Law Firms

Prof: Shrinking Market, More Competition Will Bring Permanent Challenges for Law Firms

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Law firms and lawyers will continue to face brutal competition over market share, especially from the rapid growth of other legal service providers, according to analysis by Indiana University law prof Bill Henderson. And law schools must take increased action to innovate outdated curriculum if they hope to secure high quality jobs for their graduates in the future.

Henderson crunched the 2010 numbers just released by the U.S. Census Bureau for the County Business Patterns dataset, which compiles payroll and employee headcount data by sector for all employers operating within the U.S. In a post Wednesday on the Legal Whiteboard law blog, he notes that law offices, which comprise 93 percent of the U.S. legal services industries, shrank by 21,600 jobs between 2009 and 2010. Total payroll also sank by $113 million, Henderson reports in his analysis, which includes charts that track data from 1998 to 2010.

The high-water mark for U.S. law office employment was in 2004 with 1,122,723 jobs, four years before the recession hit, as Bill and I reported in the ABA Journal July 2011 cover story, “Paradigm Shift: Law Job Stagnation May Have Started Before the Recession–And It May Be a Sign of Lasting Change.”

“We legal educators have a really hard time getting our head around this changing market—naively, we think the solution is a grand idea that will surface during an academic conference,” Henderson writes. “That’s not going to happen. Instead, to survive, each law school is going to have to get more than its proportionate share of high quality jobs for its graduates—you don’t have to outrun the bear, just the other law schools.”

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