FTC Chairman Warns Law Firms of Diversity Program Liability (1)

The Federal Trade Commission chairman sent a letter warning law firms of “serious concerns” about their participation in an incubator’s diversity program.

The group, Diversity Lab, has certified more than 360 law firms as having met standards for creating diverse hiring pools, according to FTC Chairman Andrew Ferguson’s letter Friday to more than 40 of the firms.

“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 said in the letter. “Such agreements can distort competition for labor in legal professions, including along dimensions like hiring decisions, pay, and promotions.”

He said he’s alerting law firms of the “potential for liability under laws that the FTC directly enforces.”

This is one of the first affronts to Big Law from the Trump administration this year. These letters come a year of legal fights between the Trump administration and Big Law firms. Nine Big Law firms made deals with President Donald Trump to thwart punitive executive orders that sought to strip the firms’ lawyers of their government security clearances and accused them of “illegal DEI” practices. Following directives from Trump, the Equal Employment Opportunity Commission opened probes in March 2025 into 20 Big Law firms’ diversity program participation and hiring decisions.

Many of the firm’s targeted in the FTC’s Friday letter have previously culled their internal diversity practices.

DLA Piper scrapped its affinity groups altogether, while Skadden, Arps, Slate, Meagher & Flom discontinued affinity group events for the last half of the 2025. Reed Smith, which along with Skadden was hit with an EEOC inquiry, said it would “retire” DEI branding for its hiring and promotion initiatives. Goodwin Procter, which was also hit with an EEOC probe and an FTC letter recipient, suspended its relationships with another diversity program, Leadership Council for Legal Diversity, and no longer participates in Mansfield certification.

DLA Piper, Skadden, Paul Weiss, Perkins Coie and Sidley Austin were some of the 40-plus law firms to receive the FTC’s Friday letter. They did not immediately respond to a request for comment.

Perkins was one of four Big Law firms to sue Trump over the targeting. The orders against Perkins Coie, Jenner & Block, Susman Godfrey and WilmerHale were struck down by federal judges last year and the administration is appealing those decisions.

“These DEI practices are not only reprehensible, they’re potentially unlawful,” Joe Simonson, an FTC spokesperson, said in a statement. “The Trump-Vance FTC won’t look the other way.”

Diversity Lab did not immediately respond to a request for comment.

The letters are the latest example of the multiple-pronged approach by the administration to attack diversity, equity and inclusion practices, said David Glasgow, a lawyer who counsels firms on diversity.

“The message the administration is wanting to send loud and clear is to either kill DEI or let it die,” Glasgow said.

Glasgow said firm leaders will be forced to take another look at the risks associated with continuing or scrapping their diversity practices.

Diversity Lab on its website describes itself as “a team of talent experts, data scientists, and behavioral science scholars, including several former practicing lawyers, who architect and innovate processes, practices, and structures that create inclusive and equitable workplaces.”

This isn’t the first time Diversity Lab’s efforts have caught the ire of the Trump administration.

Ex-Justice Department lawyer Richard Lawson said in a April 2024 hearing that firms’ DEI work unlawfully stereotypes people. Using race and gender demographics as success markers for diversity progress is problematic, he said.

Initiatives such as the Mansfield Rule, which encourage law firms to include at least 30% of “qualified underrepresented talent out of the unlimited number of people considered” for promotions and hiring, are unconstitutional in the government’s view, Lawson said.

Federal judge Beryl Howell in Perkins Coie’s litigation over the executive order declared last spring that the Mansfield Rule does not fun afoul of discrimination laws.

Applied the way it’s described by participating groups, she said “the Mansfield Rule expressly does not establish any hiring quotas or other illegally discriminatory practices, requiring only that participating law firms consider attorneys from diverse backgrounds for certain positions.”