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Article Excerpt
INTRODUCTION
I. FROM SHARING SPACE TO SHARING DREAMS A. A Starvation Profession B. A Typology of Black Corporate Law Firms 1. First movers: Neotraditionalists and Start-Ups 2. Act Two: The Dropouts drop in II. BUILDING A BETTER MOUSETRAP: 1965-1990 A. Translating Public Power into Private Gain B. Cracking the Corporate Code 1. Demonstrating corporate commitment 2. Marketing change in a changing market C. Our Kind of Clients D. Making an Opportunity out of Blocked Opportunity E. Dreaming the Impossible Dream III. THE OLD RULES OF THE NEW BUSINESS CYCLE: 1990-2000 A. The Perils of the Public Sector 1. Live by the sword, die by the sword 2. With friends like these 3. Just gettin' paid 4. Paying for playing 5. Affirmative reaction--and inaction B. When the Hunter Becomes the Hunted 1. The danger of democracy 2. The return of the big boys 3. Old habits die hard C. The Grass Is Always Greener--Especially When There Is Plenty of Green 1. On-the-job training 2. Loyalty versus lifestyle D. The Death of the Black Corporate Law Firm? IV. PARADISE OR PARADISE LOST? A. Lessons from a Survivor B. Debunking Myths and Saving Souls C. The New Social Engineers D. The Vanishing Black Institution V. CONCLUSION: TO REACH THE UNREACHABLE STAR
"The premise was that we could grow a national firm from the bottom up. That was the unspoken dream of all of the participants." (1)
"It was the first time I had been in any office of any size, certainly the first time in a law office of any size, where you could go from office to office to office, floor to floor, and see black people practicing in commercial practice at the highest levels. It was a wee bit short of a spiritual experience for me. At the end of the day, the hiring partner said, 'Clearly you have the talent to do the work. We only ask that you have the will to live our mission to build an institution of talented but purposeful black lawyers.'" (2)
"The number of African-American owned firms is rapidly decreasing. It is becoming very evident to those of us who are still in the practice or who continue a strong interest in the practice that there is a real sea change that we are living through now." (3)
INTRODUCTION
There was a moment around 1990 when it all seemed possible. Finally, there was a way for black lawyers with ambition, skill, and determination to escape the frustrating limitations that seemed destined to block their progress at large law firms which, although finally willing to hire them, seemed unwilling or unable to treat them as full fledged participants. That way was to build "large" corporate law firms of their own that would compete directly with established firms for clients and talent. (4)
Those who embarked on this path had big dreams. The most ambitious, as the first epigraph quoted above underscores, dreamed of creating national firms that would rival in size, scope, and profitability the "law factories" that had been built during the last century to service the needs of public and private institutional clients. (5) But even those who dreamed on a more local level still thought that they could build stable and successful institutions in the image of Cravath and other similar firms.
And why not? The conditions for creating viable black corporate firms seemed ripe. A quarter century after the enactment of the Voting Rights Act--and a decade after the threat of school busing caused many whites to flee for the suburbs--black voters had finally begun to flex their muscles in major cities across the country. The result was a growing generation of black politicians with the ability to control (or, at a minimum, to influence) how public entities awarded the substantial amount of legal business under government control. At the same time, corporate America was beginning to awaken to its own obligation to promote diversity among its suppliers, including the suppliers of legal services. Finally a new generation of black entrepreneurs, entertainers, and athletes seemed poised to fulfill the promise of black capitalism. Surely, these forces were sufficient to create a client base with both the interest in and ability to sustain a new black legal elite.
Moreover, by the last decade of the twentieth century there was a growing supply of black (and other minority) lawyers with the credentials--and often the experience--to service the legal needs of public and private institutional clients. By 1990, there were more than 25,000 black lawyers in the United States--a tenfold increase from the size of the black bar in 1960, with more than 6700 black students entering law school every year. (6) Nor was there much competition for this growing pool of talent from established corporate firms. Although most law firms were hiring a handful of black graduates by this time, the vast majority of the black lawyers who had entered these institutions during the proceeding two decades were no longer there. (7) As a result, those seeking to create black corporate law firms could draw on a substantial pool of black recruits with experience in servicing the legal needs of institutional clients and, equally important, who understood the frustrations of life inside a large law firm for black lawyers.
