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Good news for white male defense lawyers: Wal-Mart wants to replace them with minority and female lawyers. The retail juggernaut’s announcement that it wants the 100 firms that do most of its legal work to move more minority lawyers into leadership positions isn’t as threatening to the old-boy network as might be expected. Wal-Mart has a reputation as cheap and demanding. “We’re a difficult client,” said Samuel Reeves, an associate general counsel with the company. “We always expect the highest quality work at the best possible value.” Wal-Mart’s constant demands for lower rates and flat fees, along with its willingness to change firms, have been especially galling to lawyers. They say the company deals with the defense bar the same way it deals with ice cream bars: forcing vendors to compete for business by slashing prices. “Lawyers tend to have a love-hate relationship with [Wal-Mart] because they can develop, for a firm or attorney, a significant amount of business, often on very interesting issues,” said a defense lawyer familiar with Wal-Mart who, like most defense lawyers contacted for this story, declined to be named for fear of business repercussions. “But they can be very difficult to work with in regard to rates and litigation strategy.” “They have a reputation for second-guessing decisions made by their attorneys and switching attorneys,” he added. “If you lose a motion, they’ll switch.” That lack of loyalty has been evidenced in local class actions, including a suit in San Francisco federal court claiming that Wal-Mart discriminates against its 1.6 million female employees. In that case — as well as a wage-and-hour class action in Alameda County, Calif., encompassing 200,000 California workers — Wal-Mart has switched counsel at key times in the litigation, parting ways with several major firms. Wal-Mart has done business with many of the country’s largest firms, including Jones Day; Mayer, Brown, Rowe & Maw; Gibson, Dunn & Crutcher; and Paul, Hastings, Janofsky & Walker. “My understanding when I was a defense lawyer — when I was part of the defense bar — is that most defense lawyers didn’t want to work with them because of their flat fee and because they treat their firms like their vendors,” said Jessica Grant, a plaintiff lawyer with The Furth Firm who is getting ready to bring the wage-hour case to trial later this year. She and James Finberg, a partner with Lieff Cabraser Heimann & Bernstein who represents plaintiffs in several similar class actions, said Wal-Mart has not engaged in settlement talks in those cases, even after classes were certified. Defense lawyers said Wal-Mart’s reluctance to settle suits can be a sticking point. But they also point out that Wal-Mart is not the only large company aiming to drive down the cost of legal work, and are quick to say that the diversity program — also adopted by other large companies — should help the legal profession. Reeves said the move for greater diversity is part of the company’s strategy to get cheaper and better legal representation. “It’s not a separate issue,” he said. “The more diversity you can have with your counsel � the higher-quality work you’re going to get.” He added that the company has curbed its flat-fee policy, only seeking such arrangements for individual cases. The June 13 letter — which, Reeves said, could lead Wal-Mart to switch counsel in some cases — requested firms to give detailed accounts of their diversity policies. “Wal-Mart will end or limit relationships with law firms who fail to demonstrate a meaningful interest in the importance of diversity,” Reeves wrote. He also requested that firms submit minority candidates to be new relationship partners with Wal-Mart. Defense lawyers found this particularly pleasing. “Wal-Mart’s announcement is a step in the right direction, however you feel about them as a client.” said Tyree Jones Jr., counsel at Reed Smith in San Francisco and active in several bar association diversity initiatives.

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