MCCA® 2005 Survey of Fortune 500 Women General Counsel

Profiles

Nancy Heinen, Apple Computer, Inc.
Senior Vice President and General Counsel

Madeleine Kleiner, Hilton Hotels Corporation
Executive Vice President and General Counsel

Lauri M. Shanahan, Gap Inc.
Executive Vice President, General Counsel and Corporate Secretary

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A total of 76 women head Fortune 500 corporate legal departments-an increase of only one since 2004. Yet, this seemingly sluggish increase belies the reality of record growth and fluidity during this period.

Of this year’s list of women general counsel, 18 are fresh on the scene—15 new appointees, and three heads of companies new to the Fortune 500 (Assurant, MCI, and Whole Foods). Two general counsel made power moves by trading one Fortune 500 company for another: Former H.J. Heinz General Counsel Laura Stein moved to California-based Clorox Company, and Joanne L. Bober advanced from the Chubb Corporation (Fortune’s #174) to J.C. Penney Company, Inc. (Fortune’s #74).

Additionally, revenues for the companies headed by women general counsel edged up from a high of $73 billion in 2004 to $79.9 billion this year,¹ with overall corporate earning power spanning the range of $3.6 billion to $79.9 billion. The majority of the women identified through MCCA’s survey (56 percent) counseled companies with revenues between $5 and $19 billion, with roughly the same amount both above and below this range (22.6 and 21.3 percent, respectively). Of additional note is the number of women leading the highest grossing 250 of the Fortune 500 companies, a number that has grown significantly since 1999, five years ago. Then, just 17 women, or 6.8 percent of the total, held the position of general counsel of the top 250 companies in the nation. This year, 30, or 12 percent, are among the top 250.

This year’s 76 Fortune 500 women general counsel served in industries as diverse as the skills sets and legal specialties they provide. Financial and food service industries showed high numbers of women legal leaders (both at roughly 10.5 percent of Fortune 500 women general counsel), while general merchandisers and specialty retailers—of, for example, consumer products and apparel—boasted the highest representation of women at about 14.5 percent of all Fortune 500 women general counsel.

Adding to the remarkable fluidity and growth behind the near static number of Fortune 500 women chief legal officers was an overall increase in pipeline diversity. Today, 66 women lead companies that are ranked in the Fortune 501–1000—an increase of 17 (which includes those women whose companies slipped from their 2004 positions in the Fortune ranks) since last year’s report.

Unlike their Fortune 500 counterparts, utilities—including energy, gas, and petroleum companies-seemed to be the industry of choice among Fortune 501–1000 women general counsel (16.7 percent of all Fortune 501–1000 women general counsel), with general merchandising (15.2 percent) and electronics/office equipment (10.6 percent) close behind. When combined with the range of industries reflected in the Fortune 500 group, it’s clear that women legal leaders have a diversity of experience and they are leaving their marks on a broad sector of businesses.

The Fortune 501–1000 group was also more diverse than the Fortune 500 women general counsel, of whom all but five are Caucasian. Indeed, the demographic composition of the Fortune 500 group has not changed since 2003, when Kellye Walker joined the ranks via BJ’s Wholesale Club; four are African American and one is Hispanic. In contrast, the Fortune 501–1000 boasts three African American, three Hispanic, and two Asian/Pacific Islander women general counsel.

It must be noted, however, that while no new minorities have joined the Fortune 500 group recently, the five who maintain their positions continue to distinguish themselves. Indeed, one minority general counsel commandeered an $11 billion dollar merger early this year. Under Andrea Zopp’s leadership, Kmart and Sears, Roebuck and Co. joined forces to create the third-largest retailer in the country, Sears Holding Corporation. The newly formed company will no doubt gain Fortune ranking next year, and in the interim, Zopp stands as general counsel of Fortune-ranked Kmart and Sears, Roebuck and Co., as well as the Sears Holding Corporation.

In sum, while the overall number of women general counsel in the Fortune 500 grew by one, there was considerable movement into and out of the group that cannot be discounted: Eighteen women general counsel joined the Fortune 500 and 17 joined the Fortune 501–1000. The range of revenues for the companies that these women lead grew at the higher end, as did women’s share of leadership of the highest grossing Fortune companies. The combined industrial experience that women general counsel possess broadened. All of these factors represent exciting opportunities for growth and expansion among women legal leaders.

MCCA® LIST OF WOMEN GENERAL COUNSEL AT FORTUNE 500 COMPANIES

Looking Ahead

Based on the results of the 2005 “Annual Survey of Fortune 500 Women General Counsel,” the challenge today seems to be identifying and adequately preparing the next wave of women chief legal officers who will join the Fortune 500 corporate legal league.