Finally, there was a precedent for the bold strategy these new black corporate entrepreneurs sought to implement. A generation earlier, Jewish lawyers, who in the first half of the twentieth century were even more excluded from "white shoe" corporate firms than black lawyers were in the 1990s, had built their own law firms whose size and profitability eventually rivaled their WASP counterparts. (8) Although this lineage was rarely explicitly acknowledged, the black lawyers who launched corporate law firms in the latter decades of the century had reason to hope that they could emulate this successful strategy.
And yet, notwithstanding all of this potential and precedent, by the end of the twentieth century the dream of building black corporate firms that could rival their largely white counterparts had all but died. As the last epigraph indicates, by the dawn of the twenty-first century most of the firms that had been started with such promise and enthusiasm just a few years before had either shuttered their doors or shrunk in both size and ambition. Those black lawyers who continue to dream of building something beyond boutiques--some of which have indeed proven to be quite successful--are more likely to talk about creating "networks" or "franchises" as opposed to building a national firm comprised, in the words of the second epigraph, of "talented but purposeful black lawyers." Indeed, to the extent that anyone continues to talk about building a national minority law firm, it is Hispanic lawyers who have been able to leverage their strong presence in Miami and connections to Latin America to create at least one law firm with more than 250 attorneys. (9)
What happened to the dream of building a national black law firm? Equally important, what can the fate of this dream tell us about ongoing efforts to integrate the corporate "hemisphere" of the bar and to eliminate inequality in the legal profession and in the rest of society generally? (10) Finally, what, if any, difference will it make that these firms failed to achieve their ambitious goals? As we will see, many of the lawyers who created successful black corporate firms left these institutions to become partners in traditional large law firms. Moreover, the black corporate boutiques that have survived have had to find real niches in the marketplace, as opposed to trying to create what were, at best, likely to have been midsized full-service firms of the kind that are increasingly going the way of the dinosaur in today's competitive marketplace. (11) Given this reality, should we mourn the death of the dream of building a national black law firm or should we celebrate it as a necessary and desirable step toward achieving true integration of the nation's elite corporate bar?
In this Article, I examine these questions by taking a close look at the lawyers who attempted to establish "black" or "minority" corporate law firms in the last three decades of the twentieth century. (12) I do so on the basis of over fifty in-depth interviews with lawyers who either dreamed of creating black corporate law firms or who were in a position to hand out the kind of business that would determine whether this dream could be realized. Based on these reports, I argue that five interconnected trends ultimately doomed the grand ambitions of those who sought to create "large" black corporate firms: the increasing difficulty of translating electoral power into legal business; the inherent limitations of various strategies to promote diversity and inclusion; the growing concentration and competition among traditional large law firms; the widening gap between the world views and expectations of the lawyers who founded black corporate firms and the new generation of black lawyers these founders needed to recruit to keep their organizations viable; and-paradoxically--their own success. Understanding how each of these developments undermined the dream of creating viable black corporate firms, I submit, has important implications for the likely success of a range of policies currently being advocated by those seeking to promote diversity in the legal profession.
Understanding the factors that led to both the rise and the fall of black corporate firms also highlights just what is likely to be lost as these pioneering institutions contract and perhaps die out altogether. As the second epigraph to this Article underscores, many of those who sought to build black corporate firms were interested in more than economic success. They also had a mission to create lasting black institutions that would reflect the sensibilities of the black community and help to serve its needs. In this respect, black corporate firms were very different from their Jewish predecessors which were, as Eli Wald documents, largely Jewish by default as a result of anti-Semitism in the mainstream corporate bar. (13) The corporate law firms started by black lawyers beginning in the 1960s, on the other hand, were black by design. With few exceptions, the founders of these institutions sought to create corporate firms that would have a distinctly racial character, even as they acknowledged that the barriers that had historically prevented black lawyers from joining mainstream corporate firms were beginning to recede. Like those who continue to support the nation's historically black colleges and universities (HBCUs), these founders believed that even in a world without formal barriers to integration that there was still an important place for black institutions dedicated to training young black lawyers and instilling in them a sense of pride, and to providing a range of services and support to the black community with whom these founders felt a deep spiritual connection. It remains to be seen whether a black bar that is increasingly divided between those who work in large, and still largely white, corporate law firms and those who work in traditional black law firms that service a clientele comprised almost exclusively of black individuals and small businesses will continue to provide these important services.
