An interesting tidbit in the Talking Points Memo article on the decision by King & Spalding to drop out of the DOMA defense case. From Brian Beutler comes this bit of reporting on the role megacorp Coca-Cola may have played: As public relations debacles go, this was a doozy. But the firm must have calculated that the alternative would have been worse. In the intervening week, a series of public and behind-the-scenes developments made it clear that the firm would suffer recriminations for defending what many of its top clients and future recruits -- not to mention gay rights advocates -- consider to be an anti-gay law.Sources with knowledge of the backlash confirm that one of King & Spalding's top clients, Coca Cola, also based in Atlanta, directly intervened to press the firm to extricate itself from the case.
A Coca Cola spokesman declined to comment on or off the record for this story, but pointed TPM to the company's long public history of support for equality and diversity.
OK, so I did as the Coke flak said and I dug around into the history and I found something very interesting that might give a little more credence to this rumor. Coke expressing displeasure may well have put a chilling effect on K&S's enthusiasm for the DOMA case and the effect it might have on the objectively-measured diversity rating of the firm and their fiscal bottom line.
Back in September 2009, Law.com (the website of The American Lawyer magazine) ran an article titled, "Coke Awards Longtime Firm, K&S, for Diversity." It reports on the occasion of the annual awards dinner presenting Coke's "Living the Values" award to King & Spalding. It describes the process of qualifying for the award and it appears rather extensive:
The questionnaire covered the firms' values and practices in five areas related to diversity: commitment of senior management to established systems for accountability and progress measurement; representation of minorities and women in the firm and in leadership; success in hiring, developing, promoting and retaining minority and female associates; creative partnering arrangements with minority- and women-owned firms; and rigor in firm-wide diversity programming, ownership and participation. Coke's legal department then evaluated the questionnaires against “best-in-class” practices in each area and scored them on a scale of 1 to 5. The firm with the highest aggregate score was chosen for the award.
Coca-Cola's general counsel and senior vice president Geoffrey J. Kelly shares a quote that indicates they are rather actively involved in pressing for change among their vendors, “We believe we will change fundamentally the behavior of law firms, and that's very important to us.”
Kelly also indicates the benefits of finding yourself in Coca-Cola's good graces relative to the issue of diversity can be very good for the fiscal bottom line:
Asked if Shook, Hardy & Bacon, the Kansas City-based firm that received the award last year, earned a bigger share of Coke's business as a result, Kelly laughed and replied, “Oh, yes. They are doing splendidly.”
Presumably finding yourself in disfavor may not be so "splendid" for the firms they employ.
Relative to this story, the 2009 article notes K&S "ranks relatively low in the number of minority attorneys." However K&S received some bonus points for including:
not just racial minorities but the disabled community and gays and lesbians, as well as mentoring, minority partnering programs and even support systems for new parents.
In other words, the very same LGBT diversity K&S crows proudly about on their website may well have helped compensate in 2009 for their unremarkable racial diversity and deliver this 2009 honor from Coke. The very same diversity demographic that was under serious jeopardy for them to maintain had the firm stayed the course on the DOMA case.
John Davidson of the LGBT organization Lambda Legal was quoted in Huffington Post saying their group would be reconsidering their future partnership with the firm, and that "I think it's going to hurt them in their recruiting of future lawyers."
It's also likely their continued defense would threaten their retention of their current LGBT employees. Also in serious jeopardy were "creative partnerships" credits they might have gotten in the past such as working with Lavender Law Conference, Lambda Legal, ACLU's LGBT and AIDS Project, AIDS Walk Atlanta, Georgia Equality’s Annual “Evening for Equality” Awards, Lambda Legal’s annual civil rights celebration in Atlanta, Stonewall Bar Association of Georgia’s annual awards dinner, “Out on Film” Festival in Atlanta.
It is likely those orgs would have received pressure from the LGBT community to shun the firm in the future and it's also likely they would have complied.
And unless they've significantly stepped up their racial diversity, a collapse of their LGBT diversity represented a real Achilles Heel to K&S's objectively measured claim to being an authentically "diverse" firm.
Just off the top of my head I feel confident that a company the size of Coke represents a whole lot more billing hours than the $500,000 Clement was bringing in for DOMA. If long-time client Coke truly expressed their displeasure at this move, that represented a serious threat to the firm's fiscal bottom line.
Even short of a full-on pullout, there are a lot of discretionary jobs that a corporation like Coke have the opportunity to award during the course of any given year. K&S was on retainer by Coke in 2007, but still there was a minor uproar in the legal community when Coke chose not K&S but another firm to handle the paperwork on $4.1 billion acquisition the company made.
K&S is doubtlessly not anxious not to see a repeat of what was surely a painful, costly and embarrassing episode for the firm. Doubtlessly the billing hours sent to Coke on a deal like that could easily dwarf the $500,000 Boehner is delivering for DOMA.
And how about that? Sometimes big corporations can be your friend. It's perfectly understandable Coke may not be anxious to go on the record to confirm their "direct intervention" in this conflict. But if Brian Beutler's reporting is sound, I am grateful, and am glad to say I've been a lifelong Coke drinker. I'll be sure to pop a cold one today and have a smile.