In a recent and controversial move, the Federal Trade Commission (FTC) issued warning letters to 42 prominent law firms participating in Diversity Lab’s Mansfield Certification program. The program, which aims to boost diversity in law firm leadership by ensuring that women, people of color, and LGBTQ+ lawyers are considered for top roles, has been scrutinized under antitrust laws. However, legal experts and a U.S. District Judge have expressed doubts about the FTC's stance, suggesting that this move may be more about intimidation than legal necessity.

Rebecca Haw Allensworth, a Vanderbilt Law School antitrust professor, described the FTC’s action as a “bullying move” which, while unlikely to hold up as anticompetitive legally, could still have a significant chilling effect on these law firms. The implication is that the FTC is leveraging its power to coerce compliance or deter firms from engaging in diversity initiatives, under the guise of antitrust concerns.

U.S. District Judge Beryl Howell pointed out that the Mansfield Rule "does not establish any hiring quotas or other illegally discriminatory practices," but merely requires that firms consider a diverse pool of candidates. This clarification from the judiciary highlights the tension between governmental oversight and the promotion of diversity within the legal sector.

The FTC's warnings could impose substantial costs on these firms, not just financially due to potential legal fees, should the issue escalate to litigation, but also in terms of public relations. Being sued by the FTC can tarnish a firm’s reputation, particularly when that firm’s business involves representing clients before the commission. This could deter firms from participating in or supporting programs like the Mansfield Rule, out of fear of attracting unwelcome government scrutiny.

This incident raises broader questions about the balance of power between government agencies and the private sector, especially in areas like diversity and inclusion, which have become increasingly pertinent in today’s social climate. It also challenges the legal community to consider how best to advocate for and implement diversity without falling foul of antitrust laws, real or perceived.

As the situation unfolds, the legal community will be watching closely to see whether these firms will bow to the pressure or stand by their commitment to diversity, potentially setting a precedent for how similar initiatives are treated in the future by regulatory bodies. The FTC’s next steps, as well as the response from Biglaw firms, could have lasting impacts on the intersection of law, business, and diversity.