Moreover, like HBCUs, black corporate firms also provided the black lawyers who created and managed these organizations with an opportunity that even the most successful blacks in traditional elite firms almost never enjoy: the ability to be in charge of an institution that could pursue an approach to corporate law practice premised on the fact that blacks as a group hold decision-making authority. As Heather Gerken's important work on democratic theory reminds us, there is a crucial difference between minorities having the opportunity to participate in a decision and their having the authority to make that same decision--and make it in a context where they are no longer in the minority. (14) Due in part to the competitive pressure created by black corporate firms, a few black lawyers are now able to participate in decision making in at least some traditional large law firms. But even those who do rarely have the authority to make their own decisions about how their work will impact the interests of the black community. Just as significantly, few white lawyers will learn what it means to participate in decision making within institutions in which people like them are not ultimately in control.
Finally, whatever one thinks about the continuing desirability--or even possibility--of creating a significant black corporate law firm today, it is important to remember the voices of those who dared to dream this impossible dream. I therefore let these dreamers speak in their own voices--voices that not only remind us of the barriers black lawyers faced just a few short years ago, but also of the courage and entrepreneurial spirit with which these pioneers confronted those barriers. As we consider the barriers that continue to impede the dream of building a truly integrated bar in this new century we would do well to remember both parts of this history.
The rest of this Article proceeds in five parts. Part I briefly recounts the history of black law firms and documents the evolution of three distinct types of black "corporate" firms in the latter decades of the twentieth century: "Neotraditionalist" firms, comprised of lawyers who attempted to adapt traditional black law firms to compete for institutional clients; "Start-Up" firms, founded by the first generation of black lawyers to emerge from elite law schools in the late 1960s and early 1970s who rejected (or quickly abandoned) large law firms for the chance to establish their own competing enterprises; and "Dropout" firms, established in the late 1980s and early 1990s by black lawyers who had spent a significant amount of time in big firms (many of whom had even become partners) but who nevertheless decided to walk away from their privileged positions to start their own corporate firms. Although there were therefore significant differences among these institutions--differences, as we shall see, that had important implications for the strategies particular firms pursued and their success in pursuing them--all of these firms shared two common goals: to build "true" law firms (as opposed to the loose office-sharing arrangements typical of traditional black firms) catering to large public and private institutional clients (as opposed to the individuals and small businesses black lawyers typically served) and to do so in an environment in which black lawyers--and black culture--played a dominant (although as we shall see, by no means exclusive) role. Part II examines the forces that propelled the growth of the firms that shared these ideals in the three major markets in which black firms attempted to build their competitive edge: the "public" market for legal work from local, state, and federal programs; the "private" market for legal work from corporate clients; and the "labor" market for talented lawyers. Part III then describes how a set of overlapping changes in each of these three markets combined to undermine the most ambitious aspirations of the lawyers who started these firms. Part IV examines what this history can teach us about contemporary debates concerning how best to diversify the corporate hemisphere of the bar and investigates what might be lost in a world in which black institutions, like the firms these pioneers attempted to create, no longer exist. Part V concludes by asking whether even quixotic dreams are sometimes worth pursuing.
I. FROM SHARING SPACE TO SHARING DREAMS
To understand just how audacious the idea of creating a black "corporate" law firm must have seemed to the lawyers who dreamed of doing so in the latter decades of the twentieth century, it is important to remember the state of the black private bar in the years before the Supreme Court's decision in Brown v. Board of Education. (15) In addition to providing context, this history also played an important role in shaping the kinds of firms that black lawyers sought to create and the goals that these pioneers had for these new institutions.
