Law360: Legal Industry Sheds 3,000 Jobs In March After Modest Gains

Xiumei Dong | April 11, 2024, 4:33 PM

Following a modest uptick in February, the U.S. legal sector shed more jobs in March, with a loss of 3,000 jobs compared with the previous month, according to preliminary data released Friday by the U.S. Bureau of Labor Statistics.

The number of jobs in the legal sector dropped to 1,187,000 in March, down nearly 0.3% from the 1,190,000 people employed in February, based on seasonally adjusted numbers from the bureau.

The decline in March came after a slight gain in February, which was revised down to 2,300 jobs in Friday's report. January saw a revised loss of 5,800 jobs. Nevertheless, the current job count remains higher than a year ago, with 7,900 more people employed than in March 2023, according to the BLS.

In contrast, the broader U.S. job market exceeded seasonally adjusted projections by adding 303,000 nonfarm payroll jobs in March — an increase of nearly 0.2% from February and a year-over-year rise of 1.9%. The unemployment rate dipped to 3.8% from February's 3.9%.

The legal sector's job count includes lawyers, paralegals and other legal professionals. Despite a slowdown in hiring last year, Michelle Fivel, a founding partner of legal recruiting firm Hatch Henderson Fivel, noted that law firms have picked up their hiring process this year, with some showing "a bigger appetite" for hiring transactional associates.

"We are seeing an increase in demand for M&A associates, which is an extremely positive sign," Fivel said, adding that law firms are demonstrating more interest in hiring for finance and bankruptcy-related positions, while demand in areas such as capital markets, technology transactions, and emerging companies and venture capital is still low.

"I think we're going to continue to see either steadiness or an increase," Fivel continued. "I think it all depends upon deal volume. If you see M&A continue to get busier, then hiring across the board will continue to stay very healthy and active."

According to a March report by the National Association for Law Placement, lateral lawyer hiring plummeted 35% overall in 2023, with lateral hiring down across all lawyer categories and the associate lateral market being hit the hardest — falling nearly 43% after 2022's decline of approximately 20%.

Meanwhile, partner lateral hiring fell in 2023 by 10% after experiencing a 5.5% increase in 2022. Hiring was down for other lateral lawyers, including staff attorneys and counsel, by nearly 32% last year, NALP's data showed.

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