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Legal Sector Loses Almost 9K Jobs In August – But Is ‘Rightsizing’ To Blame?

Daily Legal Briefing by Daily Legal Briefing
September 6, 2022
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Biglaw Probably Won’t Be Hemorrhaging Lawyers Via Layoffs Anytime Soon
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Job Losses layoffsWith the country in a technical recession, financial worries have been plaguing the legal profession. Demand for legal services has slumped since the early post-pandemic’s heydays, and law firms are reportedly looking to rightsize their workforces.

But has the rightsizing already started?

Preliminary August 2022 data from the U.S. Bureau of Labor Statistics shows that the legal services sector lost 8,900 jobs, for a total of 1,179,300 employed in the legal field, including lawyers, paralegals, and other legal professionals. This alarming loss comes hot on the heels of five consecutive months of gains.

Despite the 0.75% decline, the number of legal services jobs in August is still higher than the number of legal jobs recorded in August 2021 (1,157,200), and higher still than the sector’s February 2020 pre-pandemic high of 1,163,000.

What could possibly be the cause? Here’s more, from Law360:

According to John Cashman, president of legal consulting and recruiting firm Major Lindsey & Africa, the recent decline of legal jobs has largely stemmed from the slowdown in demand for corporate transactional lawyers and their support staff.

“What we’re really seeing is a mismatch — a lag, if you will — between overall economic activity and the legal work that supports it,” Cashman said. He added that he anticipates the legal sector will continue to “retrench” as firm leaders wait to see what happens to the broader economy.

Yikes. This all stinks of stealth layoffs, the disturbingly popular method used by firms to cull the associate herd. For those who might be hearing the term for the first time, stealth layoffs are disturbingly popular in Biglaw and they allow firms to cut headcount without confirming that there were any financially based layoffs. Firm frequently couch the reductions in performance review terms that coincidentally happen in the midst of a downturn — whether economic- or demand-related — often making those let go doubt their lawyering skills. By their secretive nature, they can be challenging to confirm in specific numbers, but insiders slowly find out something is amiss.

As far as staff is concerned, they’ll sometimes be victims of stealth layoffs, but it’s far more likely that they’ll be offered a voluntary buyout. We often refer to buyouts as the kinder, gentler way of parting with employees, but those on the other side of a buyout are still left without jobs.

As we’ve mentioned in the past, the good times don’t last. Perhaps this is why Biglaw summer bonuses were almost a complete no-go — firms were much more busy contemplating their financial futures and quietly letting staff and associates go. Good luck out there, everyone.

If your firm or organization is reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff announcement that we publish.

After Steady Growth, Legal Sector Shed 9K Jobs In August [Law360]
After several months of gains, legal sector loses 8,900 jobs [ABA Journal]


Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Enter your email address to sign up for ATL’s Layoff Alerts.





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