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The nation's leading black law firms.

TO BE "BLUE CHIP AND BLACK." THAT'S how William Hastie, founding partner of the San Francisco law firm Arnelle & Hastie, sums up the mission of his 31-lawyer shop. It's an apt calling card for the nation's 12 leading black law firms. Once limited to handling wills, domestic spats and other low-profile cases, practices today have earned their spurs in more sophisticated, high-stakes law.

Having shed their image as walk-in mom and pop shops, today's largest black firms are building viable, etched-in-stone institutions. Their clients' names are on the lips of every American, as their bottom lines - from $2.5 million to $9 million - climb steadily upward. Works in progress, these firms share the goal of creating legacies - the sort that may some day rival Wall Street's hallowed "white-shoe" firms. (See sidebar, "The Firms At-A-Glance.")

"What we're doing is a far-fetched dream," says Alan Brothers of Chicago-based Carney & Brothers. "I did not want a job, I wanted to give jobs. I never wanted to be middle class, I wanted to be rich. So I put myself in a position to be run over by the train of opportunity and I rode the train instead."

In 1970, when BLACK ENTERPRISE published its first issue, this story wouldn't have been possible. There were just 3,379 black lawyers practicing in the U.S. then - and none of the firms on the following list even existed. Throughout the years, though, prominent African-American lawyers - from the late Supreme Court Justice Thurgood Marshall to A. Leon Higgenbotham, Chief Justice Emeritus, U.S. Court of Appeals for the Third Circuit - have shaped American law as we know it today.

Yet even as the drive to diversify government and private industry gained momentum during the 1970s, opportunities in the legal arena lagged. If jobs in the nation's most prominent "blue chip" law firms were elusive to blacks, then the chances of launching one's own corporate firm were virtually nil. Of those who struck out on their own, most found success in such niche practice areas as civil rights, family and personal injury law. (See, "A Champion For The Underdog" and "Jones For The Defense.")

This month, as BE celebrates its 23rd anniversary, the number of African-American lawyers has topped the 25,000 mark. The profiles of the 12 firms that accompany this story show not only how blacks have successfully tackled the practice of law, but how they've mastered the business of law by attracting an elite clientele.

The 12 firms cited in this report have managed to be on the cutting edge of their profession. For starters, many have achieved true racial integration - a feat which majority firms have failed to accomplish. Benefiting from a unique blend of talents, they've recruited seasoned attorneys displaced from the big firms, while attracting others yearning to work on the front lines for a diverse company. And, like other smaller firms, where pay scales are about 20% less than at the majors, junior attorneys get the kind of experience that's the envy of their law school peers.

Perhaps the key to their success has to do with the areas of law in which these firms practice. Though most bill themselves as "full-service," a glimpse through their resumes shows that the majority specialize in trial law - a prudent strategy, given our increasingly litigious society. In general, these black firms are wisely moving towards specialization; such areas as environmental law and bankruptcy are particularly hot among the firms featured in this issue.

The Great Client Chase

The '90s should be good to black lawyers and law firms. in addition to the 12 firms listed in this report, several smaller practices of like caliber are increasing their ranks and clout. (Two notables: Jackson & Associates in Los Angeles and Thomas, Kennedy, Sampson & Patterson in Atlanta.) As more black elected officials enter office, minority-owned law firms are getting a better shot at lucrative government work, including municipal bond underwritings. And with Clinton's tax proposals, which should spur a spate of new tax-exempt bond issues, several minority firms, such as New York's Barnes, McGhee, Neal, Poston & Segue, stand to profit handsomely.

But to survive, black firms need business from corporate America. Yet snaring work from the Fortune 500 is often tantamount to walking the legal planks: It requires public, deliberate baby steps, with no guarantees of making it to the other side.

