INSIGHTS
- There is a growth trend in the legal services industry in terms of demand for certain legal expertise, and spending.
OVERVIEW
The short version is that studies confirm that there is a growth trend in terms of spending and demand in legal services with increased demand for certain legal expertise. Employment growth projections indicate that the industry will enjoy growth by 2022 but 2023 and 2024 estimates indicate a slowdown. Below you will find a deep dive of my findings.
METHODOLOGY
The research, first, focused on understanding the context of growth in the legal services. Only US figures are currently available in terms of growth in this industry and the numbers are limited to employment growth. Nevertheless, this is still a viable data as employment growth is heavily tied to the industries that provide employment opportunities. This data came from the United States Department of Labor — Bureau of Labor Statistics or BLS which conducts studies based from many factors, including new job demands, replacement job needs, and education, among others. The limitation of this source is that their projections are released bi-annually which means that the numbers for 2023 will have to be estimated from 2022 to 2024 data.
OVERVIEW
In 2016, Deloitte conducted a research study about future trends in the legal services industry. The research consisted of 243 web-based surveys and 30 long-form qualitative interviews. The respondents were those with influence or responsibility in legal purchasing or any relevant professional services within their respective organizations which include General and Legal Counsels, CEOs, CFOs or another management executive role. They all came from large multi-national and mid-sized companies that have a presence in five or more locations and are operating in different major industries and were split by company headquarters as follows: UK (27%), North America (25%), Asia-Pacific (24%), Europe (21%, excluding UK) and Africa and the Middle East (3%).
The study indicates that the legal services industry is growing in terms of spending and demand. Spending is focused on regulatory compliance (49%), mergers and acquisitions (42%) and litigation (39%). 26% of respondents see global compliance is an issue for in-house lawyers and 44% thinks they are doing more with less. 52% think that technology will start performing tasks done by in-house lawyers over the next five years, which will likely account for the creation of new jobs in the industry. Of legal services currently not delivered by existing firms, industry, commercial and non-legal expertise is desired the most. And 52% of in-house legal departments are considering buying legal services from non-traditional law firms.
MARKET GROWTH IN 2022
There is an expected demand increase in Paralegals and legal assistants according to BLS as they will start handling more job responsibilities previously assigned to legal support staff. Together with lawyers, they will account for more than 9 of 10 of the projected new jobs among legal occupations. 74,800 more lawyers and 46,000 more paralegals and legal assistants will be added respectively by 2022. Nearly two-thirds of jobs in legal occupations in 2022 are projected to be in occupations that require higher education. The numbers are as follows:
Numeric change: 1,379,900 - 1,247,000 = 132,900
Percent change(2012 - 2022): (132,900/1,247,000) x100 = 10.7%
MARKET GROWTH IN 2024
Most new jobs in 2024 will be lawyers at 43,800 while the fastest growth will be coming from arbitrators, mediators and conciliators at 9.2% due to the projected high cost associated with bringing civil court cases to trial. For this year, the study shows that by comparing 5.1% growth in legal services employment between 2014 and 2024 and that of 2012 and 2022, there will be a slight slow-down in the market. Projected legal jobs will reduce by 47,100 between 2022 and 2024
Numeric change: 1,332,800 - 1,263,200 = 64,600
Percent change(2014 - 2024): (69,600/1,268,200) x100 = 5.1%
ESTIMATED MARKET GROWTH IN 2023
In the absence of a similar set of data for 2023, we can use 2022's and 2024's data to estimate 2013 jobs and projected jobs in 2023.
Jobs in 2012: 1,247,000
Jobs in 2014: 1,268,200
Jobs in 2013 (by average): (1,247,000+1,268,200) /2 = 1,257,200
Projected jobs in 2022: 1,379,900
Projected jobs in 2024: 1,332,800
Projected jobs in 2023 (by average): 1,356,350
Average change: 1,356,350 - 1,257,200 = 99,150
Estimated Percentage change: (99,150/1,257,200) x100 = 7.9%
This indicates that by comparing 2012-2022 and 2013-2023 growth rates, a slow-down can be projected. And plotting the growth rates from 2022 to 2024, it will show a downward trend.
SUMMARY
Based on the research and findings above, studies confirm that there is a growth trend in terms of spending and demand in legal services with increased demand for certain legal expertise. Employment growth projections indicate that the industry will enjoy growth by 2022 but 2023 and 2024 estimates indicate a slowdown. Thank you for using Wonder. Please let us know if we can help you with anything else.