Legal Employment Sees Smaller Gain Than Other Sectors

U.S. legal job losses are leveling off, but hiring gains are fractional compared to other sectors starting to rebound after months of historic economic distress due to the coronavirus pandemic.

The legal sector registered a modest gain of 3,200 jobs between mid-April and mid-May, according to Labor Department data released on Friday.

Carson Wilson, an economist with the agency’s Bureau of Labor Statistics, cautioned that the gain “is so small, it may be statistically insignificant” compared to the 64,000 job losses reported in the same period between March and April.

Overall nonfarm payrolls added 2.5 million jobs in May, buoying optimism on Wall Street and Main Street that the nation’s economic recovery has begun in earnest.

The legal sector is private. Its fortunes reflected that of the overall private sector, which generally fared well in the May jobs report. There were large job gains in leisure and hospitality, construction, education, health services and retail.

Employment of lawyers in law firms and other offices stands at almost 1.1 million.

Law firms and other legal employers earlier this spring imposed austerity measures and changed up other aspects of operations much like the rest of reeling American business.

As the pandemic set in, law firms employed techniques to slim down payrolls. These included staff furloughs as well as reductions in attorney and partner compensation.

Layoffs were reported at firms like Minneapolis’s Dorsey & Whitney; Goodwin Procter; Greenspoon Marder, and Nixon Peabody.

Some firms also may be trimming ranks with unannounced, or “stealth” layoffs, which also occurred during the Great Recession a dozen years ago. Moreover, some staff have lost jobs temporarily in the new work-at-home environment if they were unable to perform them remotely or were being underutilized.

Reflecting a cautious financial outlook, many law firms dialed back summer associate programs, the pipeline for new talent, and are hiring laterally more slowly than a few months ago.