INHOUSE INSIDER Forum, News, and Career Center for In-House Counsels

31Jul/080

Bad News for Associates: Some Firms are in a Firing Mood Too.

Cadwalader, Wickersham & Taft announced Wednesday it is laying off 96 lawyers in the United States and Britain due to continued slowness in real estate finance and securitization, the firm's core practices. It is the second round of layoffs for the firm, which slashed 35 lawyers in January.
Cadwalader is not alone in having to resort to layoffs. Most law firms with large practices focusing on mortgage-backed securities are facing the dilemma that the market for such securities, decimated by the wave of defaults among the underlying mortgages, has come to a virtual standstill. Thacher Proffitt & Wood, Cadwalader's neighbor in lower Manhattan's World Financial Center, also has had a large number of layoffs, as has McKee Nelson, a boutique firm heavily focused on securitization.

Earlier this year, 460-lawyer Chicago firm Jenner & Block axed equity partners, or the second year in a row. At least 10 partners were told to give up their equity and some were asked to leave. Last year, the firm stripped equity status from between 15 and 20 partners. But Jenner & Block was not alone. Mayer Brown, Winston & Strawn, and Sonnenschein, Nath & Rosenthal made similar moves.

The U.S. law firms reported to have laid off attorneys are Philadelphia-based Blank Rome; New York-based Cadwalader; Dechert; DLA Piper; New York-based McKee Nelson; and Washington-based Patton Boggs.

Others are Pillsbury Winthrop Shaw Pittman; Atlanta-based Powell Goldstein; Sonnenschein Nath & Rosenthal; Sutherland Asbill & Brennan; New York-based Thacher Proffitt & Wood; and Thelen Reid Brown Raysman & Steiner.

These layoffs may have been inevitable, and more may be coming because of corporate law slowdowns in various practice areas, including finance, M&A, private equity, and real estate.

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28Jul/080

Bad News for Law Firms: Half the GCs Surveyed Are in a Firing Mood

Law firms hired by in-house counsel may be seeing less work this year, or none at all, according to an ABA Journal post.

About half the chief legal officers surveyed by Altman Weil say they have fired, or may fire, some of their outside counsel, the Recorder reports. Last year only around one-third were giving their outside counsel the ax, or considering it.

Even law firms that are retained may see less work. Twenty-six percent of the chief legal officers said they planned to decrease their use of outside counsel this year, compared to around 16 percent who had such plans last year.

Asked to rank the most important factors that could improve their working relationships with outside firms, the respondents identified discounted fees, improved responsiveness, better project staffing and familiarity with the company’s business as most important.

The legal consulting firm’s survey (PDF), conducted in May and June, garnered responses from 126 chief legal officers, nearly half of them from companies with revenues of $2 billion to $10 billion.

Meanwhile, the survey holds some good news for lawyers who want to move in-house. Almost half the general counsel planned to hire more in-house lawyers, compared to around 40 percent last year.

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23Jul/080

2008 GC Compensation Survey: Let the Good Times Roll!

The Corporate Counsel's 2008 GC Compensation Survey shows that the top legal officers at Fortune 500 companies raked it in, mainly dues to lucrative cash bonuses that swell year after year.

Bonuses Boost GC Compensation Levels. While the average salary stayed essentially stagnant at $567,195, the average bonus/nonequity incentive compensation jumped 17 percent, to $1.1 million. That's double their average salary.

In 2002, the average bonus was $550,397 and exceeded the average salary of $503,545 by 9 percent. Five years later, the average bonus surpassed salary by an eye-catching 100 percent.

As for equity -- in the popular form of outright stock grants -- the trend also is up, by nearly 17 percent. Only two lawyers on the list did not receive either a stock award or option: Peter Janzen of Land O'Lakes Inc. and Gregory Doody of Calpine Corp.

Salaries Remains Low, But Steady. Lost amid all this talk of bonuses and stock is the lowly cash salary. In fact, salaries continue to make up the least significant portion of GC salaries. They held steady in this year's survey. Why? Corporations can't take tax deductions for any portion of a salary that exceeds $1 million. And if the company has a difficult year, they typically don't trim the salaries of top earners, preferring to trim the extras like bonuses and stock grants.

