Law: employment trends, past and future Essay

We are a country of law, and, when we look at employment, we learnthat we are also a country of lawyers. I’m going to review theemployment of lawyers past and present, and then take a look atprojections of future demand before turning to consider the supply ofnew lawyers. The current employment of lawyers in the United States exceeds460,000 (see chart 1). Add in judges and magistrates–who must belicensed to practice law–and the number of people working inlaw-related fields exceeds half a million. According to the AmericanBar Association, another 100,000 or so people are licensed to practicelaw.

This figure would include many legislators, law professors, andbusiness executives, quite a few of whom make considerable use of theirlegal training. No matter how you look at the numbers, lawyers are aprominent feature in our country’s occupational profile. The feature is not only prominent, it is also unsual in that alarge number of lawyers are self-employed. By and large, we are anation of wage earners. Only 8 or 9 percent of us are self-employed;yet nearly half of all lawyers are self-employed. The employment of lawyers–both wage earners and self-employed–isnaturally concentrated in the legal services industry, which is wherelaw firms are grouped.

Between 75 and 80 percent of all lawyers in 1982were employed in this industry. An additional 13 percent weregovernment employees, and small numbers were employed in nearly allother industries, notably manufacturing and finance, insurance, and realestate. At the Bureau of LAbor Statistics, we find that a projection of thefuture must begin with a review of the past. Because the legal servicesindustry and demand for lawyers are so closely linked, I will begin witha review of that industry.

Legal Services: Recent Growth The legal services industry was among the fastest growing in theeconomy over the 1970-82 period. According to BLS data, totalemployment in the industry–not just lawyers–grew from 235,000 to565,000, an increase of 140 percent or 7.5 percent a year (see chart 2).By comparison, total nonagricultural employment grew only 26 percent inthis period, or 2 percent a year.

In part, this growth reflects the overall growth of economicactivity, but even more important were other factors, such as governmentregulatory activity, business mergers, and class action suits. The1970’s witnessed increased demand for legal services stemming fromlegislative and regulatory efforts to improve the quality of theenvironment, reduce hazards in the workplace, guarantee equality of theenvironment, reduce hazards in the workplace, guarantee equality ofopportunity in hiring and promotions, and achieve other socialobjectives. The 1970’s also saw a great increase in the number ofbusiness mergers and takeovers, many of which were achieved only afterlengthy legal determinations due to the precedent-setting nature of themergers. The use of class action suits also greatly increased in thedecade. A further catalyst to growth in the period was legal trailblazing in areas such as medical malpractice, computer law, and space law.

Establishing legal rights in areas such as these often required a greatdeal of litigation. The changing demographics of the Nation also played a role in theincreased demand for legal services over the 1970-82 period. The crimerate rose, in part because the baby-boom generation was concentrated inthe teens and twenties during the period, the age groups responsible fora significant share of crimes. In addition, the divorce rate rose, asdid the number of homes purchased. Projected Industry Growth, 1982-95 The Bureau of Labor Statistics regularly develops projections underalternative sets of economic and demographic assumptions.

Theseprojections cover labor force by age, sex, and race; gross nationalproduct and the income and product composition of GNP; and employment byindustry and occupation. The latest projections by the Bureau, for1995, were released in various publications between November 1983 andJune 1984. Three different scenarios were used in making the projections. Myremarks will deal only with the moderate one. According to the moderatescenario, employment in the legal services industry is projected toincrease 53 percent (see chart 3). This robust growth is nearly twicethe 28-percent growth projected for total wage and salary employment inall industries.

The difference between the two rates is not quite asgreat as it has been historically, however, in part because some of thefactors that led to extremely fast growth–such as regulatory activityand the crime rate–are expected to moderate. Besides lawyers–both salaried and self-employed–major occupationsin the legal services industry include law clerk, elgal assistant,secretary, and other clerical occupations. These occupations will growat different rates within the industry. One of the sharpest differencesis between the rate for salaried lawyers, who are projected to grow by79 percent, and self-employed lawyers, who are projected to grow by only11 percent. These projections reflect a long-term trend. It will become evenmore difficult to establish a profitable small practice-particularlygiven the growing competition in the industry–due to the increasingcomplexity of law, which encourages concentration in a specialty, andthe rising cost of maintaining up-to-date materials. This suggests thatlaw firms may become bigger but not much more numerous. Lawyers willcontinue to hold a relatively constant proportion of the jobs in theindustry, but more of them will be in wage and salary positions than inthe past.