A. A Starvation Profession
When the Supreme Court decided Brown in 1954, there were no black corporate law firms. Indeed, with only rare exceptions prior to the late 1960s when the country finally began to get serious about enforcing Brown's integrationist mandate there were neither black corporate lawyers nor true black law firms. Although a few black lawyers managed to secure at least some business from corporate clients in the first half of the twentieth century, (16) the overwhelming majority of black lawyers in private practice toiled as solo practitioners or in loose office-sharing arrangements with a handful of other black lawyers until well into the 1970s. (17) There were virtually no black lawyers in the kind of downtown law firms that stood atop the power, prestige, and income hierarchies of the bar. (18) Given this state of affairs, black lawyers lagged significantly behind white lawyers in both income and prestige. (19)
Notwithstanding these limitations, however, it is important to recognize the significant role that black lawyers in private practice played in the black community during this period. Although full-time civil rights lawyers like Thurgood Marshall often get all of the credit, the Legal Defense Fund's network of cooperating attorneys was an essential part of the campaign that eventually culminated in Brown v. Board of Education. (20) Just as importantly, black lawyers in private practice were often the only ones both able and willing to provide ordinary blacks with even a modicum of access to the law--and, often even more crucially, protection from it. As the historian Paul Finkleman notes, black lawyers who were not full-time civil rights lawyers "ushered in many types of social change simply by doing their jobs well." (21)
Traditional black law firms also played a crucial role in training the next generation of black attorneys. For newly minted black lawyers in the years prior to 1968 when mainstream law firms slowly began to open their doors, working for an established black attorney constituted one of the few places where these new graduates could learn their trade. Charles Robinson who would go on to found one of the most important black corporate law firms of the 1980s captured the importance of this apprenticeship function when describing one of the early black law firms in California:
Tom was sort of a legend among the older generation of black lawyers who are now in their 60s and 70s because everybody worked for him. He had 8 or 9 lawyers in the 1940s and '50s. Their identity and number kept changing but if you came of age in California during that time you couldn't get a job anywhere else. (22)
Finally, traditional black law firms did more than provide access to the legal system for black clients and train black lawyers. They also played a crucial role in providing leadership to the black communities within which they were located, and, equally importantly, training in leadership for black lawyers who had few other opportunities to develop these skills. Notwithstanding their marginal incomes and status in the profession, black lawyers in the pre-Brown period were frequently chosen to head civic, religious, and philanthropic organizations in the black community. (23) Similarly, young people growing up in the black community looked up to the few black lawyers they encountered as role models whose outward trappings of success and accomplishment they might one day seek to emulate. (24)
In each of these four ways--assisting in the black liberation struggle, providing important legal services to black individuals and businesses, training the next generation of black lawyers, and serving as leaders in the black community and as role models of professional excellence--traditional black law firms were an integral part of the structure that supported the black community in the period before Brown and the first decade thereafter. When the doors of opportunity finally began to squeak open in the beginning of the second decade after the Supreme Court's historic decision, black lawyers both young and old began to look for ways to escape the limitations of their relatively constricted existence, while at the same time preserving the important role that the traditional black bar had played in the black community.
B. A Typology of Black Corporate Law Firms
There is no definitive record of when the first black "corporate" law firm officially opened its doors. After identifying the legendary California firm where "everyone worked" in the 1940s, Charles Robinson identified another California law firm that was formed in Los Angeles in the late 1960s as having pride of place.
Moving into what I think of as the modern era, the next combination I am aware of was a firm called Sanders, Tisdale, Tooks & Williams. The "Sanders" was Stanley Sanders, who graduated from Yale around 1968 and who had been a Rhodes Scholar. (25)
1. First movers: Neotraditionalists and Start-Ups
Whether or not this firm was indeed the first of its kind, the juxtaposition of the two California firms described by Robinson underscores an important transformation that began to occur in the black bar when the first wave of black lawyers emerged from the nation's elite law schools in the late 1960s. As new opportunities began to open for black lawyers, a few traditional black law firms like the first one Robinson described where "everybody worked" began to look for ways to leverage their name recognition and deep roots in the black community to take advantage of the new opportunities for black lawyers that were beginning to emerge in post-Brown America. A few of the most farsighted and ambitious of these older black lawyers moved to transform the loose confederations that had traditionally bound the lawyers within their ambit together into more formalized arrangements similar to those found in traditional law firms. These "Neotraditionalist" firms, as I will call them, would go on to play an important role in validating the idea of creating a black corporate firm and modeling how that dream might be achieved.
