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How to land government contracts as a minority- or women-owned firm (podcast with transcript)

By Stephanie Francis Ward

May 30, 2017, 8:00 am CDT

Government entities at all levels often set aside a portion of work for minority and women-owned businesses, including law firms. But many people are unsure about how to land these contracts or receive certification.

In this episode of Asked and Answered, the ABA Journal’s Stephanie Francis Ward gets tips for program participation from Emery Harlan. Harlan is a Milwaukee employment attorney and a co-founder of the National Association of Minority & Women Owned Law Firms.

Podcast Transcript

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Stephanie Francis Ward: Government entities at all levels often set aside a portion of work for minority and women-owned businesses, including law firms. But many people are unsure about how to land those contracts. I’m Stephanie Francis Ward and on today’s episode of the ABA Journal’s Asked and Answered I’m getting tips for program participation from Emery Harlan. He’s a Milwaukee employment attorney and a cofounder of the National Association of Minority Owned Law Firms. Welcome to the show, Emery.

Emery Harlan: Thank you.

Stephanie Francis Ward: My first question for you is if you have a minority or women-owned law firm and you want—the first step would be getting certified, right?

Emery Harlan: That is correct.

Stephanie Francis Ward: OK, is it worth it to hire someone to help you do that? Or can you really navigate a process on your own?

Emery Harlan: I think a lot of governmental entities have made efforts to make the process pretty easy to handle so I don’t think it’s necessary to hire a business to help you get certified. I think it’s just a function of making sure you go to the governmental entity’s website and you understand what information they need from the law firm in order to go through the certification process. So it’s—I think in the early days it was a little bit more challenging for law firms to get through the process, but I think in the era that we’re in now it’s pretty easy to navigate.

Stephanie Francis Ward: OK, and what types of certifications are available for the women and minority-owned businesses?

Emery Harlan: So I think probably the majority of governmental entities certify businesses as being either minority-owned or women-owned. So that means 51 percent of the equity of the law firm has to be held by members of racial/ethnic minority groups or by a woman. Some governmental entities, for instance here in Milwaukee, the certification for the city of Milwaukee is not based on minority status or being a woman, it’s a small business certification. So there’s information that’s solicited regarding economic status, revenues of the business, personal net worth. And so a law firm owner would need to provide that sort of information.

Stephanie Francis Ward: Oh, that’s interesting. I also have the impression that the private sector has set-aside programs also sometimes. Is that correct?

Emery Harlan: Yeah, so there have been a—you know, I would say over the last 20, 25 years, the private sector taking a cue from the public sector, have developed what’s known as supplier diversity programs designed to make sure that their supply chain includes businesses that are owned by women and minorities. And so those programs have developed at major corporations or even medium to smaller corporations that care about making sure they have a diverse network of suppliers.

Stephanie Francis Ward: And I would imagine there’s probably—there’s probably more people who are on the program lists in terms of law firms than there is work available, right? Both in the government and private sector.

Emery Harlan: I think that’s right. And then once you are included on the list, you know, whether you receive work is just a function of diligence on the law firm’s part and building relationships both in the public and private sector.

Stephanie Francis Ward: Well, what are some ways once you’re on the list to stand out from the others? I mean, other than doing a good job.

Emery Harlan: So I think it’s about building an understanding at the public and private sector entities in terms of what the particular law firm’s core competencies are. You know, we certainly spend a lot of time talking with the various entities in terms of what our capacity is, what are we really good at, we’re not shy. And I think businesses that are successful in getting work, they’re not shy about making sure that the public sector or private sector entity is made aware of recent successes, deals that are closed, litigations that have been successfully completed.

So it’s a matter of, on a regular basis, without being too forceful or inundating the prospective client with too much information, but making sure on a regular basis you’re communicating what you’re good at and things that you’ve done that they might be interested in.

Stephanie Francis Ward: OK, also I wanted to know if someone has experience working in government and he or she goes out to private practice, can that be helpful with getting business from the programs?

Emery Harlan: Absolutely, and you see that quite often that there’ll be someone who was in the legal department at a governmental entity that decides that they want to either join an existing firm or start their own firm and because they understand, you know, how the government process works, you often will see those individuals in the private sector having some success doing work for the governmental entities. So I can think of a law firm here where there’s a woman who was a former long-time lawyer in the city attorney’s office who has gone into private practice and had a great deal of success doing work for the city because of her relationships and knowledge of how the city operates.