The problems begin with lack of access. "Most people in the corporate world haven't heard of us - that's the reality," acknowledges William Hastie. These are sobering words, coming from a firm that boasts five offices on two coasts. Then there are the stereotypes ("Are-you-really qualified?") to strip away. Fielding nickel-and-dime cases from the Fortune 500 - in the hopes that more lucrative work will follow - is all part of the humbling process. Never mind that most minority firms are staffed with highly specialized lawyers who trained at top law schools and often, prestigious majority firms.

"As a minority firm, you are always watched," says partner Bill Harris of Arnelle & Hastie. That sometimes means being sized up in the courtroom - before any work is ever assigned. One young attorney, who worked for a top Wall Street firm before joining Barnes, McGhee adds: "When a majority firm has a typo [in a document], people simply call it a typo. When a minority firm has one, they say we can't spell."

Of course, other obstacles abound. "A lot of minority firms don't have a tight strategic and marketing plan," since they are busily seeking new clients or servicing existing ones, notes Alan Olson, a principal of Altman Weil Pensa Inc., a Philadelphia-based legal consulting firm. In a marketplace where clients want results delivered better, faster and cheaper than ever before, sound lawyering is not enough. Several black-owned firms - Carney & Brothers, for instance - are seeking the advice of consultants such as Olson. Their aim: to make sure that electronic and office management systems are up to par without spiking burdensome overhead costs.

Black firms do have an important weapon in this uphill battle: They offer quality services at a bargain. Charging fees that dip as low as 30% below larger firms, "gives us an edge," says Ronald Wilson, of Los Angeles-based Wilson & Becks. "Enlightened counsel pay attention to that." For example, Shell Oil Co.'s senior attorney Craig Walker says this about Chicago's Jones, Ware & Grenard: "One thing [the firm) does is to take a case and assess it early on, so as not to run up fees. That's something I'm looking for in a firm." Other in-house counsel - who are increasingly pressed to cut their use of outside law firms - concur.

Black lawyers, though, are quick to give credit where it is due. Most say that black corporate counsel did more than just pave the way for them - they poured the cement. "In almost every instance where we've broken through, there's been a black attorney who had the guts to pull us in," claims Brothers.

Power Struggles At The Bars

While a few select firms, such as Arnelle & Hastie and Detroit's Lewis, White & Clay have managed to rope in big clients on their own, others have found it maddeningly difficult to do so. Which leads to the raging debate over who is helping to swing the door open the widest.

The most commonly mentioned effort to give minority firms a boost is the American Bar Association's Minority Counsel Demonstration program. Founded in 1988, it was crafted largely by Dennis W. Archer, former chair of the ABA's Commission on Opportunities for Minorities. The goal: to help forge relationships between minority firms and attorneys and corporate clients. This match-up program wasn't the first, though. Back in 1977, The National Bar Association started siphoning corporate business to black firms through its Commercial Law Section. By 1988, the program boasted 60 corporate participants - ten times as many as the ABA started out with. "All they did was pilfer what we already had," says John Crump, executive director of the NBA, adding, "I would never give them my mailing lists."

His attitude may sound severe, even counter-productive. Yet a number of black lawyers agree that the ABA did indeed steal at least some of the NBA's fire. The ABA's program - today 140 corporations strong - has since eclipsed the NBA's efforts, despite the fact that it got off to a shaky start. Chicago's Jones, Ware & Grenard was irked that it was not originally included, even though it was the city's largest minority firm. (Today, it is a participant.) Others hurled acerbic remarks. "These corporations didn't come throwing open their $50 million legal budgets," says Brothers of Carney & Brothers in Chicago. "They came offering $2.5 million worth of work to be split among a whole bunch of us." The firm concedes, though, that it has benefited from the program. "Even though the work we got was mostly one-shot deals, it exposed us and other firms to corporations that wouldn't have given us the time of day," says Carney & Brothers partner Hubert O. Thompson.

