ANALYSIS: Fall in jobs for lawyers and jurists, against the current of economic trends
Despite the reopening of widely available Covid-19 vaccines and the reopening of economies nationwide, lawyer employment fell in the second quarter and is still well below pre-pandemic levels, according to Bureau of Labor Statistics (BLS). And while paralegals, paralegals and title examiners saw employment growth this quarter, legal support jobs plunged, indicating that overall employment in the legal professions remains delicate and unpredictable.
Lawyer Jobs fell, unemployment rose
In 2Q21, employment of lawyers fell 3.7%, its third consecutive quarterly decline. In addition, the unemployment rate for lawyers reached its highest level since 2Q14 and stands at 1.9%, potentially indicating that despite the overall economic recovery, many lawyers are unemployed or have left their posts. And while it may seem that a drop in employment in one field will always lead to higher unemployment, it is not. Workers who quit their jobs but choose not to look for a new job will not contribute to an increase in the unemployment rate because they leave the labor market. (Think about people who are retiring or choosing to take a break from work.) The next question is whether unemployed lawyers will seek legal positions.
The decline in lawyer employment and the rise in unemployment may come as a surprise given the efforts many law firms are making to recruit and retain, including planning large increases in partner salaries. Companies are looking for talent and hiring, as legal services data from the BLS Establishment Survey show, which shows employment increases every month after January 2021 on an unadjusted basis. While legal services are faced with different, more negative economic realities, and therefore a reduced number of lawyers. This is reflected in the legal professions employment data from the BLS Household Survey, which shows monthly employment declines from the 2021 high of 1.85 million recorded in March.
With the economy rebounding, one would expect a higher demand for lawyers to perform legal work. But these fluctuations in legal employment are consistent with what we’ve seen in other economic downturns. As discussed in April 2020, taking the example of the Great Recession, âthe legal professions experienced many spikes in unemployment over the course of four to six yearsâ¦ instead of a dramatic increase in the unemployment rate followed by a gradual decline, which the United States of the labor market as a whole experienced. Thus, a general economic recovery does not always equate to a robust return to legal jobs in the short term.
Paralegals and Paralegals See Improvement
Paralegals saw a small gain in employment and a drop in their unemployment rate in the second quarter. While employment was 398,000, up 3.6% from first quarter figures, the paralegal cohort is still smaller than it was in 4Q20. The unemployment rate for paralegals fell 2.5 percentage points to 5.7%; also lower than the rate observed in 4Q20. So, as things slowly improve, paralegals experience an unemployment rate three times that of lawyers.
Like paralegals, paralegals also saw employment gains in 2Q21. Employment increased from 21,000 to 29,000, which represents a growth of 38% in this field. Some of these new jobs may be assigned at the start of summer internships, so growth in this category may not be permanent. Third-quarter BLS data will confirm whether this growth is continuing or simply the result of the opening of temporary positions for law students.
Legal support roles immersed
After strong growth in 1Q21, employment in legal aid functions plunged 34.9% in 2Q21 to 71,000. BLS defines legal support roles as those positions that do not fit into the categories of. lawyer, paralegal, paralegals or title examiners. It is therefore a catch-all for positions such as receptionists, couriers, reception staff and other similar roles. Historically, legal support roles have fluctuated more than other legal professions from quarter to quarter, but this tipping point has become particularly pronounced during the pandemic.
Fluctuations in employment in these roles make sense as law firms will sometimes have different needs when it comes to these support roles. For example, there may be a greater need for reception staff if a business is growing and on the contrary if it is declining.
As law firms and legal departments return to their offices in greater numbers, employment in legal support roles was expected to increase due to an increased need to support operations on site. However, as a legal occupation telecommuting fell to its current level of 40% from 48% in March, employment in legal support roles has actually fallen.
Several factors could explain this result. For example, law firms and legal departments may have staffed their support staff expecting their staff to work full time from the office, but employees, in reality, may be using a hybrid model, this which reduces the need for in-person support staff.
Employment of title reviewers, abstracts and researchers increased
Title reviewers, abstracts and researchers saw a strong 2Q21 in terms of employment growth, increasing the number of employees in the field by 57% to 124,000. And while potentially surprising, there are a few factors. that can help make sense of this dramatic increase.
According to the BLS, the top industries for employment of title examiners, abstracts, and researchers include: legal services, insurance companies, real estate, car dealerships, and oil and gas extraction. gas. And although employment in the legal professions fell in the last quarter, the overall economic improvement could generally mean better employment prospects for other industries in which these employees commonly work.
For starters, the housing market is booming. Consumers and businesses alike need a lot of these positions to help them buy real estate, which could potentially help increase employment in these fields.
In addition, oil prices are starting to rise. As these prices increase and extraction becomes more profitable, oil and gas companies may need more services provided by title examiners and extractors, such as examining real estate and ensuring that any new lease. is on land where they can operate without title or ownership issues.
Insurance companies and auto dealers might also expect more business from increased economic activity, which will also translate into a better employment image for this group of employees.
Women fare better than men in legal employment
Since June 2020, women have experienced a more stable representation trajectory in all employment in the legal profession. Men have a declining trend, with less representation in the overall employment of legal occupations.
While some believe the pandemic would usher in a female exodus in the legal arena, especially Big Law, data from the BLS shows a different story. Overall, the number of women in the legal field is higher than at the end of 2020, even though the number of men has continued to decline. These data, however, do not tell us whether female lawyers are quitting, as they reflect all people in legal professions.
The decline in employment among men could be explained by the fact that they have held declining positions in overall employment in recent quarters, such as lawyer positions, or even that they have taken their retirement.
An unclear way forward
Monthly employment data from the BLS shows that employment in the legal professions declined slightly in each month of this quarter, following a sharp decline between March and April 2021.
This could foreshadow more employment problems for the legal field in the future. Unlike the first quarter of this year, where consecutive positive monthly data counteracted the overall negative quarterly trend, the second quarter features quarterly and monthly data going in the negative direction, apparently stagnating on a monthly basis.
However, overall economic growth and a potential emergence of the pandemic could quickly alter these numbers. We’ll continue to monitor the situation, so stay tuned for our next quarterly update.
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