FTC Warns Law Firms over DEI Hiring Practices

The US Federal Trade Commission has issued formal warnings to several major law firms regarding their diversity, equity, and inclusion hiring practices.

The U.S. Federal Trade Commission (FTC) has issued formal advisory warnings to multiple national law firms concerning potential legal risks associated with their diversity, equity, and inclusion (DEI) hiring and promotion initiatives. The FTC's action signals heightened regulatory scrutiny of how professional service firms structure programs aimed at increasing workforce diversity, focusing on whether certain practices could be interpreted as violating federal anti-discrimination laws. The warnings emphasize that while diversity goals are commendable, the methods for achieving them must comply fully with statutes like the Civil Rights Act.

The FTC's scrutiny centers on specific program structures, such as diversity fellowships, targeted recruitment pipelines, and mentorship programs that may use criteria perceived as granting preferences based on protected characteristics. The commission has not alleged violations but is urging firms to proactively review their initiatives with legal counsel to ensure they are narrowly tailored to avoid claims of unlawful discrimination. This move reflects the FTC's role in preventing unfair or deceptive trade practices, which can include employment-related representations and commitments.

"Law firms, as officers of the court and influential employers, must ensure their internal practices are beyond reproach and fully compliant with the law," stated an FTC official. A managing partner at a firm that received the warning commented, "We are reviewing our programs in light of this guidance. Our commitment to building a diverse profession remains unwavering, but we must navigate an increasingly complex legal landscape."

This development occurs amid a broader national debate and legal challenges surrounding corporate DEI programs following recent Supreme Court decisions. For the legal industry, which has publicly championed DEI efforts, the FTC's intervention creates significant compliance uncertainty. It forces firms to balance their stated diversity commitments against evolving interpretations of employment law, potentially requiring a redesign of long-standing recruitment and advancement frameworks.

The FTC has indicated it will not publicly name the firms that received warnings at this stage. Legal experts expect the commission to release broader industry guidance in the coming months, which will be critical for all professional service firms navigating the future of inclusive hiring practices.