NH LEGAL MARKET: The Elephant in the Room Is Gray
By Dennis Delay and Dan Wise
The complete survey reports are now available online.
The graying of New Hampshire, probably more than any other local factor, will affect the demand for legal services in the state in the coming decade.
From 2015 to 2025, the number of New Hampshire residents aged 65 to 75 will double, while the number of New Hampshire residents ages 35 to 64 will stay largely unchanged. This demographic trend is happening nationwide, but it is more pronounced in the Granite State.
New Hampshire has the fourth-oldest median age in the country and thus a higher ratio of seniors to total population than is typical among the 50 states. Seniors now represent 14 percent of the state's population, a ratio that is expected to double in the coming decades.
This is not due to migration of retirees into New Hampshire, but instead can be traced to the Baby Boomers who moved to the state in previous decades and who are staying here. How will this affect the New Hampshire economy and, in turn, the kind of work New Hampshire lawyers will be asked to do?
Estate Planning and Related Services
|Legal Services Jobs as a Proportion of Total Jobs by Location
||No. of Firms/Law Offices
||No. of Legal Services Jobs
Estate planning is likely to be a growth business in New Hampshire in the coming years. In addition to the demographic trend, recent changes in trust laws have made it more attractive to establish certain types of trusts in New Hampshire.
Even lawyers who are not concentrating on trust and probate law may benefit from the graying of New Hampshire. General practice lawyers often form long-term relationships with clients, perhaps starting with messy "moment-in-time issues" (divorce, business merger, etc.). They may see those relationships extend into assisting with retirement and estate planning for the client.
Looking at vital statistics, New Hampshire deaths have increased as the New Hampshire population grows older. In the early 1990's about 8,500 New Hampshire residents died each year, but that number increased to almost 11,000 per year by 2013.
Seniors will occupy a growing proportion of the state's housing units. Seniors now fill one in five of the state's occupied housing units. This is projected to grow to one in three by 2025. The number of senior households in the state, both owners and renters, will nearly double by 2025.
Looking at other statistics relating to an aging population, New Hampshire hospital admissions have increased consistent with an aging population that demands more medical services. Hospital admissions averaged under 110,000 per year in the 1990's, but have increased to about 120,000 per year in the last decade. Consistent with the national picture, health care is a growing industry in the state.
The downside of the graying trend, however, may dampen demand for certain types of law practice, however. For example, arrests for driving under the influence (DUI) have been declining for years, likely due to the aging of New Hampshire's population. Teenagers and young adults are 10 times more likely than middle-aged adults to be arrested for public nuisance crimes like intoxication.
Don't write off criminal law, however. The New Hampshire crime rate, which includes the property and violent crimes tracked by the FBI, after dropping to a low of 2,000 crimes per 100,000 residents in 2005, is picking up again.
The New Hampshire crime rate climbed to a high of 2,700 crimes per 100,000 in 2011. Some of this increase may have to do with reporting changes, and since 2011, the New Hampshire crime rate has dropped again, to just under 2,400 in 2013.
Another measure of crime – criminal arrests – rose to almost 50,000 per year in 2009, but since then has declined slightly in 2013, to about 45,000 per year. Anecdotally, it appears the economic recession has led to an increase in financial fraud cases, from Ponzi schemes to theft by deception, to securities violations, to simple theft.
Divorce and family law, as measured by court filings, may appear to be a growing area, but the actual number of marriages and divorces is declining. After peaking at 6,000 divorce filings in New Hampshire in 2000, there were only 4,000 divorces in 2012. In the next decade, the age composition of New Hampshire – with more elderly and very young and fewer in the middle age groups where divorce or breakups are most likely to occur – could indicate some contraction of demand may be expected.
The New York Times, in a December 2014 article, reported on the overall decline in divorce rates nationally, noting that "Some of the decline in divorce clearly stems from the fact that fewer people are getting married — and some of the biggest declines in marriage have come among groups at risk of divorce. But it also seems to be the case that marriages have gotten more stable, as people are marrying later."
Increasingly, attorneys are promoting collaborative law or the use of alternative dispute resolution methods as an alternative to divorce litigation, which may remove elements of the practice from appearing in official statistics.
Other Practice Areas
On the other end of the age spectrum, New Hampshire is becoming more racially and ethnically diverse, a trend highlighted in a 2012 report by the University of New Hampshire's Carsey Institute.
In "New Hampshire Demographic Trends in the 21st Century," demographic expert Kenneth Johnson, noted: "New Hampshire is and will likely remain a largely white, non-Hispanic state, but minorities accounted for a disproportionate share of the population increase during the past decade," adding that this diversity is growing the fastest among the state's youngest residents.
Over the past few years, however, there has been a net migration loss of young adults in their 20s, the generation that is key to many economic growth-drivers related to the formation of new households, growing families, and business formation and expansion.
While these households do not have a lot of disposable income, their legal needs will emerge. Attorneys who can identify themselves as being well-positioned to represent a particular niche – same-sex couples or a particular ethnic group, for example – may gain an advantage in building their client base, especially given the more rapid growth of minorities in the southern tier.
Apart from the impact of demographics, growth prospects in particular practice areas, especially in business law, are affected by economic cycles and potentially by legislative changes. Bankruptcies soared as the economy tanked in the last decade, but personal bankruptcies shrank with changes to the bankruptcy code. Today, the number of filings, business and consumer, continues to slide. More than 5,600 bankruptcy petitions were filed in New Hampshire in 2010, falling to less than 3,000 in 2014.
The state's Real Estate Transfer Tax, another barometer of economic activity in a major law practice area in the state, fell from more than $160 million collected per year from 2006 down to the low $80 million- a-year range through most of the recession. Last year, it climbed to $100 million.
Economic growth will not last indefinitely. Although recessions are difficult to predict, economic history has shown that an economic downturn will happen eventually. Issues such as liquidation of assets, sale to a third party, and adversarial issues surrounding bankruptcy will become important in the future, when the next recession hits.
The UNH/Carsey Institute study, along with employment statistics, may provide additional insight as to where potential exists for creating or expanding a law practice. For example, while it is no secret that New Hampshire is a largely rural state, and that incomes are lower in the less urban counties, population is slowly growing due to in-migration in some rural counties, in part due to an influx of retirees.
Some growth potential may exist, for example, in communities where there are no lawyers or the lawyers there will soon retire.
Chart AA shows the number of legal services firms (units), employment, and average weekly wage for the major labor markets in New Hampshire, along with total private and government data. In the table, the "Jobs LQ" is a location quotient, equal to the percent of legal services jobs in the labor market, compared to the state average.
Thus, legal services account for 1.3 percent of the jobs in the Concord labor market area. Since the state average is 0.7 percent, both Concord and Manchester have the heaviest concentrations of legal jobs compared to the population. By comparison Berlin, Franklin and Plymouth have the lowest concentrations of legal services.