Stock Awards: Where the Money Is. Average stock awards increased nearly 17 percent this year, to $1.3 million, up from $1.1 million in 2006. Overall, 94 GCs received stock awards that totaled more than $124 million, a 23 percent increase over 2006. James Ellis of AT&T, who retired in 2007, got the largest stock award of $12,389,605. That award alone was 83 percent larger than the highest stock award last year.

Stock Options: Not As Fashionable. Meanwhile, the less fashionable stock option, the darling of the tech bubble years, fell 10 percent, to a relatively paltry average of $720,470. Volatility in the stock market didn't stop 56 attorneys from cashing out their stocks and realizing a gain of an average $2.4 million, though.

Make no mistake, though: While option grants are falling out of favor, option cash-outs, along with stock awards, are still making GCs very rich. Despite the ups and downs of the stock market last year, 56 general counsel made more than $139 million when they cashed in stock options last year. The year before, 56 GCs cashed in their options for a total of $155 million. The biggest winner was Donald de Brier of Occidental Petroleum Co., who made $21.6 million when he cashed out options. The year before, de Brier made nearly $10 million cashing in.

Total Compensation. Overall, these GCs walked away with nearly $304 million in total salary, bonuses and stock cash-outs in 2007, slightly less than the $307 million they took home the previous year. "Any general counsel who wants big money gets stock," says Rees Morrison, president of Rees Morrison Associates, a consulting firm for legal departments. "That's where the huge money is. If you're a GC, your money is in equity."

The Big Winners. Give Gary Lynch credit for making a dramatic entrance. The chief legal officer for New York-based Morgan Stanley debuted on Corporate Counsel's annual survey of general counsel compensation with a whopping $6.3 million bonus. That large pot of cash earned him the No. 2 spot overall on our elite roster. Despite the fact that financial institutions such as Morgan Stanley, which are reeling after the collapse of the subprime mortgage market.

Not everyone in the financial sector has had such a soft landing. Take John Finneran Jr., at the credit giant Capital One Financial Corp., for example. In 2007 Finneran's total take-home pay shrank by almost half, to $1.4 million. His discretionary bonus alone dropped 46 percent, to $690,000, compared to $1.3 million the year before. He made $42,029 by cashing in his stock options, a fraction of the $850,485 he cashed out in 2006.

Booming Industries to Watch. GCs in booming sectors of the economy fared better than many of their counterparts.

Oil & Gas. The Irving, Texas-based Fluor Corp. designs and builds everything from hospitals to power plants, but the oil and gas sectors account for about 50 percent of its annual sales. And like the record-breaking profits of oil and gas companies, Fluor's stock price rose from $109 a share last summer to about $186 at press time. The nonequity incentive compensation for the company's GC, Lawrence Fisher, skyrocketed nearly 275 percent, to $1.6 million.

Metals. It's no surprise that the largest incentive bonus of $7.7 million went to Jon Walton, general counsel of specialty metals manufacturer Allegheny Technologies Inc. The company's net income rose 30 percent last year, to $747 million, and Walton walked away with $8.1 million in salary, bonus and stock sales, 55 percent more than what he took home last year. That kept him securely seated in the survey's top spot for the second year in a row.

Financial Securities. The chief legal officers for financial securities companies once again received some of the meatiest stock awards, an average of $4 million, which is higher than any other industry.

Telecommunication. The six telecommunications lawyers were next on the list. They got an average stock award of $3.9 million, thanks in large part to Ellis' sizable stock award. Without that award, the average would be $2.2 million.

Entertainment. The five attorneys for big media companies earned a cushy average bonus of $2.2 million. Only the $3.5 million bonus awarded to The Walt Disney Co.'s Alan Braverman was tied to company performance.

Aerospace & Defense. Top lawyers in the aerospace and defense industries earned millions by cashing in their stock options, too. Their six general counsel made an average of $3.5 million each by selling their stock in 2007. Roger Cook of Portland, Ore.-based Precision Castparts made the most, $5 million.

What Does This Mean Going Forward? Bonuses and stock awards will likely continue to inch upward, but they'll be increasingly tied to market fluctuations and their company's performance on Wall Street for years to come. That means that it's anyone's guess whether or not the survey's $6 million man, Gary Lynch, or any top lawyer at an investment bank, will make it to the top of the list next year.

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23Jul/080

Corporate Counsel Compensation Survey (2008)

The Top 10 GC Cash Compensation Packages.

