The private sector, legal services industry in the United States has not recovered since the recession that began in late 2007 as many other professional service sector industries have. While annual industry revenue for the legal services sector is up, it is not keeping pace with inflation. In fact, the industry has been declining as a percent of the economy almost steadily since the turn of the century. The graph we present here shows the industry from 1987 through 2011 in terms of real value added, thus adjusted for inflation.
Industry value added is defined by the Bureau of Economic Analysis as “…the contribution of a private industry or government sector to overall GDP. The components of value added consist of compensation of employees, taxes on production and imports less subsidies, and gross operating surplus. Value added equals the difference between an industry’s gross output (consisting of sales or receipts and other operating income, commodity taxes, and inventory change) and the cost of its intermediate inputs (including energy, raw materials, semi-finished goods, and services that are purchased from all sources).”
Today’s market size is the estimated revenue collected by private sector legal services firms in the United States in 2012. This industry is identified within the North American Industrial Classification System with the code 541100.
Geographic reference: United States
Year: 2012
Market size: $270.567 billion
Source: Matt Leichter, “U.S. Legal Sector Contracting Even As Nation’s Economy Recovers,” The AM Law Daily, March 6, 2013, available online here and “Table 1 – Selected Services Estimated Quarterly Revenue for Employer Firms Fourth Quarter 2003 Through Fourth Quarter 2012,” part of the “Annual Benchmark Report for Services,” a U.S. Census Bureau series of reports available at the site here. The data presented in our chart come from the Bureau of Economic Analysis website here.
Original source: U.S. Department of Commerce, Bureau of Economic Analysis and Census Bureau
Posted on March 18, 2013