FTC Raises Antitrust Concerns About Law Firms’ Diversity Hiring Practices

The Mansfield Certification initiative, launched in 2018, is a voluntary program that encourages law firms to consider more diverse groups of candidates when filling leadership, partnership, and lateral hiring positions. Modeled on the National Football League’s Rooney Rule, the program asks firms to track and publicly report how often they consider candidates from underrepresented backgrounds, per a statement from its organizers included in earlier program materials.

FTC Chair Andrew Ferguson argued in a written statement that the agency is concerned about how firms may coordinate their diversity efforts. “Potentially anticompetitive collusion between law firms on DEI metrics can include quotas by which they agree to compose panels of job candidates based on race, sex, or other personal characteristics other than the candidate’s merit,” Ferguson wrote. “Such agreements can distort competition for labor in legal professions, including along dimensions like hiring decisions, pay, and promotions.”

According to a statement from the FTC, the warning letters are meant to alert firms that their involvement in shared diversity metrics or commitments could, in the agency’s view, cross into territory regulated by the Sherman Antitrust Act and other competition laws. The agency did not allege specific violations but said the letters were intended to put firms on notice.

The Diversity Lab has previously reported significant changes among firms that have taken part in the Mansfield Certification process. Data from the program shows that 85 percent of participating large law firms increased discussions around inclusive lateral partner hiring, while 91 percent began tracking internal talent pools for high-visibility assignments. Seventy-five percent also track internal pools for promotion decisions, according to a statement summarizing the program’s results.

The 42 firms that received warning letters include Alston & Bird, Arnold & Porter, BakerHostetler, Cooley, Covington & Burling, Davis Polk, Debevoise & Plimpton, Dentons, DLA Piper, Faegre Drinker, Fox Rothschild, Gibson Dunn, Goodwin Procter, Gordon Rees, Greenberg Traurig, Hogan Lovells, Holland & Knight, Husch Blackwell, Jackson Lewis, K&L Gates, Latham & Watkins, Lewis Brisbois, Littler, Mayer Brown, McDermott Will & Emery, McGuireWoods, Morgan Lewis, Nelson Mullins, Ogletree Deakins, Paul Weiss, Perkins Coie, Polsinelli, Reed Smith, Sheppard Mullin, Sidley Austin, Skadden, Troutman Pepper, White & Case, WilmerHale, Wilson Elser, Wilson Sonsini, and Winston & Strawn.

Some 360 law firms nationwide hold Mansfield Certification, per a statement from Diversity Lab, making the selection of 42 firms notable within the broader universe of participants. Among those contacted by the FTC are firms that have previously challenged Trump administration policies affecting large law firms, such as Perkins Coie and WilmerHale. The list also includes firms like Paul Weiss, Skadden, and Latham & Watkins, which had earlier resolved separate inquiries into their diversity, equity, and inclusion practices with the Equal Employment Opportunity Commission, according to a statement referencing those prior settlements.

The FTC has not said whether additional firms could be added to the inquiry or whether formal enforcement actions will follow. For now, the agency has indicated that the letters are intended to open a dialogue and to remind firms that even voluntary diversity initiatives can fall under antitrust scrutiny, per a statement issued alongside the notices.

Source: Above The Law