© 2014 The Texas Lawbook.
By Natalie Posgate and Mark Curriden
Staff Writers for The Texas Lawbook
(January 20) – The legal needs of the quickly expanding Hispanic business community in North Texas are going unmet by lawyers in the region, according to a new study, leaders of the Chamber of Commerce and a growing number of corporate general counsel.
The report, “Legal Watch Dallas 2014,” found that Dallas-Fort Worth business law firms are unprepared to represent Hispanic business owners because they employ very few Spanish-speaking lawyers or attorneys with strong relationships within the Hispanic community.
The result, according to the study’s authors, is that Hispanic business leaders are not receiving critical advice and legal representation in matters involving incorporating their companies, contracts with other businesses, protecting intellectual property, taxes and regulatory matters.
In addition, DFW area business lawyers are missing out on potentially tens-of-millions of dollars in revenues from paying clients that are being ignored by law firms that are stuck in shortsighted business models that discourage long-term creativity and business development, according to the report and several corporate general counsel interviewed by The Texas Lawbook.
“I don’t think [Dallas lawyers] realize just how many Hispanic business owners there are,” said Jeronimo Valdez, a business litigator and the immediate past chair of the Greater Dallas Hispanic Chamber of Commerce’s board of directors.
“And I’m not talking about the mom and pop shops, tortilla factories, or tamale houses,” Valdez said. “I’m talking about legitimate $100 million revenue companies that have company executives or owners who are Hispanic.”
Valdez and other business leaders, including the general counsel at some of the state’s largest and most influential corporations, say that the need for Hispanic and Spanish-speaking lawyers to handle business-related matters is growing exponentially.
“Companies like ours are doing an increasing amount of business with clients and vendors who are Hispanic and speak Spanish, and Spanish-speaking lawyers are needed on both sides of these matters,” said MetroPCS Deputy General Counsel Chris Luna.
“There’s a lot of low hanging fruit that Dallas area lawyers and firms are missing,” Luna said.
Luna and other corporate general counsel said that they have been adding Hispanic and Spanish-speaking lawyers to their corporate in-house legal departments because it makes good business sense.
In addition, more than a dozen North Texas-based companies have Hispanic lawyers as their chief legal officer, including Fluor Corporation General Counsel Carlos Hernandez, Dean Foods General Counsel Rachel Gonzalez and Lennox International General Counsel John Torres.
Business leaders and corporate general counsel say these changes are directly the result of the seismic demographic shift taking place at the consumer and business levels.
The University of Texas at San Antonio reports that Hispanics will represent up to 70 percent of Dallas County residents by 2050.
“With well over 100 million customers around the world, it is imperative that our business and our legal department reflect the diversity of those we serve,” said AT&T Senior Executive Vice President and General Counsel Wayne Watts.
“The demographics of the business community are clearly changing,” said Watts. “To be effective, we must be proactive in keeping pace.”
Legal search companies in Texas that recruit lawyers said they are regularly asked by corporate legal departments to find Hispanic and Spanish-speaking lawyers. Pye Legal Group, which works with corporate legal departments, conducted 10 searches in 2013 for clients that wanted to hire someone fluent in Spanish.
Of the 10 searches, one involved a corporation that had plants in Mexico that needed legal advice by a Spanish-speaking attorney. The remaining included a compliance search and the rest involved energy related companies.
Recruiters for law firms say they seldom, if ever, receive that same request.
“I have not had any firms of any size specifically ask me for lateral recruits who speak Spanish so they can pursue the business of Hispanic clients,” said Randy Block of Dallas-based Performance Legal Placement, which works with large and boutique law firms.
A prominent headhunter in Houston echoes Block’s experience, adding that in addition to never doing a search for a Hispanic lawyer or one who speaks Spanish, no clients have discussed the need to grow leadership in that area either.
The numbers clearly bare this out.
Despite the fact that Dallas County’s population is about 40 percent Hispanic, less than three percent of partners at the region’s large law firms are Hispanic. Eight of the 20 largest firms in Dallas have no Latino partners and five only have one.
“There’s clearly a disconnect between the business community and area law firms,” said Luna of MetroPCS. “Corporate legal departments are placing a lot more emphasis on diversity and inclusion than law firms. Law firms do the diversity talk but not the diversity walk.”
Legal experts and the researchers of “Legal Watch Dallas 2014” estimate that around 10 percent or less of all lawyers in Dallas are fully bilingual and have the ability to read, write and explain legal terms in Spanish, but that also includes lawyers who practice immigration, family, personal injury and criminal law – not just business law.
The authors of the report, Dallas psychologist Dr. Edward Rincón and litigation consultant Dr. Kevin Karlson, found that:
• 43 percent of Latinos said they believed they or a family member would need the services of a lawyer in the next year to help them with an important contract;
• 29 percent said they would need legal advice during the next year to incorporate their new business and other legal work related to a business start up;
• 23 percent would need legal advice related to a job discrimination issue;
• 14 percent would need legal assistance obtaining a patent or trademark; and
• 14 percent said they might need help with a business bankruptcy issue.
