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November 6, 2009 9:42 AM

Legal Sector Loses 5,800 Jobs in October

Posted by Brian Baxter

According to a monthly jobs report released Friday by the U.S. Bureau of Labor Statistics, the nation lost 190,000 jobs in October as the unemployment rate jumped to 10.2 percent, its highest point since 1983.

The legal sector wasn't spared. When data is seasonally adjusted, the legal field shed another 5,800 jobs in October. When not seasonally adjusted, the legal industry actually gained 1,500 jobs, but that’s likely a result of summer associates being weaned from law firm payrolls. (Click here for the BLS report, The Employment Situation: October 2009.)

In September, seasonally adjusted BLS data showed the legal sector losing 2,000 jobs.

After flat-lining for a few months, law firm layoffs continued apace in October, with Cooley Godward Kronish getting things started by letting go of 58 staffers. That was followed by Foley & Lardner cutting 39 lawyers, Wilmer Cutler Pickering Hale and Dorr shedding 57 staff members, and Drinker Biddle & Reath letting go of 22 associates and switching to a merit-based compensation system.

Squire, Sanders & Dempsey also announced plans to let go of between 20 and 25 "timekeepers" as part of a firmwide austerity program. And according to a recent analysis by sibling publication Legal Times, New York firms operating in Washington, D.C., saw their overall head count decrease by 2.8 percent between April 2008 and April 2009.

But before associates turn their attention to bonus season--click here and here for stories on Cravath, Swaine & Moore’s bonus season kickoff--some firms haven’t finished with year-end layoffs.

On Thursday Dickstein Shapiro announced a second round of layoffs affecting 3 percent of associates and counsel-level attorneys and 10 percent of nonlawyer staff. That equates roughly to six lawyers and 47 staffers. The firm previously let go of ten associates last January.

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I hope things get better from here.

It could be just a blip, but it's noteworthy that the legal job loss was 3% of all jobs lost, but the legal work force is less than 0.8% of the overall workforce. Put differently, if law and non-law jobs were disappearing at the same rate, only about 1500 law jobs would have disappeared--about a quarter of what we lost in fact.

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