ANALYSIS: Lawyer, Legal Employment Close Out 2023 on a Down Note

The fourth quarter of 2023 was unforgiving to the legal field, with broad-based decreases in employment and increases in unemployment. The legal industry’s negative numbers came despite otherwise rosy macroeconomic news on inflation, jobs, and GDP growth.

While the legal field ended 2023 with higher overall employment than when it began (1.88 million versus 1.82 million), the quarterly drop in legal employment from Q3’s post-pandemic high of 2 million, and the rise in unemployment likely mean that more legal workers were on the job hunt in a tighter market in Q4 than in the previous quarter—potentially foreshadowing trouble for the industry this year.

Quarterly employment levels fell across four major job categories in the legal field: lawyers, paralegals, legal support workers, and title examiners.

However, not all legal positions fared equally.

Legal support workers and title examiners experienced the greatest drop in employment in Q4—both contracted by 10% or more—while the drop for lawyers and paralegals was more moderate.

Title examiners’ bad quarter could be a result of high interest rates, which can impact housing and land sales and thus the need for title examiner services.

But the drop in employment for lawyers, paralegals, and legal support workers might just be a part of a larger pattern.

Many law firms, for example, restructured and laid off employees throughout 2023, reflecting an industry experiencing headwinds as it enters the post-pandemic world.

Lawyers and paralegals, which are the two largest groups of employees in the legal field, have predictably not gone unscathed by restructuring and employment trends in the legal industry. But paralegals, who have experienced falling employment for two straight quarters, did see a deceleration in their employment rate’s contraction—potentially foreshadowing a turnaround in Q1 2024.

Moreover, legal support workers have historically had large swings in employment from quarter-to-quarter, which could explain their downturn in this quarter’s employment data.

The overall drop in legal employment coincided with an increase in average quarterly unemployment rates from Q3 to Q4 for the field overall (0.9% to 1.1%). A closer look at unemployment within the field shows increases for these groups: lawyers (0.4% to 0.9%), paralegals (1.2% to 2.5%), and women (1.4% to 1.8%). Unemployment rates for men, a bright spot in this quarter’s data, dropped slightly from 0.5% to 0.4%.

The general increase in unemployment rates and decrease in employment levels in the legal industry mean that for at least the early part of 2024, law firms and legal departments have the upper hand, as more job seekers aim to secure fewer available jobs.

Bloomberg Law subscribers can find related content on our In Focus: Lawyer Development page. Data accessible on the Bloomberg Terminal at EMOCLAWY <GO>, EMOCPARA <GO>, EMOCLESU <GO>, EMCOTEAS <GO>, UMOCLAWY <GO>, and UMOCPARA <GO>.

If you’re reading this on the Bloomberg Terminal, please run BLAW OUT <GO> in order to access the hyperlinked content or click here to view the web version of this article.