Let’s face it; by the end of 2020, there will be fewer law firms than there were at the beginning of 2020. Law firms everywhere are failing, and unfortunately, no firm is immune to this.

And the decrease in firms and legal industry employment is only going to accelerate in the coming years.

Those who pay attention and make the necessary changes will do just fine, but the firms that can’t adapt?

Well, they’ll likely be looking like this in the near future:

closed sign

So let’s try and avoid that scenario.

And to do that, we’ll need to understand precisely why law firms are failing in the first place, which is what we’re covering today.

See, back in June of 2015, I first wrote on the struggles of the legal profession. That article briefly discussed the increasing number of lawyers in the face of decreasing work for those lawyers. In that article, I predicted that things were going to get worse.

Well, it turns out those trends have gotten worse. So let’s dive into a deeper level of specifics than what I discussed in 2015, regarding where we are today.

Why Attorneys Are Seeing a Reduction in Business Income

At the time of my 2015 article, the US legal services sector employed 1,122,100 people. As of January 2017, the industry is employing 1.107,600 people. So, with a decrease in employees, you’d expect a reduction in lawyers as well, right?

Wrong.

Since 2015, the number of lawyers has increased by over 28,000. This mismatch results in the amount of work to perform, per lawyer, taking a nosedive.

crashing trend

Get ready to see a lot more lawyers looking like this:

attorney with sign

This begs the question:

Why are we adding so many attorneys if the demand for them isn’t increasing at the same rate? Part of the reason is that since 2007, we’ve gone from 195 accredited law schools in the country to 204.

The bottom line is that we’ve got more attorneys than ever before, more law schools than ever before, and fewer jobs. So let’s look at why that might be.

The Demand for Legal Services is Declining

The reasons for the increasing attorney population are simple – we’re still at our peak number of law schools, and plenty of people enroll out of the belief that a law degree is an easy ticket to wealth.

And here’s where the mismatch comes in.

Despite the increasing amount of attorneys, the demand for those attorneys is decreasing due to various factors:

The first of those factors may surprise you. If you tune in to the news or check social media at all, you may think that crime is out of control in the US, right?

Nope.

In 1995 there were 15,119,800 people arrested in the US. In 2015, however, there were only 10,797,088 people detained in our country. So over twenty years, the number of arrests has dropped by five million per year (even though we’ve seen a population increase of roughly 58 million). 

Arrests in the US have consistently been going down for years. And each one of those arrests represents work for a defense attorney and a prosecutor. There are now five million fewer cases, per year, for each of those lawyers.

Another cause for the decrease in demand for legal services is increased automotive safety. 

(Please note that I fully recognize that this is a good thing for society; this article is simply to discuss the supply and demand for legal services, not whether it’s good or bad.)

Improved safety features such as anti-lock breaks, and others, have been making cars safer for years. The result of this? From 1995 to 2015, the number of US drivers who died in auto accidents decreased from 41,817 to 35,092. Again, this decrease is despite the fact that the population is much larger, meaning more people are on the road.

This improved auto safety reduces the work available for personal injury attorneys and insurance defense lawyers alike.

And the third reason for the decline in demand: America’s falling marriage rate.

In 1995, the average age of one’s first marriage was 26.9 years for men and 24.5 years for females. By 2009, those ages had increased to 28 for men and 26 for women. 

Waiting longer to get married means people will file for divorce at a later time too. This reduces work for family law attorneys. The result of this is a 9.7 percent increase in married couples, while the population grew by 22 percent in the same time frame.

Which, again, means less work for family law attorneys.

So, from 1995 to 2015, the number of people getting arrested dropped by nearly 1/3. The number of traffic fatalities dropped substantially. And marriage rates are declining, which, in turn, means less work for divorce attorneys too. 

Would you like to know what else happened by 1995 and 2015? 

The number of attorneys in the US increased by roughly 47 percent. It’s no wonder why more and more firms are struggling, and lawyer incomes are on the downtrend.

And that’s our industry in a nutshell right now. The trend doesn’t seem to be going anywhere, either, it seems it’s just the tip of the iceberg. 

Things are about to get a lot worse, friends. But the attorneys who prepare will be able to weather the storm.

In my next article, we’ll be discussing how cultural changes will significantly decrease the demand for legal services, from current levels, in 2020 and beyond.

One way you can prepare your firm? Investing in your content. Check out our guide on SEO for lawyers here.