Monday, May 18, 2020

Legal occupations prove resilient during COVID shutdowns (Michael Simkovic)

International efforts to slow the spread of coronavirus have come at heavy economic cost.  According to figures recently released by the Department of Labor, Bureau of Labor Statistics, U.S. national unemployment rates have spiked from less than 5 percent to more than 14 percent as of April 2020, reaching the highest level since the Great Depression. 

Unemployment has increased the most for those working in food preparation and personal care occupations, where working remotely is less feasible.  For such workers, unemployment rates are now close to 40 percent.  In contrast, those in professional and related occupations have fared relatively well, with unemployment averaging below 9 percent. 

Legal occupations have proved remarkably resilient and currently have the lowest unemployment rate of any category tracked by the BLS.  Unemployment for legal occupations reached only 3.7 percent in April of 2020.  Unemployment rates for lawyers are likely even lower because legal occupations include lawyers as well as occupations that typically have significantly higher unemployment rates than lawyers, such as paralegals and other legal support workers.  In the first quarter of 2020, these non-lawyer legal occupations had unemployment rates around 2.3 to 2.5 percent, compared to 1.1. percent for lawyers.  To be clear, unemployment has increased in legal occupations—just not by as much as it has increased everywhere else.

Law may be resilient in part because electronic filing, electronic legal research resources, home computers, and telecommunications technology make it is easy for lawyers to work remotely, and in part because the COVID shutdowns are leading to additional work for lawyers in areas like restructuring, secured lending, and employment law.  Legal services may also be helpful for navigating recent relief legislation that seeks to provide federal assistance to businesses and other institutions.

In the 2008 to 2009 recession, law was also relatively resilient, but healthcare was the most stable sector.  The current downturn, however, is having a devastating effect on the finances of the healthcare sector.

Guest Blogger: Michael Simkovic | Permalink