Legal assistants are projected to grow even more rapidly thansalaried lawyers. In fact, legal assistant is the second most rapidlygrowing occupation among the 675 occupational projects published by BLS.Naturally, the employment of legal assistants is concentrated in thelegal services industry. These workers perform mostly routine researchthat otherwise would be performed by a junior associate, a veryexperienced legal secretary, or a self-employed lawyer working alone.The rapidly growing acceptance of legal assistants in the industryreflects the notion that lawyers are most productive when they are freedfrom what can be performed by lesser trained and lower paid personnel.Legal assistants also have more modest advancement aspirations thanlawyers. At this time, it is still unclear what impact the very rapidgrowth of employment of legal assistants may eventually have onrequirements for lawyers, but in the projection period no great changeis anticipated.

Modest growth is projected in the employment of clerical supportpersonnel in the industry, reflecting the productivity increasesanticipated from office automation. Word processing systemsincreasingly speed the preparation of documents, making legalsecretaries more productive. New computer software packages likewiseimprove the productivity of support personnel in timekeeping, billing,and other administrative functions. The impact of office automation will not be confined to clericaland administrative workers, however. Lawyers and legal assistants areincreasingly discovering that the computer can assist them in their workas well. For example, packages available to lawyers in fields such astaxes, estate planning, and real estate allow them to prepare taxreturns quickly or analyze different tax strategies without spendinghours at the calculator.

Other software aids in the management oflitigation when thousands of supporting documents are involved.Similarly, legal research software packages–such as WESTLAW, LEXIS, andthe ABA’s new AMBAR system–allow lawers and legal assistants toscan thousands of case summaries for key words and retrieve the wholesummary when it’s wanted. As computer aids become more widelyused, lawyers and legal assistants should improve their productivity.At present, it is clear that automation will have a significant impacton the nature of the lawyer’s work. However, the extent of theimpact, if any, on employment growth is unknown. The growth of legal assistants and office automation aremanifestations of efforts to streamline legal services and make themmore efficient. In a sense, they mark a great change from thetraditional way of doing business in the industry.

The recent recessionseems to have adversely affected many law firms and awakened them to thefact that competition will be the hallmark of the future–or at least ofthe coming decade. Law firms have come to realize that they are goingto have to compete for the legal-service dollar, not only with eachother but with legal clinics, Sears, and in-house legal units ofcorporations. Government Although the legal services industry provides the bulk of jobs forlawyers, attorneys also work in fairly large numbers for the government.Government employment at the State and local level generally grew veryrapidly up to about 1975-76. Federal employment was essentially staticthroughout the past decade.

In the future, the government sector isprojected to grow slowly at best, with the number of lawyers employedrising only 9 percent from 1982 to 1995. Employment Growth for Lawyers, 1982-95 Turning from the legal services industry and government to thewhole economy, BLS projects an increase in the employment of lawyersfrom 465,000 in 1982 to 624,000 in 1995, an increase of 34 percent (seechart 4). The growth will be concentrated in wage and salary positionsin the legal services industry, as shown above, but faster than averagegrowth rates are also projected in two industries that together nowemploy about 4 percent of all lawyers: Manufacturing and finance,insurance, and real estate. Projected employment growth for all otherindustries is also faster than average, but the increase will accountfor less than 4 percent of the new positions.

Supply of Lawyers We have been discussing historical and projected demand. Supply isequally important but much more difficult to project. Nearly everyonewho becomes a lawyer does so by graduating from law school and passingthe bar exam. A completing correspondence school programs. The number of degrees conferred annually in law (LL.B. or J.

D.)grew from 17,421, in the 1970-71 academic year to 35,991 in 1981-82, anincrease of nearly 107 percent. Preceise projections of law graduatesare not available. But, according to the Law School AdmissionsCommission, the number of people taking entrance exams for law schoolhas declined recently; however, at least in the near future, thisdecline will not affect enrollments to any great extent. As best as wecan tell, therefore, the number of new law graduates should berelatively constant during the projection period. Another important–but usually overlooked–source of additions tothe supply of lawyers is occupational transfers. Occupational transfersinclude people licensed to practice law who enter practice frompositions such as judge, magistrate, law school professor, businessexecutive, and various other jobs, as well as from unemployment.