Clearly, diversity advancements among the Fortune 501–1000, specifically those relating to gender, ethnicity, and breadth of experience, bode well for the continued diversification of the nation’s top companies, as leadership at this level provides the closest read on that of the Fortune 500. MCCA® has previously reported that one of the most common routes to the general counsel office includes moving in-house after experience at a major law firm. Diversity results at the Fortune 501–1000 level, then, presumably benefit from modest improvements at law firms where, according to the National Association of Legal Placement (NALP), women constituted 47.74 percent of full-time associates and 17.06 percent of partners at major U.S. law firms.²

From the other end of the corporate spectrum, but of related note, is the small segment of women general counsel who leveraged broadened skills sets to transition into non-law related senior executive positions. Four women who fell from the 2004 Fortune 500 women general counsel list actually advanced beyond the scope of the MCCA survey: Pamela McGuire advanced strategically from general counsel of Pepsi Bottling (Fortune’s #202) to senior vice president and deputy general counsel of business practice and compliance at PepsiCo (Fortune’s #61); Ryder System’s Vicki O’Meara shifted into the executive vice president and chief operating officer position; Marianne Keler rose to executive vice president of corporate strategy, consumer lending and administration at SLM Corporation; and Martha Wyrsch transitioned to president and CEO of a Duke Energy subsidiary.

This trend, while adversely affecting the 2005 tally of women general counsel, appears to be a natural extension of the evolution of corporate attorneys from lawyers to business partners. Over the last decade or so and in the wake of Sarbanes-Oxley, the responsibilities of the chief legal operator have expanded tremendously. General counsel no longer sit on the fringes of business decisions and financial reporting, rather, now they are at the core, juggling significant risks and managing audit committee issues. They must serve alongside the senior business team with the responsibility of facilitating the attainment of business goals within the boundaries of the law.

This represents a major shift in the way one must look at practicing law, a shift from being the content expert—providing ‘pure’ legal advice—to articulating the legal context, tradeoffs, and risks for making particular business decisions. Each department, from business operations to human resources, must now fall within the scope of the general counsel’s field of knowledge, the result being that today’s legal leaders develop non-legal skills sets, in turn opening up new leadership opportunities-COO and CEO, for example. The outgrowth of women legal leaders branching out into senior executive roles is one exciting result.³

Today, there are a number of exciting growth opportunities for women legal leaders, and the future looks bright for the next generation of women lawyers. High-potential women fill every aspect of the pipeline from law school through the Fortune 1000. MCCA celebrates the ever-growing body of women leaders joining the ranks of the nation’s chief legal officers each year.

MCCA® LIST OF WOMEN GENERAL COUNSEL AT FORTUNE 501-1000 COMPANIES

California

We turn our attention now to the women general counsel of California. For years, California has been a diversity leader with some of the most progressive programming and inclusiveness results. According to annual data in the NALP Directory of Legal Employers, California—in particular, San Francisco, Los Angeles, and San Diego—consistently boasts some of the highest numbers of women and minority attorneys across all levels.⁴ It helps, says Tania Shah Narang, executive director of the California Minority Counsel Program (CMCP), that California has both a critical mass of minority and women attorneys and a large number of corporate headquarters. “Having both aids us in being able to successfully address diversity issues,” with one providing supply and the other demand.

Longstanding efforts by regional bar associations have gone a long way toward outlining the business case for diversity, and in the four years she has been with CMCP, Narang says there has been a definite shift in the attention paid to diversity issues in California. “Whereas before we were pulling teeth to get them to see why diversity was an important issue, we now have law firms, public agencies, industry groups, and corporate sponsors calling to find out how they can improve and develop their programs.”

It is no surprise, then, that in this progressive environment seven Fortune 500 women general counsel call this state home-base: Madeleine Kleiner of Hilton Hotels Corporation, Lauri M. Shanahan of Gap Inc., Carrie Dwyer of Charles Schwab, Lisa Bodensteiner of Calpine Corporation, Nancy Heinen of Apple Computer, Inc., Ann Baskins of Hewlett-Packard Company, and Laura Stein of Clorox Company. In the pages that follow, you’ll read about three women general counsel who each have a unique story of reaching the top, but who all share characteristics and tactics that can help women in the pipeline continue upward.

MCCA® 2005 FORTUNE 1–1000 General Counsel Survey Results*

The findings from the MCCA® 2005 Fortune 500 General Counsel Survey are:

• In 2005, 28 (5.6%) of the Fortune 500 general counsel are minorities, an increase from 26 or 5.2% from 2004.
• Among the 2005 group of minority general counsel:
  19 (3.8%) are African American, same as 2004;
  5 (1%) are Hispanic, an increase of 3 from 2004;
  3 (0.6%) are Asian, an increase of 2 from 2004,
  1 (0.2%) is Native American, an increase of 1 from 2004; and
  5 (1%) of the minority general counsel are women, the same as 2004.
• There are 76 (15.2%) women general counsel in the 2005 Fortune 500 and of this group, all but 5 are white women.

The findings from the MCCA 2005 Fortune 501–1000 General Counsel Survey are:

• In 2005, 19 (3.8%) of the Fortune 501–1000 general counsel are minorities, which is about the same as in 2004.
• Among the 2005 group of minority general counsel in the Fortune 501–1000:
  10 (2.0%) are African American;**
  4 (0.8%) are Hispanic;
  5 (1.0%) are Asian/Pacific Islander; and
  8 (1.6%) of the minority general counsel are women.
• There are 66 (13.2%) women general counsel in the 2005 Fortune 501–1000, of whom 3 are African American, 3 are Hispanic, and 2 are Asian/Pacific Islander.

