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Legal sector headcount dropped 5.5% in April to nearly 20 year low

Caroline Spiezio  

Caroline Spiezio  

(Reuters) - The U.S. legal industry cut 64,000 jobs in April, dropping approximately 5.5% to 1,097,600 jobs, a nearly 20-year low, according to a report released Friday by the U.S. Department of Labor, as the coronavirus pandemic batters the nation’s economy and sparks layoffs at law firms.

The last time that the U.S. legal industry’s total headcount was below 1.1 million was in October 2001, according to data from the Department of Labor, and the sector’s headcount had risen relatively steadily from mid-2000 until around 2007. In the aftermath of the 2008 financial crisis, the legal sector hit its lowest employment numbers in Dec. 2009 at 1,109,900 total jobs.
Amid the coronavirus pandemic, large law firms including McDermott Will & Emery and Locke Lord have laid off staff and Nixon Peabody and Bremer Whyte Brown & O’Meara have laid off associates. Others, including Seyfarth Shaw and Squire Patton Boggs, have announced furloughs. More than 50 law firms, including Hogan Lovells and Mayer Brown, have said they are taking steps to cut costs, such as reducing pay or shortening summer associate programs.
Most Americans in April were under some form of a lockdown to prevent the spread of the highly contagious coronavirus, and courts and businesses nationwide shuttered their doors, drying up deal and litigation work at law firms.
In an April survey of 485 U.S. legal professionals conducted by legal tech firm Clio, 56% of respondents reported a significant decrease in people reaching out to them for legal help since the pandemic hit, and 59% said they are significantly less busy at work. Weekly openings of new U.S. legal matters were down 40% compared with their level in late February, Clio found, in its report that also aggregated anonymized data from tens of thousands of legal professionals who use its software.
In March, the legal sector had lost approximately 1,100 jobs, according to the DOL. It had added jobs in February and January.
Jobs are counted in the industry that their payrolls are processed under. That means lawyers, paralegals, secretaries and other support staff on a law firm payroll fall into the legal services count, while in-house counsel paid by non-legal industry companies do not.
The U.S. economy as a whole lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression.
The Labor Department’s closely watched monthly employment report on Friday also showed the unemployment rate surging to 14.7% last month, shattering the post-World War Two record of 10.8% touched in November 1982.

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