Following this summer’s three consecutive months of legal sector job gains, October saw a seasonally adjusted loss of 900 jobs, according to preliminary data from the U.S. Bureau of Labor Statistics. Total legal services jobs decreased to a total of 1,129,200 sectorwide.
While the decrease followed three months of gains, the sector still shows a 4,100 jobs gain over the last 12 months. Yet it’s still more than 50,000 short of May 2007’s 10-year high of 1,180,000 jobs.
Meanwhile, the overall U.S. economy saw little change with the unemployment rate remaining at 7.3 percent.
Source: U.S. Burearu of Labor Statistics
|* In thousands; (p) = preliminary
The legal sector added jobs once again, this time up 1,100 jobs last month, according to preliminary data from the U.S. Bureau of Labor Statistics. This was the third straight month of legal job gains, despite a number of support staff-centered layoffs in U.S. law firms.
The increase brings the total number of people employed in the legal sector to 1.13 million, which is 6,600 more jobs than September 2012’s total.
“Tuesday’s BLS report also included revised hiring data for August showing that the legal industry added 3,100 positions that month, up from the 2,700 the agency initially estimated,” Sara Randazzo reports for The Am Law Daily. “Overall, the BLS reports, through the first three quarters there were more people employed in the legal sector than at any point since 2009.”
Meanwhile, the overall U.S. economy added 148,000 nonfarm jobs in September, for an essentially unchanged unemployment rate of 7.2 percent.
Legal sector jobs increased in August, with the second-highest increase in the past 12 months possibly signalling better times ahead for law firms.
According to the Bureau of Labor Statistics, the legal services sector has added 6,300 jobs over the last 12 months. That’s an average gain of about 500 jobs a month—but there was a 2,700 jump in jobs in August. Some believe this may signal an “opening up” of the sector, attributed to a turn for the better in the economy.
The August gain was the second-highest gain in the last year, with 2,800 jobs added in July. The two months of gains were not enough to offset the sector’s losses since the recession hit, and is still 50,000 jobs shy of the pre-recession May 2007 high of 1,180,000 jobs.
Overall, however, the U.S. economy added 169,000 jobs, though the unemployment rate remained the same at 7.3 percent.
Despite weakened demand in the first quarter, the number of legal-sector jobs increased over the last two months. According to the U.S. Bureau of Labor Statistics’ seasonally adjusted preliminary data, 2,100 jobs were added in April. That’s on top of an upward-revised 3,500 legal sector jobs the BLS says were added in March (preliminary data had that figure at just 2,000 jobs).
The gains offset a tough start to the year that saw a loss of 2,400 jobs in January and 500 in February. The total number of people employed in the legal industry is now 1.13 million, which is 5,100 higher than January and the highest number seen in April for four years—though it is still 50,000 lower than the legal-sector employed peak in May 2007, according to Am Law Daily.
Using BLS data for 2013, the total number of people employed in the legal sector by month is shown in the chart below.
Professor William Henderson of the Legal Whiteboard is bringing attention to the Bureau of Labor Statistics’ new numbers and projections for legal employment. Henderson is appropriately focused on what these statistics mean for law students and the legal academy. With 45,000 new lawyers entering the market each year and BLS predicting an addition of only 73,600 new positions over the next ten years, the time is ripe for the legal academy to do some soul searching.
But Henderson also highlights two interesting indicators of just how much the legal industry is changing. First, he compares the projected growth for lawyers from 2010 to 2020 with that of paralegals and legal assistants. While the BLS projects that lawyer ranks will increase by only 10% over the decade, paralegals and legal assistants are expected to increase by 18%. By way of comparison, the projected increase for the entire workforce is 14%.
Second, Henderson cites a passage from BLS’ Occupational Outlook Handbook (also the source of the above statistics):
However, growth in demand for lawyers will be constrained as businesses increasingly use large accounting firms and paralegals to do some of the same tasks that lawyers do. For example, accounting firms may provide employee-benefit counseling, process documents, or handle various other services that law firms previously handled.
Together, these points illustrate the degree to which the legal industry is shifting the face of its workforce. Legal work continues to increase in complexity, and the need for people to staff legal projects is not going away. But the financial constraints of the last few years have forced companies and law firms to consider whether every legal problem must be staffed with attorneys who, thanks to the high costs of their education, demand higher salaries. If BLS’ projections bear out, it appears that clients and firms may have found permanent low-cost substitutes for many legal jobs in the form of paralegals, legal assistants and even accountants.
Posted by Emily Fisher