This year's top paid GC's, in combined salary, discretionary, and incentive form:

1 Jon Walton Allegheny Technologies Incorporated $8,133,733
2 Gary Lynch Morgan Stanley $6,608,375
3 Thomas Russo Lehman Brothers Holdings Inc. $5,000,000
4 Alan Braverman The Walt Disney Company $4,450,000
5 Louise Parent American Express Company $3,969,591
6 Richard Massey Alltel Corporation $3,859,492
7 Paul Cappuccio Time Warner Inc. $3,600,000
8 Russell Deyo Johnson & Johnson $3,515,816
9 Louis Briskman CBS Corporation $3,305,000
10 Gary Jacobs MGM Mirage $3,260,332

The Best Industries.

Industries with five or more GCs among the 100-best paid legal officers:

Aerospace and Defense

Jay Stephens Raytheon Company $1,415,461
David Savner General Dynamics Corporation $1,215,000
Terrence O'Donnell Textron Inc. $1,207,500
Kathleen Karelis L-3 Communications Holdings, Inc. $1,200,000
Roger Cooke Precision Castparts Corp. $1,191,375
Terrence Linnert Goodrich Corporation $1,023,818

Entertainment

Alan Braverman The Walt Disney Company $4,450,000
Paul Cappuccio Time Warner Inc. $3,600,000
Louis Briskman CBS Corporation $3,305,000
Michael Fricklas Viacom Inc. $2,809,875
Lawrence Jacobs News Corporation $2,650,000

Telecommunications

Richard Massey Alltel Corporation $3,859,492
Richard Baer Qwest Communications $2,063,676
William Barr Verizon Communications Inc. $1,848,000
Larry Hunter The DirecTV Group, Inc. $1,399,276
Grier Raclin Charter Communications $1,119,342
James Ellis AT&T Inc. $1,075,431

Utilities

Hyun Park PG&E Corporation $1,786,149
J.A. Bouknight, Jr. Edison International $1,288,714
Marc Manly Duke Energy Corporation $1,286,547
G. Edison Holland, Jr. Southern Company $1,246,997
Randall Mehrberg Exelon $1,143,345
William Torgerson Pepco Holdings, Inc. $1,117,977
Gregory Butler Northeast Utilities $1,114,194
Javade Chaudhri Sempra Energy $1,068,554
R. Edwin Selover Public Service Enterprise $956,463
Scott Rozell CenterPoint Energy, Inc. $835,800

The Top Best-Paid Women GC's in the Top 100.

These 12 women made the list of the 100 top-paid GCs:

Louise Parent American Express Company $3,969,591
Carrie Dwyer The Charles Schwab Corporation $3,200,048
Carol Ann Petren Cigna Corporation $2,710,962
Lauri Shanahan The Gap Inc. $1,557,116
Kathleen Karelis L-3 Communications Holdings, Inc. $1,200,000
Ellen Kaden Campbell Soup Company $1,127,377
Suzanne Bettman R.R. Donnelley & Sons Company $1,092,824
Maura Smith International Paper Company $1,074,425
Fay Chapman Washington Mutual, Inc. $1,062,000
Mary Gustafsson Trane Inc. $1,025,700
Candace Cummings V.F. Corporation $981,000
Laura Stein The Clorox Company $925,000
Average $ 1,660,504

The Biggest GC's Bonuses From the Top 100.

Last year’s largest bonuses, in combined discretionary and incentive form:

Jon Walton Allegheny Technologies Inc. $7,720,000
Gary Lynch Morgan Stanley $6,308,375
Thomas Russo Lehman Brothers Holdings Inc. $4,550,000
Alan Braverman The Walt Disney Company $3,450,000
Richard Massey Alltel Corporation $3,343,338
Russell Deyo Johnson & Johnson $2,746,200
Carrie Dwyer The Charles Schwab Corporation $2,701,715
Paul Cappuccio Time Warner Inc. $2,600,000
Gary Jacobs MGM Mirage $2,560,332

Source: Corporate Counsel Survey, August 2008.

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22Jul/080

When All Else Fails…How About a Bribe?

Microsoft General Counsel Brad Smith announced that the company has launched a new "Law Firm Diversity Program" that uses a “pay for performance” approach to enhance diversity in the legal profession.
Under this program, Microsoft is changing its legal fee structure for 17 Premier Preferred Provider (PPP) law firms that collectively handle more than US$150 million of legal work for the company annually. Each firm will be eligible for a 2% quarterly or annual bonus based on whether it achieves concrete diversity results.

