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Womble Carlyle Sandridge & Rice is partnering with a new Atlanta boutique of eight African-American lawyers to address client concerns for more racial diversity. Lawyers at four-month-old Molden Holley Fergusson Thompson & Heard and Womble Carlyle hope the increase in diversity that the alliance offers clients will bring in more business for them both. The deal — one of the first of its kind in the country — provides Molden Holley the resources to work on large, complex matters. The firm bills itself as the first African-American firm in Atlanta made up of lawyers with big-firm experience. Four of the five partners are Alston & Bird alumni and the fifth cut his teeth at Sutherland Asbill & Brennan and Hunton & Williams. And it will give Womble Carlyle access to African-American lawyers with corporate experience at a time when major companies are looking for more minority outside counsel. Minorities constitute only 4 percent of partners and 15 percent of associates at U.S. law firms, according to the National Association for Law Placement. Sara Lee Corp.’s general counsel Roderick Palmore, turned up the heat last year when he issued a “call to action,” saying diversity would be a factor in hiring and retaining outside counsel. As of June 30, the general counsels of 81 other companies have signed on to Palmore’s challenge. Last month, Wal-Mart’s legal department pressured its outside counsel for more diversity when it asked its top 100 firms to submit more women and minorities as candidates for the relationship partner role. Wal-Mart GC Thomas Mars said he made the move when he realized the liaisons at 82 of Wal-Mart’s 100 top firms were white men. Sara Lee and Wal-Mart are both Womble Carlyle clients, said the firm’s managing partner, Keith W. Vaughan. At Womble Carlyle, 3.6 percent of partners and 9 percent of associates are minorities. Vaughan said his firm needs to increase its diversity. The challenge by Sara Lee’s GC “is well-founded, and we are completely supportive of it. Efforts like this [alliance] are consistent with that call to action,” he said. Vaughan noted the Molden Holley partnership is “not an effort to improve the firm’s diversity per se. It’s an effort to make sure we have the diverse talent that we need to solve the client’s problems.” HOW THE ALLIANCE WILL WORK Regina S. Molden, the managing partner for Molden Holley, said members of the two firms will meet monthly to develop a marketing strategy targeted towards existing and potential Womble Carlyle clients seeking more diversity. Molden said the firms will focus on general business litigation, real estate and corporate transactions and labor and employment matters. The lead attorney on a matter could be from either firm, depending on which one brings in the matter, and billings would be handled separately, said Molden and Steven S. Dunlevie, who heads Womble Carlyle’s Atlanta office. The two firms have not set a time limit on the partnership. Molden said they will do business together “as long as it works. And I foresee it working for a long time.” Molden said partnering with a big firm was part of her strategy from the beginning. “If you’re going after Fortune 500 companies, you have to have Fortune 500 capabilities,” she said. Molden said that after talking to several large firms she and her four partners chose Womble Carlyle because: “There was a comfort level we had with Womble that was not there with the other firms. Womble wants to grow their Atlanta office and we are in the same position — we want to grow our firm. So we thought, let’s grow together.” Dunlevie said “a light bulb went on” when his firm learned of Molden Holley’s desire to form an alliance, since Womble Carlyle is working to improve its diversity. He added that the alliance does not supplant his firm’s own in-house diversity efforts. “I think they’ll do quite well without us and hopefully a little better with us,” Dunlevie said. SET-UP IS A NEW IDEA Around the country, majority firms have partnered with minority firms on individual matters for years, but an exclusive partnership where two firms plot their business development efforts together is a new idea. Atlanta’s oldest African-American firm, Thomas, Kennedy, Sampson & Patterson, has co-counseled with different majority firms over the years but it’s never embarked on an exclusive alliance with a single firm, said its managing partner, Thomas Sampson. In San Francisco, Paul D. Gutierrez, a principal at six-lawyer Gutierrez-Ruiz, said majority-minority partnerships became common in the early 1990s among firms doing work for the Resolution Trust Corp. But in practice, the firms often did not collaborate and the joint ventures died out after a few years, he said. “A lot were joint ventures in name only — and the minority firms were getting the short end of the deal,” said Gutierrez. “They were subsumed by the majority law firm.” Eventually, he said, public and private entities looking for more diversity started awarding work directly to the minority-owned firms. However, a relationship formed last year between two Chicago firms — similar to that of Womble Carlyle and Molden Holley — appears to be working well. Pugh, Jones, Johnson & Quandt, a minority-owned firm with 22 lawyers, formed an alliance a year ago with Sonnenschein Nath & Rosenthal, a 700-lawyer firm which, like Womble Carlyle, does work for Sara Lee. The year-old alliance has produced new business — and created unexpected side benefits, the two firms’ leaders said. James A. Klenk, Sonnenschein’s Chicago managing partner, said the alliance has generated new real estate business from Sears, a longtime Sonnenschien client, as well as appellate work from a new client, which he identified only as a St. Louis health care company. Pugh Jones’ managing partner, Stephen H. Pugh, said his firm has become one of 21 preferred firms for Aon Corp. since making the alliance. “One of the reasons was that we had Sonnenschein, which gives us a national platform.” Klenk and Pugh, along with an associate from each firm, have joined forces on the appellate brief. On this matter, Klenk is the lead counsel, but he and Pugh said the lead counsel depends on who gets the client and what the relationship is. To alleviate any client concerns about double-billing, Pugh said, the firms set a budget and identify the lawyers working on a matter on the front end. On the appellate matter, he said, the two firms are billing a flat fee “to get the client beyond the jitters of being double-billed.” “Once you work together, barriers start to fall,” said Pugh, who added that Klenk had become a partner and a friend over the past year. In an unexpected development, Pugh and his firm’s lawyers are helping Sonnenschien with its efforts to increase diversity internally. Pugh has joined the larger firm’s diversity committee and become a mentor to several Sonnenschein lawyers of color. The alliance has meant that lawyers at the two firms “can talk about diversity issues at a very confidential and gut level,” Pugh said. “I have two young partners over there whom I have breakfast with at least once a month and we talk about these issues.” Klenk said Pugh and his firm’s lawyers have become mentors to some of Sonnenschien’s lawyers. “Steve and the folks at his firm have helped us a great deal with our diverse associates and partners. They’re very successful role models and the majority firms don’t have a lot of those.” “People are more relaxed talking to Steve than to me,” Klenk added, pointing out that Pugh is not their boss. The Molden Holley and Womble Carlyle lawyers say it’s too soon to say how their new relationship will play out but do not rule out a similar mentoring relationship. “We hope that by working with them we can learn some things about diversity and diversity initiatives,” said Dunlevie. Molden said she and her partners support Womble’s efforts to improve its diversity in-house. “They really are open to other ideas so we saw [the alliance] as an opportunity.”

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