Legal industry is economic force
Leaders of law firms have long argued that the legal industry has a huge - and often underappreciated - economic impact on Philadelphia. Now they have the data to back up that claim.
Leaders of law firms have long argued that the legal industry has a huge - and often underappreciated - economic impact on Philadelphia. Now they have the data to back up that claim.
A report commissioned by the Philadelphia Bar Association concludes the legal-services industry, from law firms to e-discovery consultants, to court reporters and everything in between, contributes $5 billion annually to the city's economy. The report by the Center City economic and policy consulting firm Econsult Solutions Inc. says the industry is responsible for more than 31,400 jobs. Total tax revenues to the city are $160 million.
"This report is the first of its kind to highlight the economic impact of the profession to the region," said Kathleen Wilkinson, chancellor of the Philadelphia Bar Association. "All of these people work in Philadelphia. They are really contributing significantly."
Wilkinson said the bar association and its large-firm management committee hope the study will reinforce the impression with city leaders that the industry is central to the regional economy. She added that the city taxes affecting law firms can serve as a disincentive for firms to locate or expand in Philadelphia.
The report divides legal employment into four sectors. The legal industry itself employs 17,300 people, Econsult says, including lawyers, paralegals, administrative staff, and others employed directly by law firms. That category also includes legal-industry recruiters, consultants, and others working for law firms in one capacity or another. The three other categories are law schools, courts and governmental law jobs, and in-house counsel at private companies, for a total of 4,150 positions.
But the industry creates additional spin-off employment of just under 10,000 additional jobs in leasing and other real estate functions, finance and insurance, food services, education, and other categories.
Stephen Mullin, president of Econsult, said that overall employment related to the legal industry in Philadelphia accounted for about 5 percent of the city's employment base of 700,000 jobs.
The study contains one important cautionary finding, he said. Despite its large impact, direct legal-industry employment - jobs with law firms and related employers - has declined slightly in Philadelphia since 2001. Then, the industry accounted for about 20,000 jobs; now that number is about 17,300. Throughout the region, however, direct legal employment increased slightly to just under 45,000, a gain of more than 1,000.
"This industry is getting more and more competitive," Mullin said. "You can't just rest on your laurels."
