State Capital Group - News & Publications

 

SCG Legal Newsletter
November 2017

 

More Women Made Partner in 2017, But Still Lagging Men

A record number of women made partner in 2017, but female attorneys still lag far behind their male counterparts in promotions to partnership, according to a new report by the Diversity & Flexibility Alliance. Using data from more than 133 Big Law firms, the report found that women made up 38.1% of newly promoted partners—up from 37% last year—while men accounted for 61.9% of promotions in 2017. In 2012, which was the first year DFA began collecting its data, approximately 33% of newly promoted partners were women. That percentage remained fairly constant until 2016, when women accounted for 36% of partnership classes. One particularly noteworthy finding was that 43 law firms, or roughly 32% of those surveyed, had new partner classes made up of over 50% women, more than in any since the study began four years ago.

 

Legal Industry Loses 1,100 Jobs in October

The legal industry lost 1,100 jobs in October as the overall U.S. economy posted job gains and a slight edging down in the national unemployment rate, according to preliminary data released November 3rd by the U.S. Department of Labor. The Labor Department’s Bureau of Labor Statistics, which issues a monthly report on the employment situation in multiple U.S. industries, showed a decline in the number of people employed in legal services in October compared with the prior month. BLS reported that in October, 1,126,200 people worked in the legal services sector, which includes lawyers, paralegals, legal secretaries and other law-related occupations. The seasonally-adjusted October figures are provisional and could be revised. This latest release also showed downward revisions in legal industry job figures for September and August — September’s numbers were revised downward by 1,300 jobs from the BLS’ initial report for that month, while August’s numbers were revised downward by 1,000 jobs from the provisional figures issued last month.

 

Corporate Executives Forecast Smaller Deals in 2018

M&A activity over the next 12 months will be dominated by small and middle-market deals, according to corporate executives who participated in the 13th annual Dykema M&A Outlook Survey. Seventy percent of corporate executives expect the number of deals valued at less than $50 million to increase over the next 12 months, and 53% expect an increase in the number of deals valued between $50 million and $100 million. The leading industries for M&A activity are expected to be healthcare, technology and energy, in that order, which is a switch from last year when energy was expected to be the busiest industry in the M&A arena, followed by healthcare and technology. Overall, executives are optimistic about the M&A outlook for the next year, with 39% forecasting the U.S. M&A market will strengthen, compared to 33% last year, and 37% the year before. Over the next 12 months, 68% of respondents said they expect to be involved in an acquisition, compared with 70% a year ago. And 38% expect to be involved in a joint venture, compared to 43% last year. Less than half, 47%, said they expect to be involved in a sale over the next year, compared to 48% a year ago. For the fourth year in a row, executives identified the availability of capital as the leading driver of M&As – much of it, private equity money.

 

Law Departments Adding Lawyers, Cutting Budget

The amount of legal work that many companies are engaged in is growing, but legal department budgets aren’t. A new report from Thomson Reuters finds approximately three-quarters of all legal departments say that controlling outside counsel costs is a high priority, which in some cases has resulted in adding in-house lawyers and legal operations staff. According to the report, 65% of departments said the volume of legal matters they are handling increased in the past six months, but only 30% of department budgets increased. In order to keep legal spending down, departments are focused on enforcing billing guidelines, reducing invoice expenses and working with law firms that in the words of the report “proactively show their value.” The renewed focus on controlling costs is resulting in more in-house work, with 85% of departments stating it is a priority to handle more matters internally. Thirty-four percent of companies added in-house lawyers in the past six months. Additionally, the legal operations function within legal departments is growing, mainly in larger departments. Seventeen percent of survey respondents indicated an increase of staff on the legal operations side in the past six months. Only 5% have cut back on staffing for this function. Thirty-eight percent of large legal departments – categorized as those with $50 million or more in external spend per year – added staff for legal operations in the past six months.

 

 

 

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