Industry Outlook

Employment for lawyers is expected to grow by 6 percent through 2028, according to the Occupational Outlook Handbook (OOH), but a growing number of law firm mergers and closures, competition from nontraditional providers of legal services, and other factors have created strong competition for top jobs. According to Robert Half Legal, a national staffing firm, “competition remains tough when recruiting attorneys with specialized litigation experience. Other hot practice areas include general business and commercial law, real estate, trusts and estates, compliance, and data privacy and information law. Among industry sectors, our recruiters report particularly strong demand for associates with technology, financial services, and energy experience.”

The strategic management and marketing consulting firm Robert Denney Associates publishes an annual report titled “What’s Hot and What’s Not in the Legal Profession.” In its December 2017 report (the most recent that is available), it categorized the following specialties as “red hot”: cybersecurity, health care, and immigration. “Hot” law practice areas included bitcoins, elder law, financial services, food and beverage, real estate/construction, and sports. Areas such as “other sports, including esports and gaming” were classified as "getting hot."

Employment growth also varies by industry. The U.S. Department of Labor (DOL) predicts strong employment growth for lawyers in the following industries through 2028:

  • funds, trusts, and other financial vehicles: +48.5 percent
  • retail trade: +46.0 percent
  • computer systems design and related services: +40.5 percent
  • management, scientific, and technical consulting: +37.3 percent
  • software publishers: +34.4 percent
  • private colleges, universities, and professional schools: +28.6 percent
  • health care and social assistance: +26.9 percent
  • construction: +26.5 percent
  • real estate: +23.0 percent
  • securities, commodity contracts, and other financial investments and related activities: +18.5 percent
  • finance and insurance: +18.3 percent

The DOL predicts that employment for lawyers is expected to decline in the following industries through 2028:

  • newspaper, periodical, book, and directory publishers: -4.9 percent
  • cable and other subscription programming: -6.6 percent
  • Postal Service: -9.4 percent
  • telecommunications: -12.3 percent
  • communications equipment manufacturing: -16.6 percent

Law firms continue to lose market share to nontraditional providers of legal services (e.g., accounting firms, legal staffing consulting firms, etc.). “Many law firms in all segments of the market have already begun to respond to these market changes, some quite aggressively and in innovative ways,” according to the 2020 Report on the State of the Legal Market. “But moving toward an integrated solutions model for most firms will not be easy. For some, there will be challenges of scale, as they seek to develop the footprints needed to meet their clients’ requirements. For others, identifying, hiring, and retaining talent (non-legal professionals as well as legal) will be particularly challenging.”

The top 10 percent of the graduating seniors of the country’s best law schools will have many opportunities with well-known law firms and jobs on legal staffs of corporations, in government agencies, and in law schools in the next few decades. Lawyers in solo practice will find it hard to earn a living until their practices are fully established. The best opportunities exist in small towns or suburbs of large cities, where there is less competition and new lawyers can meet potential clients more easily.

Graduates with lower class rankings and from lesser-known law schools may have difficulty in obtaining the most desirable positions—or even finding jobs in the field. The overall employment rate for the law class of 2017 was 88.6 percent, according to the National Association for Law Placement (NALP). But only 78.6 percent of the graduating law class of 2018 from American Bar Association (ABA)-approved law schools landed a job roughly 10 months after graduation for which passing the bar was a requirement, according to the ABA, up from 75.3 percent of graduates from the class of 2017. The fact that more than 21 percent of 2018 graduates could not land a job commensurate with their education suggests that it’s becoming harder for new graduates to land a full-time position in the legal industry—due in part to the economic recession, legal industry consolidation, and the outsourcing of basic legal duties to workers in foreign countries.

Starting salary rates for new law school graduates have grown more slowly in recent years in most settings. New graduates from the class of 2018 received median starting salaries of $70,000, according to the NALP—up from $64,800 in 2015. One-third of new graduates earned more than $100,000, but half of reported salaries were $70,000 or less.

The employment outlook for others in the legal industry varies by profession. Lawyers who want to become judges will face stiff competition. Employment for judges is expected to grow by 3 percent (more slowly than the average for all careers) through 2028. The DOL reports that “budgetary constraints in federal, state, and local governments may limit the ability of these governments to fill vacant judge and hearing officer positions or authorize new ones. Most job openings will arise as a result of judges and hearing officers leaving the occupation because of retirement, to teach, or because their elected term is over.” Demographic shifts in the U.S. population may prompt demand for judges in certain geographic areas with increasing populations. In addition, more judges may eventually be needed to handle matters involving immigration, bankruptcy, and elder law.

Employment for paralegals and legal assistants is expected to grow by 12 percent (much faster than the average) through 2028, according to the DOL. These workers will continue to find employment in private law firms (as these law firms try to increase the efficiency of legal services and reduce costs), but there will be increasing opportunities with corporate legal departments, insurance companies, real estate and title insurance firms, and banks. Paralegals with strong computer and database management skills and who graduate from well-respected paralegal training programs and/or those with previous experience (in other words, a quality internship) will find the best jobs.

Regardless of an overall positive outlook for long-term business growth, the COVID-19 pandemic, which began in Wuhan, China, and quickly spread around the globe in 2020, created a tremendous amount of economic uncertainty as many events were canceled, businesses closed, and world travel declined. The ABA Journal reported that more than 80 percent of law firms saw a drop in business by May 2020 and more than 60 percent of firms predicted recovery could take up to a year. At the same time, many firms reported a rise in new business in areas affected by the fallout from the pandemic, such as bankruptcy, labor, and unemployment. An article by McKinsey & Company noted that law firms weather economic downturns better than the overall economy, but that the COVID-19 disruption was unprecedented and unpredictable. 

The rollout of the vaccine in 2021 will help the economy rebound as businesses reopen. The changes many law firms made during the pandemic are expected to continue after the pandemic is contained. A report by Thomson Reuters indicated that large law firms were able to adapt to the disruptions caused by the pandemic, and that most law firms are "generally optimistic in their outlook for 2021 and fairly bullish on their three-year outlook." The legal industry learned many lessons during the pandemic that may carry forward in the years to come, for example, the success of teleworking; partners' acceptance of technology's role in improving legal service delivery while reducing costs; changes in operations, such as staffing, work patterns, and use of office space; collaborating with alternative legal service providers; increased focus on work-life balance, including employees' physical and mental wellness.

As of January 2021, there were 446,850 law firms in the U.S., with nearly 1.33 million employees. According to the research group IBISWorld, law firms will have growth in revenue through 2026 as the economy continues to grow and corporate profit increases. The largest law firms will have strong revenue growth in this time frame due to a projected increase in mergers and acquisitions and initial public offerings.