The findings from the 2005 MCCA Fortune 1000 General Counsel Survey are:

• In 2005, 47 (4.7%) of the Fortune 1000 general counsel are minorities, an increase of 4 from 2004.
• Among the 2005 group of minority general counsel:
  29 (2.9%) are African American, a decrease of 3 from 2004;
  9 (0.9%) are Hispanic, an increase of 5 from 2004;
  8 (0.8%) are Asian/Pacific Islander, an increase of 3 from 2005;
  1 (0.1%) is Native American; and
  13 (1.3%) of the minority general counsel are women.
• There are 142 (14.2%) women general counsel in the Fortune 1000, all but 13 are white women. This is an increase of 18 from the 124 women general counsel of the 2004 survey, and an increase of 2 minority women general counsel in the same group.

* As of June 2005.
** After MCCA published its annual report on minorities who lead Fortune 1000 company law departments in the May/June 2005 issue of Diversity & the Bar®, MCCA learned of an addition to the list. Michael Futch, general counsel of Granite Construction, is an African American and his company is ranked among the Fortune 501–1000. The statistics were revised to reflect the addition of Mr. Futch.

MCCA® 2005 FORTUNE 500 WOMEN GENERAL COUNSEL BY INDUSTRY AND RACE

MCCA’s Top 10 Recommendations for In-house Women Counsel¹

1. Develop solid substantive legal ability and a reputation for being an outstanding lawyer.
2. Be honest with yourself about your strengths and shortcomings. Take stock of your personal and professional priorities, and be clear about what you want.
3. Get to know the business. “Promotion in-house is not a straight line, but rather a function of expanding [your] circle of influence within the company-both inside the law department and outside of it.”² Use this knowledge to identify how you can fill a critical need, contribute additional value, and effectively communicate legal issues to non-lawyer business teams using “their language.”
4. Be visible within your company and in your industry. In addition to not being shy about discussing your contributions, invest time getting to know your colleagues by developing your relationships with those in the law department as well as in the business units.
5. Don’t simply play it safe—take appropriate risks with a view to those that will enhance your skills set, demonstrate “out-of-the-box” approaches, and distinguish yourself as a leader.
6. Cultivate mentoring relationships with people who can help guide your career and offer you sage advice. Relationships cultivated on the business side can be a rich source of mentorship. The key is recognizing good advice and acting on it.
7. Learn the art of effective time management: prioritizing and delegating in order to refocus your time and resources on value-added work.
8. Develop solid support bases at work and at home to help you maintain a healthy work/life balance that is in keeping with your personal values.
9. Avoid letting others’ expectations shape your definition of success, and don’t hesitate to shift your goals or priorities as your own needs and expectations evolve.
10. Develop leadership skills with sensitivity to the fact that the diversity of those you lead can be a key asset to your organization. Simultaneously, you must cultivate your ability to manage across differences and build a high-performing team.

NOTES

1. These recommendations are adapted from Creating Pathways to Diversity: From Lawyer to Business Partner—Career Advancement in Corporate Law Departments, Minority Corporate Counsel Association (2003) pp. 27-37 and p. 43.
2. Id. p.17.

MCCA® 2005 FORTUNE 501-1000 WOMEN GENERAL COUNSEL BY INDUSTRY AND RACE

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MCCA® thanks Alea J. Mitchell for all of her work in preparation of the article, profiles, and related research; Elisabeth Frater, Esq. of Gravett & Frater, for authoring the biographies of the three women general counsel; Dedra Owens of DOT Communications for her survey support and compilation of data; and Urbanomics Consulting Group for its verification efforts.

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NOTES

1. Hewlett-Packard Company, led by General Counsel Ann Baskins, has seen its profits rise steadily each year, from $45.2 billion in the 2002 Fortune 500, to $73.0 billion in 2004, to $79.9 billion in 2005. Among women-led corporate legal departments, it is the highest-grossing corporation.
2. “Women and Attorneys of Color at Law Firms-2004,” National Association of Legal Professionals Bulletin, Feb. 2005, at http://www.nalp.org/content/index.php?pid=253.
3. It is worth noting, too, the small segment of leaders who are not reported due to a division of duties and titles. To best juggle the expansion of duties, some major companies maintain one general counsel, while others have both a general counsel managing day-to-day legal operations and a position above to which the general counsel reports. MCCA’s report focuses on the chief legal operators of Fortune-ranked companies. Still, we acknowledge this subgroup of legal leaders—women, for example, like Lisa Joley, general counsel of Anheuser—Busch, who reports to Mark Bober, chief legal officer, and is therefore not counted in our tally-as an additional sector of women legal leadership.
4. See The NALP’s Diversity & Demographics data at http://www.nalp.org/content/index.php?pid=143.

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From the September/October 2005 issue of  Diversity & The Bar^®