Firms can choose from two alternative diversity goals. The first is a 2% increase in the hours worked by U.S.-based diverse attorneys as a percentage of total hours worked on Microsoft matters, compared with the same time period last year. The second goal is a 0.5 percent increase in the total number of U.S.-based diverse attorneys employed by the firm.

In other words, the first goal focuses on diverse representation for Microsoft, while the second focuses on diverse representation in the firm’s U.S. offices overall. Microsoft practices what it preaches; 44% of its senior counsels are women or minorities, and 50% its junior level attorneys are women or minorities.

Microsoft’s efforts to increase diversity within its outside counsel are noble, but the solution it offers is questionable. Providing “bonuses” for law firms to do what they should be required to do ethically, morally, and professionally in the first place, is a sad commentary on the state of our legal industry.

It is easy to understand Microsoft’s effort to try something new. Four year since the "Call to Action" was launched, little has changed in terms of law firm diversity. Yet, the solution it offers leaves much to be desired. Are incentives without sanctions little less than a bribe? And more importantly, is this an effective solution?

Throwing money at a problem has seldom yielded correct solutions. This is especially true when one considers the types of revenues generated by big U.S law firms. As reported by The Lawyer (March 24, 2008), U.S. firms had their best year ever in 2007, with the top 50 firms generating collective revenues of $46.8 billion!

Will a 2% bonus on hours already worked, as proposed by Microsoft make a difference one way or the other? That’s unlikely for big firms who are already guaranteed to make $150M in fees.

Is it the solution itself that is problematic, or the fact that it lacks teeth to be effective? It’s probably a little bit of both. It is difficult to get over the unpleasant taste of companies giving bonuses, in what essentially mounts to “bribes” to law firms to do what they should be doing in the first place. Perhaps it is part of the solution. While it is evident that in order to effect tangible change, companies need to tie their demands to the purse strings of law firms, spending more money on a broken system will not alone fix the problem.

What we need is accountability from law firms. Law firms need to develop business plans and strategies that fundamentally incorporate diversity as part of their structure and organization, together with measurable benchmarks and goals. In order to obtain this, companies should implement a combination of sanctions and incentives that have measurable impacts on the revenues of big law firms.

If Microsoft had in addition to its "Law Firm Diversity Program" implemented a measure whereby it committed to only engage law firms that either increased the hours worked by its U.S.-based minority attorneys by 2%, or increase the total number of their U.S.-based minority attorneys by 0.5% - then the policy would have had the kind of teeth to effect real change. Threatening $150M in revenues has a lot more of an impact than potentially adding another $30M to the pot.

Many corporate clients already reward diversity in their outside counsel (not in terms of bonuses per se, but by giving these firms more work, preferred provider status, or by hiring them in the first place)—yet, the numbers of women and lawyers of color at those firms have not changed much. Obviously, rewards alone, whether monetary or otherwise, are not sufficient to effect change in this situation.

The Call To Action pledged that corporations would end relationships with law firms that hadn't made significant progress in becoming more diverse. Yet, few companies have committed to this pledge. If they had, the legal landscape might look quite different.

Susan Hackett, senior vice president and general counsel of the Association of Corporate Counsel, who has been involved in Call To Action, stated in a recent (May 2008) National Law Journal article that companies were not ready to make this kind of sacrifice.

"While they may be committing to diversity principles, that's a difficult decision when talking about firms that have done good work for you," Hackett stated. Also, general counsel executives could feel hypocritical judging the diversity of the law firms they use if they haven't made substantial progress in their own law departments, she said.

If this is the case, then how can companies ask law firms to increase diversity within their ranks when they are not committed to doing the same within their own legal departments, or are unwilling to make the necessary sacrifices themselves? Most probably can't. On the other hand, a company like Microsoft, that has made a genuine commitment to diversity, had an opportunity to take a stance and initiate real change. Instead, it stopped one step short…and so will its law firms.

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21Jul/080

Do GC’s Really Want Change In The Legal Industry?

Last week we posted a Blog discussing the virtues of virtual law firms (See "The Virtual Law: A Dream Come True"). It is not surprising that as a response to increasingly tight corporate budgets, some attorney have come up with creative solutions to provide GCs with alternatives to the large law firm hourly billable rate.
New companies offering outsourcing solutions or virtual law firms are cropping up across the country (see "Tighter Budget Make Outsourcing Attractive").

