Tuesday, September 4, 2012

Labor and employment law is hot practice area right now

It's one of the few growth areas for BigLaw right now according to the results of a recent Hildebrandt study as reported by the Washington Post.

Influx of employment lawsuits, regulations a bright spot for law firms

Companies’ demand for legal services is falling in nearly all areas of the law except labor and employment — the lone area where the fallout of the recession appears to be helping rather than hurting large law firms.

While demand for corporate-, real estate- and bankruptcy-related work all dropped 2 to 3 percent, labor and employment work rose nearly 5 percent during the second quarter of 2012 compared with the second quarter of 2011, according to a survey of the nation’s 135 largest law firms by the Hildebrandt Institute’s Peer Monitor Index, a unit of Thomson Reuters. Demand for legal services in the Washington market dropped 2 percent, compared to 0.2 percent nationally.

Although labor and employment work represents a relatively small chunk of the legal market — 8 percent, compared to litigation (33 percent) and corporate (23 percent) — it is the only practice area that has consistently posted growing demand for the past 18 months.

Unlike mergers and acquisitions and other corporate work that tapers off during an economic downturn, employment law tends to be countercyclical. Lingering high unemployment pushes many laid-off workers to sue their former bosses over workplace-related claims — and that means more business for law firms that represent companies.

“In most jurisdictions, employment is at will,” said Constantinos Panagopoulos, a partner at Ballard Spahr. “You can be let go for any reason, or no reason, so the only remedy most employees have is to make a claim of employment discrimination. That’s why you’re seeing a broader uptick in that area. That results in more lawyers being hired to defend those lawsuits.”

Legal action against companies over unpaid wages and alleged employment discrimination surged during the recession, and continues to climb. Charges of workplace discrimination hit an all-time high of nearly 100,000 in 2011, the Equal Employment Opportunity Commission found.

Similarly, the 12 months ending in March saw a record number of complaints filed under the Fair Labor Standards Act, the federal law that requires employers to pay minimum wage and overtime to workers, according to data compiled by the law firm Seyfarth Shaw. About 7,000 FLSA lawsuits were filed against employers during that period — more than triple the number from a decade ago.

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