The U.S. legal industry added 3,200 jobs in May, according to a report released Friday by the U.S. Department of Labor, with headcount rising 0.27% from April when it had plummeted to a nearly 20-year low as the coronavirus pandemic sparked layoffs and furloughs at firms.
The uptick brought the total number of legal sector jobs in May to 1,097,500 – still 62,800 fewer jobs than it had in March, according to Labor Department data. That’s the month state governments across the U.S. began ordering residents to stay at home, closing businesses and courts, which in turn dried up deal and trial work and caused the demand for many legal services to plunge.
Since March, at least eight law firms have announced layoffs, including McDermott Will & Emery and Locke Lord and nearly 30 have announced furloughs, including Seyfarth Shaw and Squire Patton Boggs. Six of those firms on Friday told Reuters they have not yet brought back furloughed employees. The others did not immediately provide comment.
Kimberly Leach Johnson, the chair of law firm Quarles & Brady, said in an email Friday the firm had a “much more robust May than (it) anticipated” but that it is waiting to bring back furloughed employees because its “largest clients are deferring payments.”
Legal industry consultant Peter Zeughauser said he’s heard from firms that their May financial performance exceeded expectations, but that generally big firms didn’t make new hires or bring back furloughed employees.
Still, he noted, big law firms are just a small portion of the U.S. legal industry.
In the Labor Department’s report, 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 unexpectedly added jobs in May after suffering record losses in April, offering the clearest signal yet that the downturn triggered by the pandemic could be over, though the road to recovery may be long.
The Labor Department’s report Friday said the U.S. jobless rate fell to 13.3% last month from 14.7% in April, a post World War Two high. It came on the heels of surveys showing consumer confidence, manufacturing and services industries stabilizing.
Nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.687 million in April, according to Labor Department data.
(NOTE: This story has been updated to add comment from law firms and legal industry consultant Peter Zeughauser.)