Where U.S. Companies and Law Firms once resisted outsourcing, citing concerns over quality, and where virtual law firms were once viewed with skepticism, today they are not only popular alternatives, but also solutions that cost-conscious GCs can no longer afford to ignore.

Can GC's do away completely with the current large law firm model? Absolutely. The real question is whether they want to. While GC's continue to complain over high billable rates, bad service, limited business understanding, and the lack of diversity in large law firms, they are nevertheless continuing to engage them.

Despite GC's many attempts to reform law firms - little has changed to address these concerns. Employing large law firms is like running your car on gas. You know that it is expensive, that it is only going to get more expensive, and that it pollutes; yet most of us keep driving that $4+ a gallon gas guzzling car...despite the fact that hybrids are available in the market. Why? Well, because hybrids just aren't yet as good as regular oil guzzling cars. They can cost more upfront, are harder to fix, and don't go as fast.

The same can be said for GC's who want their companies protected by the liked of the top tiered law firms that make up the Magic Circle and AMLAW 100. GC's don't want good enough quality; they want top-notch quality. And despite the fact that we all know that quality does not necessarily mean more expensive - it's still hard to get away from this line of thinking when there is so much riding on the line. As attorneys, we are typically not risk takers, and most of us don't want to go outside the box.

Do more expensive law firms produce better results? No one has been able to answer this question conclusively.

And for that, GC's are willing to continue to put up with all the shortcomings that come with working with the big law firms.

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16Jul/080

The Virtual Law Firm: A Dream Come True?

Imagine this, you are a law firm attorney working from home - every day - with no billable requirements...and yes, you are a partner too! No this is not a dream, really. Sillicon Valley Lawyer-entrepreneur Craig Johnson is making this a reality. Johnson who created the Venture Law Group, is onto his next big thing: a virtual law firm!

Johnson and 14 other lawyers unveiled this new firm, called Virtual Law Partners, on Friday. The idea is to have more work-life balance, work from home, save on overhead, charge clients less, and forge a new model for the legal industry.

The new firm, VLP, will target all types of companies for all types of legal work aside from litigation. Although working remotely isn't new for lawyers, Johnson said VLP is different because it aims to be like the other top firms in the country, with hundreds of lawyers, just without offices.

VLP is eschewing the normal math that's used by large law firms where one-third of the revenue goes to salaries, one-third goes to overhead, and one-third goes to profits. They're also getting rid of minimum billable hour requirements and high-priced associates.

Instead, attorneys will get 85 percent of what they bill. And without having to pay for offices and associates -- the firm will instead employ a few specialized paralegal types with all attorneys being partners -- those billing rates will be about half of what big-firm lawyers bill, Johnson said.

Although VLP lawyers can set their own rates, he estimates that an average billing rate might be about $400 an hour.

Sounds like a dream come true to me - both for lawyers and clients alike. In this day and age, it's the way many professionals are able to put in the long hours and still maintain some family and personal time, while avoiding the expenses of commuting, child care, etc. It's also a clever way to save clients expenses - those associated with downtown marbled floor, Class A office buildings that law firms are so fond of.

No longer just for techies, working virtually is becoming more and more common among architects, management consultants, counselors, journalists—just about anyone whose job is centered around information and communication.

Naysayers might say that the "virtual firm model" cannot work on the scale proposed by Johnson - but they offer no specific reasons, other than the need for big infrastructure. Today, there are virtual solutions that address these potential issues. Working virtually - "working together, apart" -- require communication, collaboration, and project management. The present generation of software aims to support work within each of these functions, and provide solution for larger-scale virtual office teams and projects.

And where there might be a technological gap, what better place to test out this model than in Silicon Valley?

It's certainly a model worth trying out - both for attorneys looking for a more balanced lifestyle, and for corporate clients looking for more reasonably priced legal services. It's a win-win proposition.
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15Jul/080

Nokia Ends GC Search With An Internal Promotion

Nokia has found a new global general counsel after a 10-month search, deciding to promote internally for the role.
Acting chief legal officer Louise Pentland will become Nokia's permanent general counsel. Pentland was vice president of the legal team for North America before her promotion to the top job. She will oversee a team of more than 150 lawyers, operating in around 130 countries.
Pentland has had a distinguished career of more than 10 years in Nokia's legal team, during which time she held the position of chief legal counsel for the company's Enterprise Solutions unit.
She will replace Swedish-born general counsel Carl Belding, who joined Nokia in 2006 from IBM, where he was head of legal for Europe, Middle East and Africa.
BBelding stepped in for Ursula Ranin, who was general counsel from 1994 to 2005. He died last September after falling from a hotel balcony in Switzerland.

