Legal Jobs Report: January 2016

An employment summary based on the U.S. Bureau of Labor Statistics’ (BLS) January 2016 monthly jobs report.

In December, the U.S. economy added 292,000 jobs and easily beat Wall Street’s expectation of 200,000. The unemployment rate held steady at 5 percent, according to the BLS’s January 8th jobs report. Additionally, the government revised upward October’s and November’s employment gains — 50,000 higher than previously reported. That means over the past three months, job gains have averaged 284,000 per month.

262,000 new jobs added in the month of December according to January jobs report

Friday’s labor report is welcome news to global stock markets, which have suffered recent selloffs due to economic concerns in China. Wage stagnation continues to affect American workers. According to BLS, average hourly wages remained unchanged at $25.34 an hour. The labor market has millions of part-time and temporary workers, and this is enabling employers to keep wages low.

Employment in legal services

According to BLS, the legal services industry created 1,200 jobs in December, a noticeable increase from previous months. Here are the number of jobs created in legal services the past four months:

  • December: +1,200
  • November: +600
  • October: +700
  • September: +4,700

Many law firms and corporate legal departments are poised to add staff in the first few months of 2016. Compliance, corporate governance, litigation, and information technology are among the drivers for this growth. But law partners and corporate managers also find it increasingly difficult to recruit or retain skilled legal professionals, and there is growing concern about losing top talent to other job opportunities.

The industry continues to seek experts with high-demand specialties, such as litigation, corporate governance, and e-discovery. The national workforce of legal professionals now amounts to over 1.12 million people, according to BLS. Since the recession, there has been about 45,000 fewer people working in the legal sector.

Non-traditional legal jobs are providing opportunities for candidates. The jobs below are estimated to grow at the following rates (between 2012 and 2022), according to BLS:

  • Information governance and security analysts: +37%
  • Paralegals and legal assistants: +17%

Evolving business model

The legal industry continue to face disruptive changes. Many firms and legal departments think their business model is being threatened by non-traditional service providers. There is growing pressure to add more value, to reduce costs, to add new services, and to provide higher quality services.

For attorneys who are starting a family, work/life balance is a key factor in considering a move to an in-house position.

Unemployment insurance

In December, jobless claims increased to its highest level since July 2015, increasing by 20,000 to 287,000 in the week ended Dec. 26, according to the Labor Department. Economists had forecasted 270,000. The number of Americans who filed for unemployment insurance had decreased by 10,000 — to 277,000 — in the week ended Jan. 2.

The official unemployment rate is pegged around 5 percent, more than a seven year low. But there are about 2.2 million people who are receiving jobless benefits. And the labor participation rate, at 62.5 percent, is at its lowest in 38 years. That means 94.6 million Americans are not in the labor force.

Overall, the Federal Reserve considers the economy to be improving. On Dec. 16, the Fed increased the target range for the federal funds rate from 0.25 percent to 0.5 percent, up from zero to 0.25 percent. It’s the first such increase in nearly a decade.

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