State Capital Group - News & Publications

 

SCG Legal Newsletter
August 2017

 

Am Law 100 Firms Pulling Ahead of Smaller Peers, Report Finds

While large law firms faced significant headwinds in the second quarter of the year, the largest firms continue to separate themselves from their smaller peers, according to the most recent Thomson Reuters Peer Monitor report. Demand across all firms slipped 0.1% from the same quarter last year. But there was a wide gap between Am Law 100 firms, which saw demand rise 1.1%, and Am Law Second Hundred firms, where demand fell 0.6%. So far this year, demand at Am Law 100 firms is up 1.6%, but it remains down 0.5% for Second Hundred firms. Am Law 100 firms also had a higher rate of growth than their smaller peers. Rates at the largest firms grew 3.4% percent from the second quarter of 2016, compared with 2.8% among Second Hundred firms. The report goes on to say that Am Law 100 firms have been able to pull ahead of their peers by outperforming them in an unlikely area for growth: litigation. While courtroom work had been declining steadily in recent years, Am Law 100 firms have bucked that trend this year by increasing hours in their litigation departments by 0.2% percent during the second quarter.

 

Legal Industry Employment Declines in July

The U.S. legal industry lost 4,300 jobs in July following three previous months of job gains, according to preliminary data recently released by the U.S. Department of Labor. The Labor Department’s Bureau of Labor Statistics issued its monthly employment report on August 4th, showing the decline in the legal industry, which employed a provisional total of 1,126,400 people in July. BLS also issued a slight revision to the legal services employment figures for June, adjusting that total down by 100 jobs compared with preliminary figures released in early July. The downturn in employment numbers, which include lawyers, paralegals and legal secretaries, comes after the legal industry had experienced three straight months of job growth, beginning in April. Despite the decline in July’s figures, the number of people working in the U.S. legal industry is still up by 600 jobs since January. The July drop in legal industry jobs comes as the U.S. economy’s employment situation reportedly beat economists’ expectations, adding an overall total of 209,000 jobs in the month with an unemployment rate of 4.3%.

 

Survey Says With Better Pay, More Associates Staying Put

Despite perennial complaints among associates about life in Big Law, a combination of rising paychecks, greater attention to associate satisfaction and a more cautious lateral market may be keeping young lawyers from wandering. On average, 16% of associates left their firms in 2016, compared with 20% in 2015, according to NALP Foundation data for its Update on Associate Attrition Study. That's the lowest rate of attrition in the last four years of the study, according to the NALP Foundation, which gathers information on law firm associate departures from firms of all sizes in the United States and Canada. Among the factors believed to be contributing to the decline in associate attrition are the widespread salary increases that were sparked when first-year associate pay at leading New York firms rose by $20,000 to $180,000 last year, as well as a decline in the number of lateral associates firms are hiring.

 

 

 

 

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