Pentland's appointment comes as Nokia faces a grueling series of patent disputes in the High Court. To add to the company's IP woes, Bird & Bird hired Nokia's head of European patent litigation in February this year. Ari Laakkonen joined the firm as a senior consultant after spending four years at Nokia managing litigation across European jurisdictions.

Nokia is facing four separate patent license disputes against Interdigital Technology Corporation, with the hearings due for April, June and October 2009 as well as one in October this year. Bird & Bird is acting for Nokia, facing Wragge & Co on the other side. The present generation of software aims to support work within each of these functions, and provide solution for larger-scale virtual office teams and projects.
And where there might be a technological gap, what better place to test out this model than in Silicon Valley?

It's certainly a model worth trying out - both for attorneys looking for a more balanced lifestyle, and for corporate clients looking for more reasonably priced legal services. It's a win-win proposition.

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14Jul/080

Bastille Day: A Time of Remembrance.

Bastille Day is the French national holiday, celebrated on July 14th each year.

Contrary to the common belief in France and abroad, Bastille Day does not commemorate the storming of the Bastille on July 14, 1789, but rather the Fête de la Fédération, the former having been judged, in 1880, too bloody a day for a national celebration!

July 14, 1789 started the French Revolution that toppled King Louis XVI and the aristocracy. The Bastille Day holiday in France symbolizes the overthrow of the old monarchy and the beginning of the French republic.

Each July 14th, the citizens of France celebrate to remember the price that was paid and the courage of those people who dared to change their lives.

Today and every day, people of this country and others, are making such sacrifices. They go on unheralded – they are the forgotten heroes of our time, and on this day in the spirit of Bastille Day, we should pause to remember them.

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11Jul/080

Corporate Push for Law Firm Diversity: Are We Looking In?

According to an article by the Daily Business Review, Wal-Mart, a leading corporate advocate of diversity in the legal profession, is deploying new software to keep a watchful eye on its law firms and make sure the attorneys working on its matters are diverse. Wal-Mart says it will drop law firms that don't meet diversity benchmarks.
The topic of diversity in the nation’s law firms has been a hot one in the last few years. Companies have been leading the charge to increase diversity within the ranks of the nation’s law firms. Calls to action, pledges, programs, and now software are being pushed by companies to compel law firms to increase diversity within their ranks…or else.

Yet how well are companies themselves doing when it comes to women and minorities in their legal departments? Surprisingly, not that well.

In terms of women, there were 40,018 law graduates in the class of 2004, nearly half of these graduates were women, and 43% of them were associates at law firms. However, only 31.5% of women made up the nation’s corporate legal departments.

It doesn’t get any better as women rise through the ranks. In 2007, 17.2% of the nation’s large law firm partners were women, compared to 16.6% of Fortune 500 general counsels.

In terms of minorities, progress has also been mixed. According to a 2008 Minority Corporate Counsel Association survey, the number of African Americans in Fortune 500 GC jobs continues to grow slowly, with 22 now holding such posts -- one fewer than last year.

The total of all minority GCs is up from 32 last year, and the number of Asian-American GCs has doubled, from 6 to 12. Unfortunately, a huge disparity in gender continues among Fortune 500 general counsel of color

Since 2004, over 110 general counsels have signed a Call to Action (CTA) pledge to hire law firms that demonstrate a commitment to diversity and to terminate firms that fail to show a meaningful interest in becoming diverse.

Some companies have implemented what they preach. A good example is Wal-Mart. When Tom Mars, Wal-Mart's chief attorney, joined the company in 2002, the legal department was comprised of 56 attorneys -- 20 of them women and 6 minorities.

Today, Wal-Mart employs 154 attorneys including 37 percent minorities and 43 percent women. Wal-Mart is in a good position to make demands of law firms and lead the charge when it comes to diversity.

But what about the other 100+ companies who have joined in this fight? How successful have they been in growing their corporate legal departments with minorities and women?

When things aren't going right, we tend to look outward. Perhaps, companies should be just as focused on increasing diversity within their own legal departments as they are law firms'.

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