Lawyers in Love – With the Economy
Here’s an interesting new gauge of the economy: measuring strength, or weakness, in different areas of the economy based on legal activity.
That’s just what LegalShield, the IDShield people, have done with the LegalShield Law Index.
For instance, when legal activity heats up in the foreclosure arena, it is probably a sign that the housing market may be about to take a tumble. An uptick in demand for personal bankruptcy legal services might indicate that a recession is on the way.
Such practical measures of activity in the economy are not unique. In fact, one way that economists “see the future” is by counting the number of semis in truck stops: more semis, more economic activity.
Legal Services Demand Shows a Strong Economy
These days, the LegalShield Law Index is indicating a strengthening economy.
The Index is made up of five indices, including the LegalShield Consumer Financial Stress Index, LegalShield Housing Activity Index, LegalShield Bankruptcy Index, LegalShield Foreclosure Index, and the LegalShield Real Estate Index.
Each index relies on LegalShield’s unique and proprietary database of actual member demand for and usage of legal services to predict the health of the U.S. economy.
The key predictive takeaways from the first public release of data, through May 2017, are as follows:
• Consumer confidence may continue to ease in the months ahead, but will likely remain strong by historical standards.
• Housing starts, which have risen at a stubbornly slow pace since 2012 and remain well below pre-recession levels, should continue to improve slowly in the months ahead.
• Bankruptcy filings should remain subdued in the near term. However, elevated levels of household debt are worth keeping an eye on, as they could lead to upward pressure on bankruptcy filings in the future.
• Foreclosures should remain subdued in the short term, but may begin to rise in the second half of the year.
• Existing home sales should continue to improve slowly in the months ahead.
The LegalShield Law Index is made up of five indices that are generated from LegalShield’s proprietary data, which tracks the demand for different types of legal services for the various areas of law over the past 15-plus years.
Each time a LegalShield partner law firm receives a request from a LegalShield member, the request is logged as an “intake” within one of roughly 70 unique areas of law (e.g., real estate, criminal, bankruptcy), depending on the nature of the legal need.
LegalShield will be releasing the Index monthly, on the sixth business day of each month.
This is an interesting new way of gaining hints about where the economy is moving.
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