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SCG Legal Newsletter
August 2018

 

Legal Industry Employment Declines in July

Legal industry employment dropped in July as the sector lost 2,100 jobs while the overall U.S. economy added some 157,000 jobs and the unemployment rate declined to 3.9%. In its monthly outlook of the country’s employment situation, the U.S. Department of Labor’s Bureau of Labor Statistics reported August 3rd that 1,137,400 worked in the legal services industry in July. The results reflect a 2,100 job decline from the 1,139,500 people employed in the legal sector in June. The June total was revised downward from the agency’s initial report last month, in which provisional data showed 1,141,400 people were employed in legal services. However, even with July’s job losses and the downward revision to June’s figures, the legal industry has experienced a net gain of 1,100 jobs over May’s employment figures. The July 2018 numbers also indicate a 2,000 job increase over the same month in 2017. While BLS showed a drop in legal employment in July, the agency’s jobs report comes on the heels of positive news for junior lawyers joining the field. The National Association for Law Placement released a study this month (see related story below) showing a “surprisingly strong” job market for 2017 law school graduates.

 

Recent Law Graduates Experiencing Strong Job Market

The 2017 law school graduating class is finding much healthier job prospects than those who’ve recently preceded them, according to new entry-level employment figures from the National Association of Law Placement. Overall, new graduate employment increased 1% over the previous year, to 88.6%. But more significantly, the percentage of 2017 graduates who got jobs that require bar passage within ten months of completing their degrees rose more than 4% to nearly 72%, which is higher than the cumulative gains posted over the previous four years. The rise in the percentage of new lawyers in jobs requiring bar passage alongside the boost in overall employment is the “single most important indicator of an improved market,” according to NALP. “Barring another economic slowdown or interruption, and barring a significant jump in law school enrollment as a result of rising applications, the employment outlook for recent law graduates looks brighter – if not exactly rosy – than it has at any time since 2008, and that is good news,” said NALP Executive Director James Leipold.

 

PwC Legal Revenues Top $90M as Big Four Continue Push into Law

PwC’s legal operations brought in approximately £70 million ($92 million) in U.K. revenues during fiscal year 2018 financial year, placing it just outside the U.K. top 50 based on last year’s rankings. The Big Four accounting firm, which received an alternative business structure license in 2014, enabling it to integrate its legal arm into the wider business, now has approximately 350 legal practitioners in the U.K., offering advice in cybersecurity and data protection, corporate reorganizations, disputes, employment, immigration, M&A, pensions and technology. The firm’s legal services arm stopped being a distinct business unit after an integration process took place, meaning its lawyers now sit alongside their counterparts from the wider firm and report into PwC’s leadership. Its last results prior to the integration, reported in September 2016, saw the legal arm boost revenues from £48.5 million ($64 million) to £59.9million ($79 million). Since then, PwC has launched a flexible lawyering service as part of its “new law” offering for large in-house legal teams, while last October it announced plans to start offering legal services in the U.S. through the launch of a new venture, ILC Legal. All four of the Big Four accounting firms now have ABS licenses enabling them to provide legal services in the U.K. Deloitte became the last of the group to be granted a license earlier this year, after KPMG and EY were both awarded licenses in 2014.

 

Survey Finds Competitive Pressures and Inconsistent
Management Support Hinder Efforts to Win New Business

The 2018 Law Firm Marketing & Business Development Survey, conducted jointly by LexisNexis® InterAction® and Catapult Growth Partners, has revealed that, after a tumultuous few years of change in the legal industry, business development and marketing professionals in law firms have adjusted to a “new normal” and are applying more innovative methods for collaboration and client development so their firms can thrive in a very competitive market. While more than 75% of respondents in 2017 agreed or strongly agreed that “the strategies and activities law firms require to win new business today have changed considerably in the last two years,” that sentiment was down 10% from 2015, and so far in 2018 just 32% of respondents agree or strongly agree with that statement. However, even as the pace of change appears to have slowed somewhat, competitive pressure has grown. While 59% of COOs and 68% of managing partners believe business development and marketing are effective in helping firms deal with competitive pressure, 60% of respondents say they are not satisfied with processes in place to measure marketing success. Most firms continue to track specific metrics related to business development and marketing activities (web page visitors, event ROI, etc.), but the majority are still not using higher level metrics systems to track patterns, view the entire pipeline or score leads. The survey notes that COOs and managing partners are “asking for data-driven analytics at increasing rates” and are challenging their marketing teams to come up with more outcome-focused data to guide delivery and execution of strategic programs.

 

 

 

 

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