Most firm participants are cautious about knocking the Demonstration program, which touts million was dropped in the laps of minority firms in 1992. But the fact is, some companies are still loathe to hire black firms. "Until it knocks people over the head economically, it's a slow process," concedes Suzanne Baer, a diversity consultant for the Association of the Bar of the City of New York. After all, she points out, "This is about competing for white corporate America's dollars."

Strength in Numbers

Since 1989, when savings & loans began toppling by the hundreds, the Resolution Trust Corp. (RTC) has repeated its mandate to include more minority law firms in the lucrative business of bailouts. But how serious are they? Last year alone, the RTC doled out nearly $350 million in legal fees on behalf of insolvent banks and S&Ls. The 286 minority firms who managed to get in on the action scrambled for crumbs, receiving about $19 million of the total pie, or less than 6% of the agency's business.

That's far short of the agency's goals for minority participation, which were set at 20% as of May 1992. "There's hostility directed at the RTC, and there's reason to be," says Johnnie Booker, vice president of minority and women's programs at the agency. Still, she says, "We've come a long way."

Lately, it has become fashionable for majority firms to enter into joint venture arrangements with minority firms. Their incentive? Currently, the cap for RTC contracts is $2.5 million a year - an amount that larger firms can quickly exceed. One way to get around this ceiling is to take on additional work as co-counsel with a minority firm. It is through such arrangements that Arnelle & Hastie has managed to scoop up sizeable spoils from the RTC, collecting $467,566 in fees from the agency in 1992 - more than any other black firm.

The Most Elusive Client

Most of these firms are anxious to make visible their ties to the African-American community. Their attorneys are active in the NBA; others serve as mentors to inner-city children. Many use black accountants, give generously to black politicians and display the works of black artists. But glaringly absent in most cases is a black clientele. "There are some black CEOs who believe that the water is colder in the glass poured by the white guys," says Richard T. White of Lewis, White & Clay, the Detroit law practice that counts Mel Farr Automotive Group (an $118 million car dealership that ranks fifth on the BE AUTO DEALER 100 list) as one of its clients.

Meanwhile, Carney & Brothers handles matters for Chicago's Seaway National Bank, the nation's third largest black bank. "We have strong feelings about using minority professionals," says Bill Bates, executive vice president and general counsel at Seaway, who says that "Carney & Brothers handles more than half of the bank's legal work."

Unfortunately, few other black businesses share Seaway's sense of loyalty. Informal research suggests that the nation's largest black businesses routinely shun the services of black firms. Says Homer Harris of New York's Wood, Williams, Rafalsky & Harris: "Black companies are part of the problem, not part of the solution." Indeed, if more black businesses, universities, churches and professionals chose black over white legal representation, these firms could easily double and triple in size.

No matter what the firms' differences, all hope that race will soon be eclipsed by other considerations. "Some firms might give us work because we are black," says White of Lewis, White & Clay. "But they keep giving us work because we are good. Hopefully, the latter will eventually overshadow the former."




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For the past year, BLACK ENTERPRISE has conducted an exhaustive search for the firms that appear in this story. Our nationwide probe included research and interviews with deans of prominent law schools and professional associations - including the National and American Bar Associations. These efforts yielded the names of three dozen firms in 18 cities. The final 12 were selected based on distinguished practice records.

In order to qualify for the listing, firms had to meet the following requirements: * more than ten partners and associates. * their practices must provide a broad range of

litigation and or transnational services. * each must have a client list that includes major

corporate clients. * the firms must have been in business for at least

five years.

The average number of attorneys per firm is 22, with 13 being the smallest and 36 the largest. Geographically, the firms hail from 9 cities: four from the East Coast; four in the Midwest; three on the West Coast and one from the South. 1992 revenues for the firms ranged from $2.5 million to S9 million.
COPYRIGHT 1993 Earl G. Graves Publishing Co., Inc.
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Article Details
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Author:Clarke, Caroline V.
Publication:Black Enterprise
Article Type:Cover Story
Date:Aug 1, 1993
Previous Article:A new age of black power.
Next Article:America's leading black law firms.

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