Bar News - January 21, 2015
The NHBA Economics of Law Survey
By: Dan Wise
Results Show Slow Legal Market Growth, but High Job Satisfaction
As the economy nationally and in New Hampshire slowly ticks upward, expectations for an improving legal services market are also growing among New Hampshire Bar members, according to a recent survey.
The survey, distributed in November via email to New Hampshire lawyers by an independent research firm on behalf of the Bar Association, found that slightly more than half of the respondents in decision-making positions indicated that they expect to increase billing rates in 2015. Hiring is still slow, with only 34 percent saying they were likely or very likely to make new hires this year.
While optimism is guarded, true pessimists were very rare: Less than 5 percent were considering lawyer layoffs or lowering their billing rates.
Of the nearly 800 survey respondents, 43 percent were private firm members, 27 percent were solo practitioners, 12 percent were in-house counsel, and 18 percent were government attorneys. (The composition of respondents by firm size, geographic distribution and level of experience resembles characteristics of in-state Bar membership, with the exception that Bar members with less experience were slightly overrepresented compared to the overall membership.)
The median billing rate reported for New Hampshire attorneys in 2014 was $225, up 28 percent from the $175 billing-hour rate reported in a 2005 New Hampshire Bar Association survey. The median varied for different parts of the state, with Hillsborough and Rockingham counties coming in at $250 per hour, the “middle counties” of Belknap, Cheshire, Merrimack and Strafford at $225, and the least populated counties (Carroll, Coos, Grafton and Sullivan) at $200 per hour.
Remarkably, the median net income for NH Bar members has hardly changed over the past 10 years, with men reporting a median salary of $104,000 in 2013, compared with about $100,000 in 2004, according to New Hampshire Bar survey asking similar questions. With compensation for male lawyers remaining stagnant, the gender gap has closed a bit, with median net incomes for female attorneys in private practice rising from barely $60,000 in 2004 to $81,000 in 2013.
According to US Department of Labor, the median annual wage for lawyers nationally was $113,530 in May 2012.
In remarks for Business NH Magazine’s 2015 Industry Forecast on Jan. 21, Richard Samuels, managing director of the McLane law firm, quoted NH Department of Labor statistics that predict the number of lawyers employed in NH will grow less than 5 percent in the next 10 years, while the ranks of paralegals and legal assistants will grow 11 percent. Clients exerting pressure on “cost, speed, and effectiveness in the delivery of services will require increases in efficiency, continued investment in and more effective use of technology, and smaller price increases than occurred in the past,” Samuels noted.
According to the NH Bar survey, it appears that NH lawyers are happy practicing law here, with 81 percent of the respondents indicating they derived “enough” or “a great deal” of satisfaction from their legal careers.
A dark debt cloud looms, however. For private practitioners with debt, the average remaining debt is $81,849, and the median education loan debt level (of those with debt) is $66,000. The median monthly payment is $500. But one-quarter of the attorneys in the survey responded that they owe an average of $115,000, and have monthly obligations of about $875.
The survey also confirms that, despite its shrinking, the gender pay gap persists, with median income (2013) exceeding $110,000 for male attorneys in private practice full-time while income for females in full-time private practice was $90,000.
The complete results of the survey are being prepared for release online next month and a Bar News supplement will be published in the March issue, providing additional content.
The survey report will provide information on current patterns and anticipated use of different methods for billing clients, hardware and software usage trends, and what tools or techniques New Hampshire lawyers use to find and communicate with clients.
Also in the works is a free, non-credit discussion of the findings along with guidance and advice on better law office management, to be held this spring. Panelists will include Arthur Greene, a New Hampshire Bar member and practice management consultant who helped oversee past NH Bar economic surveys; and Dennis Delay, a local economist who has consulted before with the NHBA.
“Collecting, analyzing and reporting this information is an important service for our members,” said Jeannine McCoy, NHBA executive director. “It provides an ongoing resource for lawyers and firms to use to better manage their firms and offices.”