At the same time, a new generation of black lawyers like Stanley Sanders began to emerge from the nation's elite law schools. Many of those in this cohort entered the country's leading law firms and attempted to conquer corporate America from the inside. But a small number like Sanders quickly turned their backs on traditional elite firms and instead set about establishing firms of their own that could one day compete with established firms for clients and talent. Although these new legal entrepreneurs were often inspired by Neotraditionalist firms, they were also clear that they wanted to distance themselves from the traditional practices that they viewed as inhibiting the growth of these older organizations--and the older lawyers who ran them. Instead, they wanted to model their new "Start-Up" firms, as I will call them, on the large law firms that these children of the Supreme Court's decision in Brown had been exposed to during law school.
Brian Jones's career underscores this transition. Jones was in the first wave of blacks to attend elite law schools, enrolling in the University of Michigan Law School in 1967. As he prepared to graduate three years later, Jones received several offers to join prestigious corporate law firms in his native Detroit. To the surprise of many of his classmates, Jones turned these lucrative and prestigious offers down. Instead, Jones accepted a job with a ten-lawyer Neotraditionalist black law firm that was attempting to break into the market for legal work from public and private institutional clients. His reasons for doing so reflected both the inevitable limitations of life in a large law firm for a bright young black man in 1970 and the appeal of creating a new black institution:
As you know, there is the glass half empty/half full thing in terms of the perspective and culture and perception of big firms. Although there are very fine people trying to bridge the cultural gap and what have you, there really is a different set of aspirations in terms of what the firm was seeking to do, which was really not focused on the aspirations I had to make an impact on community uplift--on community growth and development, institutionalization, and things like that. The barriers were coming down and there were all these great opportunities, but where do you choose to make an impact on the growth and development of people of color? There are all sorts of ways to do it, clearly. But the one that appealed to me was in the context of a black law firm. (26)
A year and a half later, however, Jones found himself chaffing under the dictatorial rule of the firm's partners, all of whom had grown up in a different era than the firm's associates. "The three named partners had all gone to Wayne State and worked for the IRS before opening the firm," Jones explained. By contrast, Jones and his fellow associates were products of the kind of elite schools that the firm's partners could not have attended in their day. "Three of us began complaining that we were all chaffing under the same sort of bridle. One fellow was from Harvard Law School and the other graduated a year or two ahead of me from Michigan. So we had a lot to contribute. But the atmosphere had to be an accepting atmosphere if our contributions were to be positive--but it wasn't." (27) So, the three decided to leave to form their own firm.
Jones's vision for his new Start-Up was very much the same as the one he had just left, only without the bureaucratic control and dictatorial hassles that he had experienced at the hands of the older partners:
Civil, corporate--no personal lines. No criminal work. That was the goal. From my experience at the old firm I could see first hand the depth and breadth of the black business and professional community and that the way that things were evolving that there would be a great opportunity for a number of black firms to succeed. (28)
As we will see, subsequent events would prove that Jones's vision was indeed farsighted. But it was an event the year after the firm was started that ended up making all of the difference for the firm's future. "Coleman Young was elected [mayor of Detroit] in November of '73," Jones explained. "That door opened to us and brought us what became the cornerstones of our practice in the first decade." (29)
Jones was not alone. Beginning in the 1960s, the rise of black political power in major cities around the country propelled the growth of both Neotraditionalist and Start-Up firms. The visible success of these new ventures, in turn, spurred another group of black lawyers to establish a third type of black corporate firm that they believed could compete effectively with Neotraditionalists and Start-Ups--and with mainstream law firms--for work form public and private institutional clients.
