Shirley is a middle-aged woman who together with Denny Crane (William Shatner) and Edwin Poole (Larry Miller), founded the show's fictional Boston law firm, Crane, Poole & Schmidt (as she puts it to young junior associates, "I'm Schmidt"). She attended Harvard for undergrad and Harvard Law School. She and Crane had a brief romantic relationship many years in the past but now her chief role aside from star litigator and top decision-maker is to rein in Denny's excessive behavior and oversee damage control in the wake of his public statements. She had an elderly father who was an Alzheimer's patient in a local hospital, and she visited him periodically to talk with him and read aloud his favorite books until he died (she euthanizing him via a morphine drip) in the season 4 episode The Mighty Rogues. She was married for four years to Ivan Tiggs (Tom Selleck). She also sat on the board of directors of a university, two museums and a hospital. It was never revealed whether it was in Boston or New York.

In an episode tastefully titled "Schmidt Happens", Shirley first entered the Boston Offices when she was called back by Paul Lewiston. Lori Colson revealed that Shirley had spent the last three years in the New York Offices, and that Lewiston called her back to clean up the Boston office in response to a drop in litigation, Edwin Poole's inability to run the firm, and Denny's behavior. As soon as Shirley returned she butted heads with Alan Shore, whom she had a confrontation with in the men's bathroom and then Denny Crane, who found he was still attracted to Shirley after she turned him just by whispering his name. She then proceeded to fire an assistant, Maddie, who had filed a Title IX complaint stating, among other things, that the men had better fixtures. Maddie tried to stand up to Shirley, saying that she couldn't fire her for bringing a Title IX, to which Shirley merely replied by telling her to add a count of wrongful termination to her lawsuit. Shirley made waves only moments later by berating Sally Heep for her dress sense. Within the next day Shirley had taken on a massive case involving a man suing the United States Government. Whereas nobody else seemed able to get the Federal Judge to see their cause of action, Shirley did so, resulting in the judge denying the United State's motion to dismiss. It is unknown what became of that law suit.

Within the next week Shirley fired Sally Heep, stating that whilst her work was good, it wasn't up to the standard expected at Crane, Poole & Schmidt. When Sally asked her how she could come in and after one week fire someone she didn't know, Shirley replied "I'm Schmidt." She then dealt with Alan Shore's sexual harassment of Nora Jacobs and proceeded to take a position as top woman at the firm, becoming an immensely feared but respected woman. Although good friends with Lori Colson, she later ushered her out of the firm when Lori brought a sexual harassment case against Denny Crane.