2023 Bright Insight: The 2023 National Legal Sector Benchmark Survey Results

Employment Status of 2022 Law Graduates in the United States as of April 2023

(down 3.0% in 2020) while professional and business services firms more broadly declined by 3.3% in 2020 and total nonfarm employment was down 6.1%. The recovery, while strong by legal sector standards, has also been more muted than other sectors. Even so, total employment is up 18,000 in the past year, most of which is due to attorney headcount growth. Competition for top lawyer talent will not only be fierce among law firms, but will continue to come from corporate legal departments and government agencies; nearly half of 2022 law graduates ended up in jobs outside of law firms.

layoff announcements. Industry-wide law firm employment continued to grow in the first quarter of 2023 but the growth rate was down a third from 2021 peaks. Law office job growth was up 2.6% YoY in 2021 but then receded to 1.8% in 2022, and was 1.7% annualized in Q1 2023. This current growth rate is down but remains three times higher than the historical average dating back to 1990 (0.6% per year). 6 Legal sector employment is typically more stable than other parts of the U.S. economy. Accordingly, losses were lower among law firms during the height of the pandemic

Other (e.g., Solo practitioners, education, etc.) 11%

Public interest 8%

Business & industry 9%

Law firm positions 52%

Clerkships 9%

Government 10%

Source: American Bar Association

Employment Growth, Annualized

Nonfarm Payroll Office of Lawyers

Prof. & Business Srvcs.

• Law firm growth—legal activity, attorney headcount, revenue—exploded in 2021, but growth rates are moderating. That said, the current trajectory remains above long term historical averages. • Larger firms are more optimistic about revenue growth in 2023 than firms outside of the Am Law 200 or with fewer than 100 attorneys. Am Law 100 firms are forecasted to have double-digit revenue growth this year. • Similar to other sectors, job cuts and reduced compensation packages may occur in 2023 until activity—particularly transactional legal services—begins to pick up again. • Cost pressures will be top of mind for law firms, which may impact office real estate decisions. TAKEAWAYS

0% 2% 4% 6% 8%

1.7%

-8% -6% -4% -2%

2017 2018 2019 2020 2021 2022 2023 Q1

Source: U.S. Bureau of Labor Statistics

6 U.S. Bureau of Labor Statistics

THE 2023 NATIONAL LEGAL SECTOR BENCHMARK SURVEY RESULTS | 7