sufficiently established among the top positions in the law firms, it was decided that the study would concentrate on the status of minority firms owned by "attorneys of color."
From the September/October 2004 issue of Diversity & The Bar®