Challenges in the Legal Industry February 1st, 2013
Lawyers are not always ethical or respectable people. They are often the butt of jokes. For instance, it was so cold last week I saw a lawyer with his hands in his own pockets. Or, the classic: How can you tell when a lawyer is lying? His lips are moving… Many people envision lawyers as soulless, bloodsucking leeches bent on distorting the law for their own personal or financial gain. To others, the legal profession is an admirable one. Let’s not forget, Thomas Jefferson, Abraham Lincoln, and Mohandas Gandhi were lawyers. In general, the position comes with power and sizeable compensation. That is one reason many aspire to become defenders of the law, despite the social stigma attached to the profession. Unfortunately for these aspiring lawyers, the legal job market in the near future appears to be a brutal one.
The Federal Bureau of Labor predicts the legal job market to increase by 10% between 2010 and 2020. That means an addition of about 73,600 legal jobs over the decade. A 10% increase may sound like a lot, but keep in mind that the country is moving out of a recession and into a period of economic growth. The average growth rate for all occupations between 2010 and 2020 is predicted to be 14%. More people graduate from law school each year than there are legal jobs available. Competition for these positions is becoming higher and higher.
More than 40,000 students receive law degrees and enter the job market every year. This is much greater than the combination of legal professionals leaving the market and new legal positions opening. Only 55% of 2011 law school graduates landed full-time, long-term jobs that required law degrees within 9 months of graduating. From the class of 2010, 68% landed similar jobs nine months after graduation. Only about 8% of 2011 law school graduates landed full-time, long-term jobs at firms with over 250 attorneys.
A law degree should be considered a long-term investment. Most law firms will not even interview a graduate until he or she has become licensed. In some states it could take 5 or 6 months to receive bar exam results. Also, graduates of lower-tier law schools have a much harder time landing interviews for jobs that require a law degree. In 2011, 87 lower-tier schools had placement rates of 50% or less.
It’s becoming more difficult to move up the ladder in the legal industry. Just finding a job after graduating and passing the bar exam is becoming more of a challenge. But, for those who beat out the competition, the rewards are substantial. In 2010 the median pay for a legal professional in the US was $112,760 per year and $54.21 per hour. In his or her first three years a paralegal can expect to make about $30,000 a year while a firm associate can expect about $90,000 a year. Become a corporate lawyer and the money will really start piling in. The legal services industry is a $250 billion business with $100 billion coming from corporate legal counsel. The best way to beat out the competition is to be open to relocation. Many professional lawyers are not willing to relocate to a new state, as this requires re-licensing. There is usually high demand for lawyers in high-growth urban areas. Also, regardless of the state of the national economy, federal and state governments need lawyers for prosecution and revenue collection.
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