Stagnant Legal Hiring Trend May Have Pre-Dated the Recession

Lasting changes predicted for the Legal Industry

A dramatic transformation is occurring in the legal profession, according to an ABA Journal report. You probably realized that, but what may not have been as obvious is the origination of this large structural shift in the industry.  The decline appears to have started several years before the financial crisis of 2007 forever changed hiring and led to massive associate layoffs and other dramatic cost cutting measures.   Although many in the legal profession still believe the industry will rebound, the Journal report predicts that the legal profession is being forced to make permanent changes.  The demand for cheaper legal services in a global market is the game changer.  The recession, the Journal notes, served as the catalyst for the legal industry's need to re-invent the way services are provided.

The  ABA Journal report went on to predict that The future of law rests on technological innovation and finding better ways to reduce time and costs. 

Whether BigLaw lawyers, boutique specialists or solo practitioners, U.S. lawyers can expect slower rates of market growth that will only intensify competitive pressures and produce a shakeout of weaker competitors and slimmer profit margins industrywide. Law students will find ever-more-limited opportunity for the big-salary score, but more jobs in legal services outside the big firms. Associates' paths upward will fade as firms strain to keep profits per partner up by keeping traditional leverage down.

But it's not the legal services industry itself that is slowing down. The report shows that for the past 25 years the percentage of the nation's GDP made up by legal services has not declined but instead has shown a slight increase of 2 percent.  At the same time, traditional law firm employment has taken a hit.  Following decades of growth, employment in firms leveled off then started dropping in 2004 and lost 20,000 jobs before the 2008 Wall Street meltdown. Other legal service categories such as legal process outsourcers and contract attorney agencies experienced slight growth during that same period, the report notes.  Other industries have been hit harder in recent years, particularly manufacturing. On the professional side, the report indicates professions including journalism, advertising and travel are enduring massive changes impacting employment and salaries.

Source:

ABA Journal

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