By Nate Raymond

(Reuters) -A major U.S. law firm has changed its criteria for a fellowship aimed at promoting diversity in the legal profession, marking the second time a firm has done so in the face of a challenge to such a program by a prominent anti-affirmative action activist.

Perkins Coie, a more than 1,200-lawyer firm founded in Seattle, on Friday said it had expanded the applicant pool for its diversity fellowship program to all law students, not just members of "historically underrepresented" groups.

It did so ahead of a Monday deadline to respond in court to a lawsuit by a group founded by affirmative action foe Edward Blum. That group had filed lawsuits against Perkins Coie and another law firm, Morrison & Foerster, alleging their diversity fellowships unlawfully excluded certain people based on their race.

Morrison & Foerster recently similarly removed language specifying that its fellowship program is only open to Black, Hispanic, Native American or LGBT applicants.

That change prompted Blum's American Alliance for Equal Rights to agree on Friday to drop the lawsuit it filed against Morrison & Foerster, which in a court filing said it had no intention of returning to the prior eligibility criteria.

Both law firms' paid fellowships were designed in part to help support the recruitment of people of color, which major law firms have struggled for years to add to their partnership ranks.

Eric McCrath, Morrison & Foerster's chair, in a statement said its commitment to creating opportunities in the legal profession "is steadfast and unshakeable."

Blum had no comment about Perkins Coie's program changes. With regard to Morrison & Foester, he said his group was "satisfied that this illegal policy was changed to include everyone, regardless of race and ethnicity."

A different group founded by Blum in June won a landmark ruling at the U.S. Supreme Court, when its 6-3 conservative majority rejected policies long used by American colleges and universities to increase the number of Black, Hispanic and other minority students on American campuses in cases involving Harvard and the University of North Carolina.

In addition to the lawsuits against the law firms, Blum on Saturday won a court order blocking a venture capital firm's grant program for Black women-led businesses, and he is pursuing cases challenging race-conscious admissions policies in military academies.

In the lawsuit against Perkins Coie, Blum's American Alliance for Equal Rights took aim at a diversity fellowship the firm created in 1991 to support law students from groups "historically underrepresented in the legal profession."

Perkins Coie had said those groups included "students of color, students who identify as LGBTQ+, and students with disabilities," according to the lawsuit, which was filed in August in federal court in Dallas, Texas.

The lawsuit alleged that by limiting eligibility based on race, the fellowships violated Section 1981 of the 1866 Civil Rights Act, a Civil War-era law that bars racial bias in contracting.

Under revised criteria announced on Friday, Perkins Coie said it will now accept applications for the 2024 program from all first-year law students, regardless of race or gender identity.

The firm said it will now also ask applicants to write about their life experiences and evaluate them based on their "efforts to advance diversity, equity, and inclusion".

Those accepted can receive stipends of $15,000 and paid positions as summer associates, a position that at major law firms can lead to full-time jobs. Fellows who return a second year receive $25,000 stipends.

Second major US law firm changes diversity fellowship after lawsuit 3