Popular DEI Rule Paused Due to Federal Scrutiny, Depleted Funds (2)

Diversity Lab is pausing one of its core diversity, equity and inclusion initiatives for law firms, the Mansfield Rule, amid federal scrutiny.

The organization, which creates programs to encourage the hiring and retention of more minorities in the legal profession, is “furloughing most of our small team,” according to a Thursday email from the group’s founder Caren Ulrich Stacy, which was obtained by Bloomberg Law. Ulrich Stacy notified Mansfield Rule participants that Diversity Lab has suffered from the anti-DEI backlash from the Trump administration.

Diversity Lab will be run by one part-time employee and Ulrich Stacy.

“Our operating funds have already been substantially depleted by the need to respond to Executive Orders, DOJ law-firm lawsuits, and EEOC letters to law firms,” the email said.

This comes after a Jan. 30 letter from Federal Trade Commission chairman Andrew Ferguson to more than 40 Big Law firms warning them over their participation in Diversity Lab’s Mansfield Rule.

More than 360 law firms participate in the Mansfield initiative, the organization announced in 2024. Ulrich Stacy said in Thursday’s email the FTC’s letters “prompted hundreds of concerned emails from clients.”

The rule encourages law firms to include at least 30% of qualified underrepresented talent out of the unlimited number of people considered” for promotions and hiring. The Mansfield Rule was also targeted by the administration during the Equal Employment Opportunity Commission’s March 2025 probe into law firms’ participation in diversity programs and fellowships. Goodwin Procter told the EEOC it planned to end its participation in the Mansfield Rule last year.

Diversity Lab has been a trailblazer in the legal profession, according to David Glasgow, a lawyer who advises law firms on their diversity measures.

“This latest development is another example of the tremendous damage caused by the ferocious political, legal, and cultural attacks on diversity work,” Glasgow said. “I urge members of the legal profession to take a step back from the political theater that characterizes this moment and maintain their commitment to advancing fairness lawfully and effectively.”

In-House Impact

The Mansfield Rule’s reach extends past Big Law. Diversity Lab in 2019 launched a version for legal departments inside companies or other organizations. Uber Technologies Inc. and PayPal Holdings Inc. were among the first batch to sign on.

In-house legal departments often rely on external programs like the Mansfield Rule to justify their diversity initiatives, Dru Levasseur, an attorney who runs the Trans Legal Professionals Networking Program, said in an email. Without the rule, diverse recruitment becomes less sustainable, he said.

“Diversity Lab pausing the Mansfield Rule sends a troubling signal to in-house legal departments at precisely the wrong moment,” Levasseur said. “Without this framework, general counsels lose a critical tool for making the business case to C-suite leadership.”

Not ‘Discriminatory’

US District Judge Beryl Howell in Perkins Coie’s litigation over its punitive executive order declared last spring the rule does not run afoul of discrimination laws after the Justice Department’s lawyer, Richard Lawson, said in a April 2025 hearing that firms’ DEI work unlawfully stereotypes people.

Initiatives such as the Mansfield Rule are unconstitutional in the government’s view, Lawson said.

Applied the way it’s described by participating groups, Howell 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.”

Hogan Lovells CEO Miguel Zaldivar told a Bloomberg reporter in an interview Tuesday that given the latest interpretations of the law, it was in the best interest of the firm not to continue completing the Mansfield survey.

Zaldivar said Hogan Lovells “is a place where everybody can achieve their highest potential without being dogmatic about it, without trying to really change the approach we’ve had for years.”

Drew Hutchinson and Justin Henry contributed to this report.