Law360 (April 3, 2020, 6:16 PM EDT) — Employment in the legal industry dropped downward in March from a 10-year high in February, giving up the gains seen during the previous month as firms stare ahead at the potential impact of the novel coronavirus, according to U.S. Department of Labor data released Friday.
The number of legal sector jobs decreased from about 1,162,600 in February to 1,160,500, a decrease of nearly 0.15%, based on the seasonally adjusted numbers from the Bureau of Labor Statistics. It follows a period of increases in four of the previous five months, according to the data.
The larger category of professional and technical services, which includes the legal industry, gained a seasonally adjusted 255,400 jobs since last March, a nearly 2.7% increase for the period. From February to March, the sector gained approximately 6,500 jobs, according to the Bureau of Labor Statistics.
The March job numbers come as law firms are only beginning to announce layoffs, furloughs, cuts in pay and other measures to reduce costs as the economic upheaval caused by the spread of COVID-19 begins to impact the industry.
Among the announcements in recent days, Baker Donelson Bearman Caldwell & Berkowitz PC said it would cut pay and furlough some employees, Loeb & Loeb LLP announced it would slash attorney and staff pay to avoid layoffs, Pryor Cashman LLP said it would furlough some associates, Cadwalader Wickersham & Taft LLP announced it was pausing partner distributions and cutting associate and staff pay, and Reed Smith LLP said it would slow partner cash distributions.
The reports on cost-cutting measures taken by midsize and large law firms will likely flood in as firms realize the gravity of the economic downturn caused by the COVID-19 pandemic, Larry Watanabe of legal recruiting firm Watanabe Schwartz told Law360 late last month.
No law firm wants to be the first to cut staff or hold off on partner draws, but as is common in the industry, once a few major firms make a move, others will likely follow, Watanabe said.
“I think we’re beginning to see the tip of the iceberg,” he said. “Firms can only be patient for so long, but the forecast is murky and the news is so negative firms have said, ‘We’re not going to keep waiting because this might not get better for months.'”
–Additional reporting by Aebra Coe and Emma Cueto. Editing by Jay Jackson Jr.