Manyof these transfers are probably reentrants, people who may have workedas lawyers at some time in the past but who left the occupation. Thenumber of entrants to the profession through transfer cannot beprojected with any precision, but data BLS has compiled on occupationalmobility suggest that the total may be significant. BLS data indicate that the occupational separation rate of lawyerswas only 4.9 percent from 1980 to 1981. This reflects the fact thatlawyers have a strong professional identity, enjoy considerable socialstatus, are generally well paid, and require a substantial educationalinvestment to enter the occupation.

BLS data on entrants to occupations between 1980 and 1981 indicatethat 42,000 people entered jobs as lawyers during the year, and 20,000(48 percent) of these either were in school the previous year or wereless than age 25, suggesting that they were probably recent law schoolgraduates. The remaining 22,000 entrants (52 percent) probablytransferred from other occupations since they were all age 25 and over,had not completed their education during the previous year, and hadeither been employed in another occupation or not working. Theconclusion suggested by these data–that the majority of entrants tojobs as lawyers were not recent law school graduates–requires, ofcourse, further investigation.

More than 35,000 people received lawdegrees in 1979-80, not 20,000. But these data do serve to illustratethat a significant number of people enter lawyer jobs other than asrecent law school graduates, although law school graduates certainlyconstitute a majority of entrants. Job Outlook for Lawyers, 1982-95 It is not possible to quantify–at least with any precision–theprospective supply and demand for lawyers because the volume of entrantsthrough occupational transfer cannot be quantified and the supply fromlaw schools cannot be projected with any degree of confidence.Nevertheless, some inferences can be made. If an annual occupational separation of 4.

9 percent is assumed, theaverage annual number of job openings for lawyers would be as followsover the 1982-95 period: Overall, supply-demand conditions are expected to remain about thesame as in recent years; that is, the relationship between the number ofpeople seeking entry into the legal profession and the number of jobopenings for lawyers will not change significantly. Graduates of prestigious law schools and those who rank high intheir classes should have the best prospects, while graduates of lessprominent schools and those with lower scholastic ratings may experiencedifficulty finding a job. While the overwhelming majority of graduatesare expected to find jobs as lawyers, some graduates may enter fieldswhere legal training is an asset but not normally a requirement. Forexample, banks, insurance firms, government agencies, and otherorganizations seek law graduates to fill a variety of managerial,administrative, and business positions.

In this tight job market, a lawgraduate’s willingness to relocate, legal work experience, oradvanced training in a specific area of law may be an advantage ingetting a job. Related Fields BLS does not prepare projections of all occupations related to law,but our latest projection of the job outlook for college graduates ingeneral indicates that the keen competition that characterized the jobmarket for college graduates in the 1970’s and early 1980’swill not abate appreciably through the mid-1990’s. Over the 1982-95period, according to the BLS projections, an average of about 1 in 5labor force entrants with a bachelor’s or advanced degree will beforced to take a job that does not require such eduation or else becomeunemployed. Over the past decade, the effects of this overall surplus ofcoolege graduates–or, alternatively, this deficit of college-leveljobs–have been felt more keenly by graduates in some fields than inothers. For example, more than 90 percent of those graduates of theclass of 1980 who majored in accounting, chemistry, computer science,engineering, mathematics, and nursing who joined the labor force enteredjobs that normally require a college degree.

The effects of the surpluswere felt much more by graduates in agriculture and natural resources,art, communication, English, and the social sciences. Less than 25percent of the employed graduates in these fields entered acollege-level job within a year of graduation. We have no information on the prospective job outlook forMBA’S. With regard to careers in court administration, however, theprojected slow growth in government employment suggests that few newjobs in court administration can be expected; most job openings will bedue to replacement needs. Similarly, there is little cause for optimismin the field of law school teaching. College and university facultyemployment is projected to decline over the 1982-95 period, but theannual number of law degrees is projected to remain virtually constant.As a result, opoortunities in law school teaching will probably not begood, but they should be better than many other areas of college anduniversity teaching. Summary The employment of lawyers increased rapidly during the past twodecades.

BLS projects steady growth in the legal services industry,where most lawyers are employed, but much slower growth in governmentand among self-employed lawers. Because the number of law schoolgraduates, as well as transfers from other occupations, is projected toremain high, strong competition is expected for lawyers’ jobsbetween now and 1995.


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