Posted by Bloomberg Businessweek on January 18, 2018 08:49:33Many real estate lawyers, or RAs, in the US are making money and making it by not making the right decisions.
The current housing market is so tough, and lawyers are trying to make sure they can keep their jobs.
So far, that hasn’t worked out for the RAs.
The study, by real estate research firm CB Insights, says there are fewer than 100 RAs in the United States.
About 40 percent of them earn $30,000 a year or less, compared to more than 80 percent of their peers in the industry, according to CB Insight.
There are more than 3,000 registered real estate law firms across the country.
“The problem is, the law firms are not providing good services, they are not doing the work they’re supposed to do, and they’re not doing it well,” said Kevin Bensch, chief economist at CB Insigh.
The firm has seen its revenue decline from $4.2 billion in fiscal year 2019 to $3.6 billion in 2020, or about 4 percent of total revenue.
The company expects its 2018 revenue to be down 6.7 percent to $2.6 million.
“Our revenue in 2018 was down $1.5 billion from our 2019 baseline, but our revenue in 2020 was up $1 billion,” Benscher said.
The CB Insighters study found that in 2017, RAs made about $1 million a day, but in 2020 that figure fell to $860,000.
The number of lawyers with a full-time office, and how many have been retained by their firms has also declined.
The researchers estimate there are about 3,500 full- and part-time RAs worldwide, down from about 6,000 full-timers in 2015.
RAs earn less per hour than non-lawyers.
That makes it hard for the average lawyer to afford a house and car, which are often the main expenses for their clients.
The decline in employment, along with the declining price of real estate in many areas, is a concern for many lawyers, especially those who make a living on commissions.
“We’re having to make a lot of changes to our salaries and our compensation packages,” said Benscheer.
He expects that percentage to continue to fall as the market continues to tighten and more lawyers move to other industries, like real estate.