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Law firms with only white men in their top ranks are finding that Wal-Mart Stores, Inc., is a tough customer. The nation’s biggest retailer has asked each of its top 100 outside law firms to submit a list of three to five candidates who could serve as the firm’s relationship partner. The catch: Firms must suggest at least one woman and one minority. Wal-Mart GC Thomas Mars announced the relationship partner reevaluation at a June legal diversity conference in Atlanta. Earlier, the company had also sent a letter to its outside counsel about the move. Associate GC Samuel Reeves says that the goal is to “increase the number of women and minorities directly responsible for the Wal-Mart relationship at our law firms.” Mars told the Atlanta conference that he realized he had to do something when he saw that 82 of the relationship partners at the company’s top 100 firms are white men. Those firms get $142 million of the $200 million that Wal-Mart spends each year on outside counsel. Individual firm fees range from $350,000 to $13 million. After outside counsel submit their candidates for relationship partner, Wal-Mart will be “making more decisions to retain and terminate firms,” Mars said. “We are terminating a firm right now strictly because of their inability to grasp our diversity expectations,” he added. Mars acknowledged that corporate legal departments also have a way to go on diversity. Wal-Mart began to focus on the composition of its in-house lawyers about two years ago. “We had 50 lawyers and no particular diversity in the group,” Mars said. Last year, 15 of the 39 lawyers that it hired were minorities. The GCs at Visa International Service Association, Del Monte Foods Company, Pitney Bowes Inc., and Cox Communications, Inc., also spoke at the Atlanta conference. They all stressed that it’s not enough for a firm to raise the number of women and minority lawyers in its associate ranks if the partnership remains overwhelmingly white and male. Guy Rounsaville, Jr., general counsel at Visa, agreed with Mars that women and minority lawyers should have the opportunity to be a firm’s relationship partner. “I get intrusive about who in the firm is getting credit for the relationship,” Rounsaville said, adding that Visa asks its outside counsel for a monthly diversity report. Del Monte general counsel James Potter said 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. An inadequate answer to the question “dramatically lowers a firm’s chances of reaching the interview stage,” Potter told the conference. Michele Coleman Mayes, the GC at Pitney Bowes, said she focuses her scrutiny on the firms that get the most work from the company. Mayes added that she doesn’t just look at a firm’s diversity numbers, but also talks to its lawyers to gauge how hospitable its culture is to women and minorities. One GC at the conference took a slightly softer line on law firm diversity. James Hatcher, senior vice president for legal and regulatory affairs at Cox Communications, said he doesn’t 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 doesn’t 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.” Hatcher argued that 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.

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