The 2008 financial crisis rocked the world economy. Globally, businesses and governments panicked, markets dropped, access to bank money contracted, and the job market froze. As a result of the economic downturn in all industries, employment stalled – layoffs were rampant, outsourcing became common, and hiring freezes were instituted.
The legal sector was not exempt from the deleterious effects of the economic instability. In every year from 2008 to 2012, law firms laid off attorneys, associates and staff in significant numbers. Between 2008 and 2012, law firms dismissed a total of approximately 15,435 people – divided between 5,872 attorneys and 9,563 administrative staff. At the height of the recession, in 2009, approximately 136 law firms discharged 12,196 attorneys and staff. Further, in those years, those same firms decreased the number of lawyers hired as laterals, first year attorneys, and summer associates. Simply put, the economic freefall led to a large decrease in the amount of opportunities available for lateral attorneys and a decrease in the number of positions open for newly-minted lawyers or law school graduates. In fact, at the time, many lawyers were forced to take jobs in a non-legal capacity elsewhere.
With all of that bad news, however, currently, there is cause for optimism. The legal sector is growing again. In December 2012, the legal services sector added 1,000 jobs. Although a seemingly small number for just one month, overall, between December 2011 and December 2012, the legal services sector increased the total number of jobs available to 7,800 –– a .7 increase. The statistics, while small, report a positive trend. In further support of a growing legal market, anecdotally, many lawyers report confidence in the legal sector because law firms increased in number, percent and amount of year-end bonuses to associates and other law firm employees.
Even better, in 2013, the employment outlook is expected to further improve! The U.S. Bureau of Labor Statistics anticipates that through 2020, job growth in the legal sector will increase 10%. The number of legal jobs added from 2013 through 2014 is estimated at 14,720. This means that there will be a slight uptick in the number of jobs, where a J.D. is required, available for law students. Additionally, the job outlook is even brighter for experienced attorneys. Between 2010 to 2012, the job market for experienced lawyers was equally impacted, but, has rebounded more quickly. Now, because of their experience is in demand, senior level attorneys are finding their jobs are more secure and that they are better positioned to receive new offers when they enter the lateral market.
These optimistic current legal hiring trends, while not at pre- recession levels, indicate that the employment outlook for the legal industry is moving in the right direction. Because the economic downturn caused significant structural changes in the legal industry, reflected in the transformation in the relationship between clients and law firms, legal hiring, though it is improving, will not reach the pre-recession levels overnight. Nor will the improvement in available positions for experienced attorneys address the lack of entry-level positions facing the law school graduates earning diplomas during the recession. Nevertheless, these statistics and anecdotes are a positive sign that there will be a brighter future for legal employment prospects across the country.
Here, at Lexacount Search, we also have found that the legal market is improving and is quite active. We are working with many legal employers who are interested in hiring attorneys within the first quarter of this year. If you are an experienced or an entry-level attorney who is looking for a position or if you are looking for more detailed information about our recruiting and career coaching services, please contact a Lexacount Search Consultant at www.lexacount.com, [email protected], or 215-740-0104.
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Mondics, Chris. June 16, 2012. For Law-School Graduates, Job Outlook is Still Bleak. http://seattletimes.com/html/businesstechnology/2018453483_lawgrads18.html. (accessed January 31, 2013).
Palazzolo, Joe. January 4, 2013. Legal Jobs Report: December. http://blogs.wsj.com/law/2013/01/04/legal-services-december-jobs-report-2/. (accessed January 31, 2013).
Sachdev, Ameet. June 22, 2012. Loans, Lawsuits Pile Up as Law School Grads Face Worst Job Market in More than 30 Years. http://articles.chicagotribune.com/2012-06-22/business/ct-biz-0622-chicago-law-20120622_1_law-school-law-placement-job-market. (accessed January 31, 2013).
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Finally, I am particularly grateful for Evan Grossman’s hard work and research assistance. This posting would not have been possible without his exploration of this topic area.