Stephanie Francis Ward: When you’re trying to get business from these programs, are there some ethical concerns you need to be cautious about? Like for instance, maybe there’s rules to what sort of business a government entity can give someone who used to work for them or things like that. I would imagine probably—I’m sure it all depends certainly on where one is, what entity it is, but I would imagine there would be some issues that you’re going to come across that just don’t feel quite right.

Emery Harlan: Yeah, so maybe two broad areas of concern for the lawyer who used to work internally at a city attorney’s or corporation counsel’s office, you have to be mindful of conflicts of interest, obviously things that you would have handled when you were at the city attorney’s office. There may be some prohibitions against doing that same work once you’re in the private sector. Often there’s a waiting period, you know, and it varies governmental entity to governmental entity, but sometimes it can be as long as a year that you have to wait before you can get reengaged in the private sector. So that’s, you know, one set of issues that one has to parse through.

The other issue is just making sure that there’s a arm’s length relationship between a law firm and a governmental entity, so to the extent there’s any sort of benefit conferred on the public sector official you have to be very cognizant of it. In some instances there’s a strict prohibition that you can’t provide anything of value to the governmental official. In other instances it is allowed, for instance, to take someone to lunch or pay for their attendance at a conference, but there’s a disclosure of those payments so that there is, you know, sunshine so that people can know that those financial relationships exist.

Stephanie Francis Ward: And you’ve been involved in—or you’ve been working with getting business partially through these programs for a long time. I’d imagine you’ve probably come across a situation that made you somewhat uncomfortable, right?

Emery Harlan: Yeah, I mean…

Stephanie Francis Ward: How did you handle it? If you can tell me generally.

Emery Harlan: No, I don’t really think I’ve been, you know, placed in a situation where a public official has asked us to do anything that we thought was unethical or untoward. You know, we really steered away from those situations and I really haven’t directly seen that happen. I certainly am mindful and cognizant of those kinds of situations in different parts of the country happening where law firms have gotten into trouble because they have entered into relationships with government officials that, you know, have drawn them in the public scrutiny.

But we have, I’ve always, throughout my career, been very careful about avoiding those circumstances because a one-time instance of that occurring can just be absolutely devastating to the law firm that the lawyer’s associated with as well the lawyer, him or herself.

Stephanie Francis Ward: Right. And I have the impression that you moved to Wisconsin from Illinois aware of, you felt like, that they had a fair amount of these programs available, there was some good opportunities, but there weren’t that many lawyers of color there. So you felt like it would be a good opportunity for your practice, right?

Emery Harlan: Yeah, so my original decision to move to Milwaukee was informed by kind of observing what was happening in the Chicago marketplace where you had, for instance, minority firms that were able to handle litigation matters for, you know, the Chicago Transit Authority or the city of Chicago, or handle public finance transactions for the city of Chicago. That sort of thing in the ’90s when I moved to Milwaukee had not really developed.

So there were some tremendous opportunities to kind of educate some of the public officials about what was taking place in the city of Chicago and other places where they were pretty progressive about involving minority-owned firms in some of the public sector opportunities and when I arrived here in Milwaukee, again, that just isn’t something that was happening. And so through kind of the educational process we were able to convince a number of the public sector entities the value of having diverse teams handle some of the work that they send to outside law firms.

Stephanie Francis Ward: Do you think there’s any cities in the country right now that are like Milwaukee was in the ’90s? And if so, which ones?

Emery Harlan: Yeah, I mean, I think there’s still places where you don’t see minority firms, women-owned firms involved in some of the public sector opportunities. You know, here in the state of Wisconsin I think the city of Madison is one that is, you know, a growing city that has some scale that doesn’t have a track record of sending the outside assignments where they use counsel to diverse outside firms. And, you know, I don’t think there’s a conscious effort to be exclusionary, I just think it’s a function of the lack of exposure so, you know, there are definitely some places where—that that is not happening.

The city of Cincinnati is another place that, even though they have a pretty diverse population, the law department within the city has not done a very good job, in my opinion, of making sure that the assignments that they send to outside counsel are including women and minority-owned law firms in some of those engagements. So hopefully as the public policy makers are aware of the disparity in terms of who are getting those opportunities there’ll be more focus brought to bear and opportunities open for qualified, competent, minority and women-owned law firms.

Stephanie Francis Ward: Do you have advice on ways an attorney can make the entities aware and stay on their good graces to get the business from them?

