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Yes it is done for legal reasons, by especially larger companies.
They do it, because of discrimination claims and potential lawsuits. The less diversity they have among their employers, and the more population in the minority population in their area, the more apt they are to follow this path. It is to give the appearance of being fair and balanced, and give minorities, etc., equal consideration. They can show they are attempting to give everyone an equal chance at the job, and it is not their fault that only qualified applicants come from inside the company.