Economic Census Shows Legal Sector Battered by Depression

But first, it appears the link to my American Lawyer article was bad, so here it is correct.

Now, today’s fun.

The Census Bureau is slowly releasing data from its 2012 Economic Census, a survey it produces every five years. In government data years, it’s like waiting for a total solar eclipse. Because the last Economic Census was in 2007, we now get another look at the kind of damage the Lesser Depression has had on the private legal sector’s specific “Offices of Lawyers” category.

Economic Census--Industry Snapshot (2012)

(Source: Economic Census Industry Snapshots 541110)

Generally, it’s bad. There were fewer people employed in offices of lawyers in 2012 than in 2002. Nor does it help that Census doesn’t adjust the dollar amounts by any inflation measure, so while it looks like the revenues and payrolls are rising, in fact they are not.

Economic Census--Industry Snapshot (2012, 2013 $)

(2013 $, author’s calculations)

I have two observations to make: One, given that employees per establishment fell, it appears that larger firms have been the ones paring back. Two, similarly, like the employment projections I frequently write about, the number of firms and employees is a net growth figure that combines gross outflows with gross inflows. In other words, many people ejected from large firms may have started or joined smaller practices. Consider this a downshift in the sector’s performance.

The supply of lawyers and whatever capital they need exists, but the demand does not and it doesn’t look like it’s coming back any time soon.

2 comments

  1. With all the underemployed lawyers around, if there was genuine demand for lawyers in these areas, you’d think someone would fill that demand.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s