Emery Harlan: Yeah, I think often it’s incumbent upon the law firms to not only make themselves known to the attorneys, the public sector attorneys who are handling those matters, to make them aware of their capabilities, but also the elected officials. You know, just candidly I think a lot of times they will drive the process.

They are in a position when the city attorney’s office or the county corporation counsel is coming, seeking their approval, those elected officials are perfectly positioned, when those matters come before them for approval, to ask questions about how the decision making process was carried out, was there a request for a proposal, how exactly the city attorney decide which particular law firm was to get the engagement, and whether there’s any involvement of certified minority or certified disadvantaged firms or certified small business firms in the engagement.

You know, in Milwaukee County we have a new corporation counsel who has made it very clear that she intends to have the outside firms look a lot different than those that she inherited, in terms of who is actually representing the county and the different units of county government, when they have to turn to outside counsel. And, you know, has actually demanded that those law firms kind of indicate what their teams look like and who have gained billing credit for the matters.

Stephanie Francis Ward: Will you tell me how has that been going over with the long-time established firms that are mostly—majority shareholders?

Emery Harlan: Yeah, so I think they have just had a understanding that if they want to obtain that work and those relationships in terms of their internal staffing, they need to be much more thoughtful and purposeful about making sure that they have diverse teams that they are presenting to the county as being available to work on county matters. So I’m sure it’s led to some very interesting discussions internally.

Hopefully it has led those firms to be more thoughtful and considerate when they look at where they are finding their new lawyers, how they are bringing in lateral attorneys into their firms because they now know, perhaps for the first time, that at least as it relates to their public sector practices, that diversity matters in having diversity from a gender and racial standpoint is something that’s going to have bottom-line consequences to those firms. And I think we’re already seeing, in some of the new engagements, that those firms are having to come to the table with teams that are reflective of the diversity of the county that they are representing.

Stephanie Francis Ward: OK, we are going to take a quick break and when we come back we’re going to discuss set-aside programs for disadvantaged business enterprises.

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Stephanie Francis Ward: And we’re back. I’m Stephanie Francis Ward and on today’s episode of the ABA Journal’s Asked and Answered I’m speaking with Emery Harlan. He is a Milwaukee attorney and we are discussing set-aside programs for minority and women-owned businesses. Emery, I wanted to ask you about the set-aside programs for disadvantaged business enterprises and I was curious if there’s many instances where law firms, or a solo perhaps, would fit that description. I would imagine, unfortunately, the way the practices have been going, that probably so. What does that involve?

Emery Harlan: So I think it involves the lawyers being able to get that certification. Here in the state of Wisconsin, the state transportation infrastructure, they receive money from the federal government, federal government has goals in place that they drive down to the different states that they provide funding. And so there are, on most of the outside counsel engagements that involve federal transportation dollars, specific disadvantaged business enterprise goals that are imposed on those projects.

And so law firms that are able to get that certification as a disadvantaged business enterprise have a terrific opportunity to make their certification known to construction companies, for instance, that are doing state projects that are funded by the department, the federal Department of Transportation. Those firms that have that certification have a opportunity to be subcontractors on those engagements and my firm is currently pursuing that certification at the state level so that we can take advantage of some of those opportunities.

I know the state of New York is another great market where there are opportunities for law firms that have that certification to get involved in the extensive contracting that the state of New York is doing with outside law firms.

Stephanie Francis Ward: What is the key check-offs for getting the disadvantaged business enterprises certification? How is it different?

Emery Harlan: I think it’s different because unlike the minority-owned designation, those certifications involve looking at the size of the law firm and if you are in a smaller law firm with lower revenues you are able to qualify for that certification because size matters for that certification.

Stephanie Francis Ward: So is there like a ballpark revenue number they’d want for firms to qualify? Or to not get above?

Emery Harlan: I think it varies. I think jurisdiction by jurisdiction it varies. I think, you know, having revenues under $7 million will qualify a firm in certain jurisdictions to be able to obtain that certification. And then there’s also an analysis of the owner’s net worth after you exclude residence and principal home ownership that they will look at.

Stephanie Francis Ward: OK, and I was curious as well for all of these certification programs, are there maybe some government entities that have them but lawyers don’t think about as much? So maybe there’s a little bit less competition in entities that maybe don’t jump out immediately as needing this, but they do have them.

Emery Harlan: Yeah, and so again, I would encourage law firms that are in different states to look at their Department of Transportation. Those are particular departments where they have not traditionally engaged disadvantaged business enterprises in the legal space and there’s a terrific opportunity to get involved either directly working for a state Department of Transportation or being a subcontractor to a contractor who has a contract with the state Department of Transportation.