2. Act Two: The Dropouts drop in
By the late 1980s, efforts to promote diversity in large law firms had officially been underway for almost two decades. Yet notwithstanding some notable success stories, the overall percentage of black lawyers in these institutions remained vanishingly small. As late as 1989, blacks constituted just over two percent of the associates--and less than one percent of the partners--in the nation's 250 largest law firms. (30) Moreover, even those few black lawyers who had managed to win the "tournament of lawyers" and become partners often found that their victory was as much Pyrrhic as real. (31) As many law firms moved to a "two-tier" structure of equity and nonequity partners, black partners were much more likely to find themselves in the latter less remunerative (and more precarious) status. (32) Even in firms that had retained their unitary partnership structure, black partners were much more likely to dwell at the bottom of the firm's financial and status pecking order. With very few exceptions, black partners did not hold leadership positions such as department chairmanships or membership on important firm committees. Nor did these lawyers control the kind of "book of business" likely to vault them into the top echelons of the compensation system. As one frustrated black partner reported, "the major issue is not so much moving from associate to partner, but from 'piddling partner to significant partner.'" (33)
Given this reality, it is not surprising that many black partners expressed frustration with the slow pace of change inside traditional large law firms. What is surprising is that several decided to leave and go elsewhere. Although there are few reliable statistics on attrition rates among black partners during this period, anecdotal rates suggest that the number leaving their hard won and coveted positions was surprisingly high. For example, in 1991 eight black partners at major Chicago firms--according to one estimate, "more than 'twenty percent of the black partnership'"--left their prestigious positions. (34) Reports from other cities paint a similar picture. (35) Although those leaving large law firms went many places--including in-house legal departments and investment banks--a significant number left to start their own competing corporate law firms.
Charles Edwards is representative of this last group of entrepreneurs who left traditional large law firms to create what I will refer to as "Dropout" firms. Born on the South Side of Chicago to a father who worked "pulling hot steel out of furnaces" (36) and a mother who was a teacher's aid, Edwards by any objective measure had lived the American dream. Thanks to the "A Better Chance" program that placed inner-city black children in elite Eastern prep schools, Edwards was transported from his decrepit, underfunded, all-black junior high school to the manicured lawns and ivy covered walls of the Exeter Academy. (37) From there, it was on to Princeton, Harvard Law School, and a position as a first year associate--and the first black lawyer in the firm's one hundred-year history--at a highly respected Chicago law firm. Seven years later, Edwards was elected to full equity partnership in the firm. He thought he had died and gone to heaven--although, as he told me with a chuckle, he also assumed that the firm's founding partners were probably "turning over in their graves" at the thought of a black lawyer joining the partnership. (38)
And yet seven years later, Edwards abruptly abandoned his hard won position to start a firm with two other black lawyers designed to provide high quality corporate and litigation services to public entities and private corporations. As we talked, it was clear that his reasons for doing so were complex. On the one hand, it was evident that his old firm was changing rapidly. Like many of its peers, the firm had grown substantially--quintupling from the day he started until the time he left. More importantly, the ethos of the firm had changed radically. "It had been more of a lock step place but it was becoming less so," Edwards explained. "Traditionally, the firm paid people who did the work as well as the people who brought in the work. It was becoming much more important to be someone who brought in the work." (39)
But in the end, it was the allure of building a new kind of law firm--one where he could do the same kind of work that he had been doing at his old firm but that would reflect his own ethos and culture--that ultimately proved decisive. "It was the first time that a group of black lawyers from major corporate firms--two of whom had been partners--started up their own shop," (40) he told me with evident pride. As such, the firm had a value proposition that Edwards believed corporate clients would find attractive: "If you don't have the large overhead that big firms have," Edwards explained, "you can charge lower rates using the same lawyers that they have used before. Clients like that." (41) Moreover, that value proposition had a distinctly racial spin. As Edwards recalled: "Clients were saying: 'I want more bang for my buck. If I'm going to use a minority lawyer, I want a minority firm. I don't want to go to one of these big firms and just use a minority lawyer along with a bunch...
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