It is hard to form a clear picture of the current state of the economy and legal market because things have changed so quickly. Data from various sources, supported by anecdotes from the Legal.io community, provides some insight into what might happen over the coming months.
US Bureau of Labor Statistics
The US Bureau of Labor Statistics or BLS keeps track of key US employment metrics. The BLS April jobs report, due Friday May 8th 2020 (Today, at the time of writing), will go down in infamy.
The Jobs Report shows a loss of 22 million jobs in the month of April, and an unemployment rate of 14.7%, compared to 4.4% in March. The overall job number in the "legal services" category went from 1,156,500 in March 2020 to 1,092,100 jobs in April, a loss of 64,000 jobs in the sector.
Job opportunities: Indeed
Job site Indeed.com reports that the number of new job postings in the US on its site in April 2020 was down 45.5% from April 2019. This reflects a significant number of businesses that abruptly closed their doors in mid-March or had to lay off personnel, as well as businesses that have implemented temporary hiring freezes until market conditions become more certain.
Job opportunities: LinkedIn
LinkedIn's Chief Economist Karin Kimbrough reported in a post published on April 20th 2020 that "thus far, hiring in the U.S. and U.K. hasn’t dropped as drastically as what we’re seeing in Italy or France. However, it has continued to deteriorate through the first of April and is now running close to 30% below where it was a year ago."
More recent indicators from LinkedIn data point to what recovery might look like. In particular, recent data from a post published on April 30 shows a recovery in the hiring rates in some of the countries affected most early by the pandemic. China in particular is rebounding, closing in on 30 percentage point improvement in the growth rate between March 13 and April 24. Similar patterns may emerge in other jurisdictions who are in an earlier stage of their pandemic response.
Job opportunities: Anecdotes from the community
The statistics above support some of the anecdotal evidence we've seen in terms of legal hiring practices, both in the San Francisco Bay Area and the US at large. Several tech companies such as Lyft, Uber and AirBnB announced layoffs this week, adding to the increasing number of companies implementing such measures. At least in some of these companies, headcount reductions are happening across the board and are affecting legal departments and other business units alike.
At the same time, companies in San Francisco and the Bay Area continue to hire for legal roles, as evidenced by the activity on our job board. Certain industries such as healthcare stand out somewhat predictably as being less likely to see immediate headcount reductions, and this trend also shows true for companies that support remote work practices. However, overall, available opportunities seem to have declined strongly, with many companies postponing decisions.
When companies are hiring, a number of aspects are markedly different or more pronounced than before:
- Companies are faced with a remote-only (near) future, and are forced to consider remote candidates. While some in-house departments are fully expecting to return back to office asap, others seem more willing to consider candidates that can work remotely in the short and in the long term. This also opens up some interesting opportunities for jurisdictional arbitrage, which can have a big impact on pricing.
- Companies are even more strongly considering non-attorneys for certain roles, and we are seeing a stronger emphasis on legal operations and paralegal roles. This does not seem to be solely related to price, but also to a desire and a stronger need to create more resilient and streamlined processes.
- Although contractor attorneys deployed through staffing agencies in legal departments were affected by the immediate workforce reductions, where headcount is lacking but work remains to be done, flex counsel and secondment options are being considered as a temporary option.
- More generally, its clear from conversations with customers and members in our community that achieving cost reductions will be more important and often strictly necessary, which will trigger review and further rationalization of legal budgets.
Well over 60,000 legal jobs were lost in the past month, and in the short term, the total number of available new job opportunities in the legal market has contracted 40%+ compared to this time last year. Whilst some industries are seeing peak demand for certain legal support roles, the overall number of opportunities has declined strongly in the short term.
Significant uncertainty remains in the market, and we expect legal hiring to continue trending well below 2019 levels for at least the next few months. Hiring practices are forcibly changing as a result of global circumstances, and it remains to be seen how permanent some of these changes will be.
There's some glimmers of hope as we are starting to see signs of recovery in some of the countries that were affected early on. We continue to update our community on current events.
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