So for instance, in the state of Wisconsin there is a significant amount of work done, you know, with road builders who have contracts with the state Department of Transportation and a firm that has a DBE, disadvantaged business enterprise, certification can work on those contracts whether it be managing environmental issues or condemnation, which a lot of departments of transportation have to deal with when they are trying to do road paving projects or construction projects. Often they will have to acquire private property and firms that are DBE certified can work on some of those legal projects either directly for the state or through the state’s contractors.

Stephanie Francis Ward: What’s your advice for the minority-owned firms and the women-owned firms and the DBEs, how can they market themselves to general contractors to be included as a subcontractor?

Emery Harlan: I think getting involved in some of the trade associations. There are just a myriad of trade associations that are focused on the construction and building industry so, you know, I think the association is called ABC, that’s one of the leading trade associations for the construction industry. So I think that’s one of the entities. There are paving trade associations that law firms can get involved in and do presentations at their annual meeting so that the member firms will know that there are law firms that are available that can be partners when RFPs are issued that call for a certain level of minority participation or disadvantaged business enterprise participation.

Stephanie Francis Ward: OK, I was also curious if there is opportunities for law firms in all of the set-aside programs that perhaps aren’t litigation or contract focused. Like maybe there’s a set-aside program that a firm could participate in for human resources compliance.

Emery Harlan: Yeah, and then, you know, often one of the areas certainly doing labor contracts, dealing with labor unions, that’s an area where there’s an opportunity for firms participate. And then some nontraditional areas like helping a contractor who has a state contract to figure out their participation program. You know, they will often—because there are these goals that are set forth in the contracts they have to report that information to the state. And so there’s an opportunity for a law firm to really develop some expertise around how to put together a compliant program that will help that company meet its minority or women-owned or disadvantaged business enterprise contracting goals.

Around the country state Attorney Generals and even federal prosecutors have been very interested in pursuing litigation in criminal charges against companies that either knowingly, or perhaps unwittingly, find themselves contracting with firms that are not legitimate minority-owned firms or disadvantaged firms and are actual pass-through entities. And so you have seen those prosecutions around the country and therefore it’s incumbent upon companies that make representations to state governments or federal governments, that they have a program that demonstrates a good faith effort to engage with really reputable minority and women-owned companies.

Stephanie Francis Ward: Well, on that note, what’s your advice about the daily operations control question for the programs if they also have majority men who are running the businesses?

Emery Harlan: Yeah, I mean, I think it’s—I guess my advice would really be to the policy makers, to the city council folks, people who serve as state senators, state assembly people, to make sure that they are scrutinizing how the money is being spent. I think just anecdotally because of some of the bad actors that are out there, one should assume that some of this contracting involves fraud. And I think it’s incumbent upon the elected officials to ask the government officials who are overseeing these programs to make sure that there’s a level of rigor and scrutiny so that they can have some comfort that the dollars are being spent with the intended recipients.

All too often, you know, that just becomes a paper game where people claim to be minority-owned or women-owned or disadvantaged business-owned and when you really get behind those businesses you find that in fact they are not. And I know in the state of Wisconsin there should be a lot more scrutiny over the certification that these businesses hold to make sure that the money is going to where it’s intended.

Stephanie Francis Ward: OK, and that’s everything I wanted to ask you today. Did you want to add anything else?

Emery Harlan: I would only add that again, I think there are terrific opportunities in government as well as the private sector for minority-owned, women-owned law firms. I think it’s incumbent upon the elected officials in particular to ask questions not only of the legal departments within their respective governmental units, but also to make sure that the companies that they spend money with through these public contracts, you know, are using women and minority-owned firms both in the performance of the government contracts, but also in the non-government contracts.

There’s nothing improper or inappropriate about a city council person asking the company that is getting a million dollar city contract what their commitment to diversity and inclusion is, both from a workforce and a supplier standpoint. And to the extent there is that level of attention and focus brought to bear I think that will help to enhance the level of opportunities that are made available to diverse law firms.

Stephanie Francis Ward: All right. Well, thank you so much for joining us today, Emery. It was wonderful having you.

Emery Harlan: Terrific. Thank you very much for the opportunity. Appreciate you having me on this podcast.

Stephanie Francis Ward: Of course. And listeners, thank you for tuning in. I’m Stephanie Francis Ward and you’ve been listening to the ABA Journal’s Asked and Answered.

End of transcript.

Updated on June 1 to add the transcript.