Law firms loved diversity, until it became a liability

June 15 (Reuters) – Law firms spent years vying for a stamp of approval from Diversity Lab, which pushed them to consider women and minority attorneys when making new hires and promotions.

But when diversity initiatives became politically fraught, firms backpedaled from the organization as quickly as they once rushed to sign on.

Diversity Lab’s marquee program, the “Mansfield Certification,” became a widely adopted benchmark that required firms to consider 30% underrepresented candidates for key positions. The focus started with women and minorities, expanding over the years ​to include attorneys with disabilities, LGBTQ lawyers and first-generation college graduates.

Caren Ulrich Stacy, who founded the organization in 2014, told me she’s never seen panic like she did when the U.S. Federal Trade Commission publicly sent letters to 42 law ‌firms in late January laying out “serious concerns” with their participation in the Mansfield certification.

Firms flooded her with questions and asked to have their names removed from Diversity Lab’s website. Within weeks, enough pulled their participation—and accompanying annual fees—that Stacy had to furlough her 16 employees. She said this month Diversity Lab would permanently close, after she failed to reach a resolution with the FTC and didn’t have enough resources or willingness to sue.

“We ran out of options,” Stacy told me.

The FTC took credit for the closure, with the agency’s chairman, Andrew Ferguson, saying he hoped it would “encourage law firms to compete to hire the best talent, rather than to enter into ​agreements that exclude job applicants because of the applicants’ race or sex.”

While some in the legal industry have publicly praised Diversity Lab’s work since the closure, big law firms have been all but silent.

I reached out to 60 law firms that once ​touted their Mansfield certification, asking if they had anything to say about its shutdown or the state of diversity efforts at law firms. Only two responded with a comment. Bryan Cave Leighton Paisner said ⁠Diversity Lab “played an important role in encouraging the legal industry to adopt more structured approaches to broadening representation within leadership” and provided useful frameworks and support. Nixon Peabody said firm leaders remain focused on creating opportunities for everyone in the firm to thrive.

The other 58 either ignored ​me completely or told me in as many words that they wouldn’t touch it. “We’ll politely decline this opportunity,” an O’Melveny & Myers spokesman replied. “I don’t believe we’ll have anyone available,” wrote a Baker Botts spokesman. A Covington & Burling spokesman concluded: “We will pass.” Several thanked me for asking, while saying nothing. One ​used a sad face emoji.

Law firms have reason for caution. Republican President Donald Trump’s administration has taken aim at the legal industry, issuing executive orders against law firms that among other things cited their diversity efforts and questioned their compliance with anti-discrimination laws.

Nine law firms ultimately struck deals with the administration and four others sued. Trump has also sought to eliminate diversity, equity and inclusion programs from across the federal government, higher education, government contractors and grant recipients.

After being caught in the crosshairs of the administration’s anti-DEI efforts, Stacy said she doesn’t begrudge firms their silence. She said she has an inbox full of messages supporting her and assurances from many firms ​that their commitment to diversity continues, albeit quietly.

“I understand their fears,” she said. “I get that they don’t want to put their clients at risk.”

Stacy launched Diversity Lab at a time when talk about law firm inequality largely focused on the lack of women in partner ​and leadership roles.

Borrowing from Silicon Valley tech culture, Stacy hosted a “hackathon” in 2016 at Stanford Law School to spur ideas about how to shrink the gender gap. Pat Gillette, a mediator and former Orrick, Herrington & Sutcliffe partner, remembers her team taking the stage in pink football jerseys and pitching the “Mansfield Rule”—named ‌for a pioneering female ⁠attorney—modeled after an NFL rule requiring teams to consider minority candidates when hiring top coaches. “This forced law firms to give visibility to people who weren’t necessarily in the inner circle,” she said.

Stacy took the rule and ran with it, charging law firms an annual fee to become Mansfield certified. In its first year, 35 signed on. It grew to more than 400 law firms and legal departments, and the requirements evolved over time. Firms backtracking from it, Gillette said, is “just pathetic.”

Jennifer Martinez, the chief diversity, equity and inclusion officer at California law firm Hanson Bridgett, said the firm initially didn’t think it needed external recognition for work it was already doing. Then in 2020, as protests over racial injustice swept the nation, Martinez said it became a competitive disadvantage not to sign on. Law students and lateral hires soon began commenting on the Mansfield certification.

Pressure ​also came from clients, with general counsel demanding, sometimes quite overtly, that ​law firms send more diverse slates of attorneys to do ⁠their work.

Beyond Mansfield, Diversity Lab ran many other pilot programs over the years, including one aimed at getting men and women to take family leave equally, and a popular “on ramp” program that placed attorneys who had stepped away from the profession back into law firms.

Before the FTC alerted law firms and Diversity Lab that Mansfield might violate antitrust laws if firms coordinated on DEI metrics and shared “competitively sensitive information,” the U.S. Justice Department ​and Equal Employment Opportunity Commission each raised concerns with the program. A federal judge overseeing Perkins Coie’s challenge to a Trump executive order noted that Mansfield “expressly does not establish any hiring quotas” but instead requires “only ​that participating law firms consider attorneys ⁠from diverse backgrounds for certain positions.”

Stacy said Diversity Lab always solicited legal opinions to ensure the legality of its programs and that she thought the FTC inquiry would blow over once she had a chance to explain. Instead, the agency proposed an onerous consent decree that would have prohibited Diversity Lab from doing its work, according to Stacy, who refused to sign.

Longtime legal industry diversity advocates I spoke to said the DEI crackdown under Trump is pushing law firms into three camps. Some are carrying on the work they’ve been doing, certain they’ve done nothing illegal. Others are spooked and being more cautious. ⁠And a third batch ​that never wanted to invest in diversity programs but did so out of competitive pressure have abandoned efforts.

Stacy and others say they believe years of diversity programs ​have fundamentally changed the policies and practices inside law firms in ways that can’t be easily reversed.

“The genie is out of the bottle,” said Sandra Yamate, the CEO of the Institute for Inclusion in the Legal Profession.

Women make up almost 30% of partners at law firms, according to the National Association for Law Placement, with people of color at ​nearly 13%. Both proportions have steadily risen since the 1990s.

Gillette, the mediator, worries that if women and minority attorneys stagnate in their progress of holding true positions of power at law firms, “You’ll just have the white guys at the top too scared to say anything.”

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.