The WSJ Law blog reported on Friday on the December Labor Department Report statistics regarding jobs in the legal services sector. The report shows a loss of 1,800 jobs in the legal sector in December with a loss of 2,700 jobs in the last year.
As law schools continue to grow classes and pump out students, the ABA President isn’t sympathetic:
It’s inconceivable to me that someone with a college education, or a graduate-level education, would not know before deciding to go to law school that the economy has declined over the last several years and that the job market out there is not as opportune as it might have been five, six, seven, eight years ago
-William Robinson, president of the American Bar Association
Even investment-economy blogs are getting into the act. Here is a Zero Hedge Blog post that characterizes the issue as a bubble in lawyers. The focus of the Zero Hedge article is the huge debt accumulated by most law students who are entering a declining job market. The article has a good summary of the global problem:
Our economic slump is pushing four years now. The evidence is easy to find: huge deficits, slow growth, mortgage defaults, declining real estate prices, high unemployment and an economy that can’t produce enough jobs. There are less obvious consequences too.
In my opinion, the legal sector in Mississippi is feeling the national trend of a legal-sector recession harder than in most places. When the economy crashed in 2007–2008 Mississippi’s legal sector was already in a recession caused by the elimination of mass joinder, more conservative jurors and—to a lesser extent—tort reform caps. Other places have been in a recession since 2007. The Mississippi legal sector recession started at least 5 years earlier.
Even worse, after nearly 10 years of a receding legal sector in Mississippi, there is no sign that the market is stabilizing and will at least stop shrinking anytime soon. In fact, I predict the problem will accelerate over the next two years.
During this time period, I expect to see a few more noticeable purges of lawyers by big firms similar to what Jones Walker did when it took over Watkins Ludlam. Jones Walker’s move reflected a conclusion that Watkins Ludlam had too many lawyers. I doubt Watkins Ludlam was the only big firm in Mississippi with that issue. If I am correct, other firms will be forced to deal with the issue in the next two years.
Lawyers who have their own book of business that they can take with them to another firm or their own practice will be safe. Everyone else is exposed–and that is a big segment of big firm lawyers, due to the reliance on institutional clients.
Lawyers in the exposed category may look around and conclude that they are safe because they are a better lawyer than Joe Blow down the hall, but it’s more complicated than that. Law firm politics are always brutal. But firm politics are even more cut-throat when there isn’t enough work to go around. The surviors will be the ones who win out at the firm politics game.