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SCG Legal Newsletter (April 2017)


Legal Employment Declines for Third Straight Month

Employment in the U.S. legal industry declined again March, losing 1,500 jobs, according to preliminary data released April 7th by the U.S. Department of Labor. The agency's Bureau of Labor Statistics showed 1,121,800 employed in the legal services sector in March compared with 1,123,300 in February. This is the third straight month the legal industry has lost jobs. The monthly number of legal jobs has continued to fluctuate over the past several years, with estimates in the range of 1.12 million and 1.13 million since June 2013 – a decline of more than 50,000 since the industry's pre-recession high in 2007. Overall, the U.S. economy added 98,000 jobs in March, according the preliminary BLS data. That figure fell short of the 180,000 jobs many economists expected the economy to gain last month. The nationwide unemployment rate in March fell to 4.5%, down from 4.7% in February.

Facebook Sets Diversity Minimums for Outside Firms

A year after starting a push to diversify its own workforce, Silicon Valley giant Facebook is now imposing those same standards on its outside law firms. New standards require that women and ethnic minorities account for at least 33% of law firm teams working on its cases. In addition, law firms must show they “actively identify and create clear and measurable leadership opportunities for women and minorities” when they represent the company in litigation and other legal matters. “Firms typically do what their clients want,” Facebook General Counsel Colin Stretch told the New York Times. “And we want to see them win our cases and create opportunities for women and people of color. We think the firms are ready – our articulation gives not just permission but a mandate.” The Times notes that Facebook’s move is part of a trend; MetLife plans to announce a new policy this month pushing for diversity in outside legal counsel, and HP adopted a more stringent program in February. “Law is the least diverse white-collar profession,” Jane Lee, chief executive of the Minority Corporate Counsel Association, told the Times.

Associate Attorney Rates Outpacing Partners’

Year-over-year rates for associate attorneys grew at more than double that of partners in 2015, according to a recent report issued jointly by Wolter Kluwer’s ELM Solutions and CEB. The average associate’s rate increased by 7.3%, the report found, as opposed to partners’ year-over-year increases of just 3.6%. First-year associates’ rates remained flat. The 2015 average year-over-year rate increases reached 5.4%, the highest level since the Great Recession, but have not yet reached the average of more than 8% prior to 2008. The study found that law firm size was the single largest driver of rates. New York City lawyers had a 7.9% year-over-year increase in 2015, the highest in the country, followed by a 6.8% increase for Dallas attorneys, and 6.5% increase in Los Angeles.