The economic landscape heading into 2025 will create a significant impact on the hiring trends within the legal industry. The economy is fluctuating between recession and recovery. As a result, law firms and corporate legal departments will respond by adjusting their hiring plans and priorities. Here are some of the key economic factors at play and how they could shape legal hiring over the next year.
Economic Growth Projections
Current projections for US economic growth indicate a slowdown is likely over the next two years. Gross domestic product (GDP) growth dropped from 2023 to 2024. However, it will rebound in 2025 according to Congressional Budget Office estimates.
Slower growth typically means reduced business activity and consumer spending overall, leading to less demand for legal services. In turn, dampened demand can restrict hiring, especially for firms focused on real estate, mergers and acquisitions, and other areas tied to economic growth cycles.
Inflation and Interest Rates
Persistently high inflation and the Federal Reserve’s efforts to rein it also have significant hiring implications. To curb rising prices, the Fed is projected to push interest rates above 5% through 2025. Higher rates discourage borrowing and investing and also signal economic challenges ahead. This environment favors practice areas like bankruptcy and restructuring but tends to restrict proactive hiring for growth. It also pressures firms to keep rates competitive for clients facing rising costs across the board.
Corporate Profits and Confidence
Corporate profitability often aligns with broader economic trends, expanding in periods of strong growth and contracting when conditions decline. As of Q3 2022, corporate profits had fallen for two consecutive quarters, raising concerns about an eventual recession. If earnings stagnate or shrink further in 2024, companies will likely pull back on discretionary spending, including external legal budgets.
Hiring freezes or layoffs within corporate legal departments could follow. However, a rebound in corporate earnings along with higher business confidence and activity would support more open legal roles and competitive compensation into 2025.
Law School Graduations
The supply of new legal graduates looking to enter the job market also influences hiring dynamics from year to year. The number of 2024 law school graduates who found jobs was largely unchanged from the previous year according to ABA data, despite early pandemic worries about availability. Graduation rates are again expected to be steady in 2025. But a potential oversupply of lawyers down the line, especially if economic activity slows long-term, could make the entry-level legal job market much more competitive in the coming years.
Remote and Hybrid Work Options
The pandemic accelerated existing trends towards more flexible and remote work arrangements within the legal industry. As law firms and legal departments shift their work models to adapt, expanded hiring geography and new staffing priorities follow—trends likely to pick up more momentum into 2025 and beyond.
At the same time, the growth of hybrid and remote roles increases demand for specialized support staff and tech tools to enhance collaboration and productivity. Postings for new project managers, software training specialists, virtual workspace managers, and data security personnel are becoming more commonplace. Law firms focused on innovation and those embracing flexible work culture trends appear positioned to take the lead on overall hiring through 2025.
Job Opportunities for Other Roles
Within corporate legal departments, roles related to compliance administration, contract management, intellectual property management, and data privacy also seem likely to grow substantially regardless of broader economic hiring trends. As legal operations staff with specialized tech skills and risk/compliance expertise become as vital as frontline attorneys, backfilling and future-proofing teams around these fast-evolving responsibilities appears primed to shape in-house hiring priorities over the next few years as well.
Final Words
Now you have a clear idea of how the legal industry recruitment would behave in 2025. Keep these in mind and create your portfolio to start applying for available vacancies. Things are expected to become better for the applicants in the future within the legal industry.