Nearly one-third of those interviewed for the study said they would seek legal advice from a non-lawyer friend or family member instead of going to a lawyer. Twelve percent said they would consult a website such as LegalZoom.com and 9 percent said they would visit a legal clinic.
The report noted that in 2012, Latino households in Dallas County earned an aggregate income of $11.5 billion, but that Hispanic businesses needed legal advice to protect and grow their business interests, which provides increasing billable hours for lawyers and law firms.
“This is not a strictly pro bono community,” Rincón said. “There are substantial dollars being earned by the Hispanic community.”
The study points to law firms for the shortage of Spanish-speaking lawyers and the lack of marketing efforts to promote their practices within the Hispanic community – findings that many Hispanic lawyers do not dispute.
“We do a tremendous amount of work for corporations doing business in Mexico and Latin America and our ability to speak Spanish fluently was crucial in us getting that work,” said Yvette Ostolaza, the managing partner of Sidley Austin’s Dallas office. “There are businesses here in North Texas who are going out of state to find Hispanic and Spanish-speaking lawyers to do their legal work and that is sad.”
Ostolaza and Yolanda Garcia, another Hispanic law partner at Sidley who speaks fluent Spanish, said that the Dallas legal market has not developed the pool of talent trained to serve the growing Hispanic business community.
“We simply do not have the number of Spanish-speaking business lawyers needed and those Hispanic businesses and those companies doing business with Hispanic-owned businesses are looking to lawyers in other cities to do their legal work,” said Garcia.
John Treviño, a Hispanic lawyer who serves as senior counsel for Hewlett-Packard in Plano, said that there is a considerable cause for concern for Hispanic business owners and that law firms and the bar as a whole need to do a better job of nurturing more Hispanic and Spanish-speaking young people to be interested in business law.
“We start out with a very small pool of Hispanic law student applicants and the law firms are all shooting for only the top 10 or 20 percent graduates, which immediately reduces that number even further,” Treviño said. “And then, a large number of Hispanic lawyers go to work for the government or in immigration or solo practice, which reduces the number even further.”
The State Bar of Texas reports there are only 602 Latinos out of the area’s 15,200 attorneys, which represents only 4 percent.
“We see too few Hispanic lawyers in the bar,” said Watts of AT&T. “That’s why our department has focused resources on high school and pre-law programs designed to encourage qualified minority students to consider a career in law.”
The Dallas Hispanic Bar Association and the Dallas Bar Association have similar efforts. Last year, the DHBA hosted the Youth Law Symposium, which provides Hispanic high school students the opportunity to learn about the law and the legal profession from attorneys and judges and to discover how to pursue a legal education.
Dallas Bar officials declined to comment on the problem but noted that the DBA operates an annual minority clerkship program and funds the Sarah T. Hughes Diversity Scholarship for minority students attending SMU Dedman School of Law.
Children’s Medical Center of Dallas Senior Vice President and General Counsel Regina Montoya agrees with Watts that one major solution lies in outreach to Hispanic high school and college students.
“We should be encouraging our best and brightest to go to law school,” said Montoya, pointing out that 52 percent of the children in Dallas are Hispanic.
“The model for young professionals of color to achieve success is to become lawyers,” Montoya added, who served in the White House in 1993 as an assistant to President Bill Clinton and as the director of the Office of Governmental Affairs. “The legal community has a great responsibility because that is the profession that has been the lynch pin for success in the Latino community.”
John Torres, the general counsel of Dallas-based Lennox International, said a big part of the problem among law firms’ void in the Hispanic business community derives from the faulty economics and poor business structures embraced by most business lawyers and law firms.
Torres, who has been active in Hispanic bar activities, said law firms are constrained by the immediate pressures of the billable hour because each lawyer’s success within a law firm is measured by real-time revenues instead of efforts to grow business strategically over the long term.
“Law firms are very here and now businesses – that is their business model structure and they cash out at the end of every year,” he said. “As a result, law firms are not very forward thinking. There is not a lot of long-term creative business thinking at most law firms. I am not a fan of the law firm business model.”
Torres believes that many law firms are trying to address their lack of diversity by focusing on recruiting more Hispanics directly out of law school, but he said he and other general counsel need to push law firms to do more.
“We make it very clear that we need to see more diversity at the law firms we use,” said Torres. “Firms are doing better in hiring young minority lawyers, but they have a lot of work to do in retaining and promoting minority lawyers.
“I am going to continue to hold law firms’ feet to the fire on diversity,” he said.”
All that being said, there are glimmers of hope.
Victoria Neave is Exhibit A. Neave was a commercial litigation associate at Weil, Gotshal & Manges until last March when she recognized the need for more Spanish-speaking business lawyers and left the prominent national law firm last year to start her own practice.
Now, she represents Hispanic businesses in the DFW area, ranging from small mom-and-pop shops with one or two employees to companies that employ dozens of employees. Because of her ability to speak Spanish with her clients fluently, business at the firm has taken off, she said.
“I see the need there and I do think that speaking Spanish goes a long way,” said Neave, also the chair of the Southeast Dallas Hispanic Chamber of Commerce’s board of directors. “Even if you have a staff person do it (speak Spanish), having a third party [translate] is not the same.”
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