Think you practice in the state with the worst economy? Think again.
Everyone seems to know that California is in the biggest economic trouble, with an economy in the dumpster, high unemployment, and no easy way to fix any of it. That makes practicing law in California tougher than practically anywhere. What may surprise many attorneys is not California at all. It’s the other states that are so very close to their own economic abyss. And that abyss can kill a law office's bottom line.
After all, when people can't afford a lawyer, people don't hire a lawyer. When that happens, they lose, the lawyer loses --- and so does the legal system itself because it never has the chance to give people their day in court. The economy in general affects the economy of lawyers specifically.
There’s a new study out that has looked at the economy of all 50 states and ranked them.
The PEW Charitable Trusts has crunched state numbers for more than a decade, with a goal of making state governments stronger in order to improve the services we all get for our tax dollars. Part of that includes reporting on the bad times and, as we all know, we are now in a blockbuster bad time.
They looked at numerous factors to come up with a scorecard for each state: foreclosures, budget gaps, loss of revenue, unemployment, how easy or hard it is for each state to raise its taxes in order to cover shortfalls, etc. All of those things affect the ability of consumers to afford legal representation.
With a “30" score being the worst and a lower score being better, here’s the “top 10" of the worst state economies, in order: California, Arizona, Rhode Island, Michigan, Oregon, Nevada, Florida, New Jersey, Illinois, and Wisconsin.
Wyoming, Nebraska and Iowa scored the best. So if that's where you practice law, don't move your practice.
So where does your state fit? Ohio is almost the center of the list while Georgia’s budget gap put it just a hair behind the auto belt states of Michigan-Wisconsin-Illinois by one point.
The worst ten states account for nearly a third of the US population and economy, which is why those states in particular matter to all of us.
What the study shows is just how much farther the US economy has to go, although there are bright spots of how hard some states are trying. Wyoming, for instance, had a 19.7% drop in revenue but managed to come with 2% of balancing its budget.
Law firms will get through this as the economy starts to get better and better, but if history has shown anything, it’ll be a longer road than anyone wants it to be.
