Median lawyer income is dropping, when adjusted for inflation, study finds
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Lawyer income appears to be increasing, but that’s not the case if you take inflation into account, according to a new study.
Lawyers’ median real income has decreased by 1.9% over nearly two decades, according to the study by researchers at the Old Dominion University.
Reuters has the story, while the TaxProf Blog noted the findings.
Median lawyer income in the United States was $129,389 in 2001, based on July 2020 prices. In 2020, it was $126,930. The peak during that time period was in 2010, when lawyers earned $134,005 in inflation-adjusted dollars.
The decrease in lawyer income comes at a time when the median real income of all workers has increased by 3.93%.
The authors attribute part of the decrease in real income to a decline in demand for legal services, according to Reuters. In 2001, legal services made up 0.58% of U.S. gross domestic product. The percentage decreased to 0.28% in 2019.
Reasons for the decrease in demand include automation of legal tasks, an increase in paralegals and a decline in litigation in some practice areas, according to study findings cited by Reuters.
The article also looked at the number of lawyers for every 1,000 people nationally. The number increased from 1.72 for every 1,000 people in 2001 to 2.22 in 2020, according to study information cited by the TaxProf Blog. The study noted that the number of first-year law students is decreasing, however. The number was 6.6% lower in 2020 than in 2001.
The study authors are James V. Koch and Barbara Blake Gonzalez, faculty members in the Old Dominion University’s economics department. The study will be published in the Journal of Economics and Finance.