Uh-oh, N.C. might be running out of lawyers

Plus: Layoffs in Ballantyne; Rap-country controversy goes viral; Beating 'I Am Not a Robot'

The Charlotte Ledger

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Good morning! Today is Monday, April 8, 2019. Here are today’s big stories in Charlotte-area business news:

Whatever will we do without all these lawyers?

Everybody loves a good lawyer joke, right? (Except probably the lawyers.)

But now it is looking as though the growth in the number of North Carolina lawyers has tapered off, big time. So the once-booming pastime of making lawyers the butt of jokes isn’t what it used to be.

A decade ago, a rotten economy drew boatloads of aspiring attorneys into law schools. Since then, North Carolina law schools have cut enrollment. The Charlotte School of Law went out of business in 2017 and is now, fittingly, the subject of a number of lawsuits from its former students. And the number of lawyers is stagnating in a state that already has among the fewest per capita in the country. Somehow, though, the state’s economy has managed to continue thriving.

Last week, N.C. Lawyers Weekly explained some of the financial challenges hitting the state bar, which regulates the state’s legal profession and has operated on a deficit since 2014:

Membership rose by fewer than 300 attorneys last year, to 29,021 from 28,725, an increase of little more than 1 percent. From 2016 to 2017, the bar actually saw a 1.1 percent drop in membership.

By comparison, from 2008 to 2009, during a nationwide boom in the number of students going to law school, membership increased by 7.5 percent, to 23,749 from 22,085. A glut of new attorneys in the wake of the Great Recession had a profoundly negative effect on job prospects for those new attorneys, causing law applications to plummet. Those numbers have only very slowly started to creep back up, but total law school enrollment nationwide is still well below where it was in the early 2000s.

In an email to the Ledger, bar executive director Alice Neece Mine pinpointed the main reasons for the flatlining:

  1. A substantial number of lawyers from the Baby Boomer generation are retiring and going inactive

  2. Fewer applicants to law school following the recession in 2008

  3. Low passage rates on recent bar exams.

It must be the test: Law deans in North Carolina have complained in recent years that North Carolina’s bar exam is too tough, since its pass rate is one of the lowest in the country. So this year, naturally, North Carolina changed the test and will use the same exam as most other states. That could result in higher pass rates and perhaps more lawyers from out-of-state coming here. Never say lawyers aren’t crafty.

It’s hard to know what, if anything, the end of North Carolina’s lawyer boom means. It could be a healthy move to a more productive economy freer of unneeded lawsuits. It could be a troubling move away from the delivery of justice. Or it could just be a right-sizing to a thinner job market for legal eagles. Economics also dictates that if the demand for legal services increases faster than the supply of people who can provide those services, then legal bills should rise.

Maybe the joke is actually on the people who are paying lawyers.

Viral story alert: Country? Rap? Or both?

If you’re a typical Charlotte suburbanite you might have missed the big music-industry controversy that broke out last week when Billboard removed the hot single “Old Town Road” from its ranking of country songs. The viral hit from 19-year-old Atlanta rapper Lil Nas X “does not embrace enough elements of today’s country music to chart in its current version,” Billboard said.

“Old Town Road” features lyrics including “My life is a movie / Bull ridin' and boobies / Cowboy hat from Gucci / Wrangler on my booty” set to a hip-hop beat. Charlotte hip-hop stations have started playing “Old Town Road” in the last week or two, according to a Ledger source who listens to such stations.

Lil Nas X’s response on Thursday: Cut a new version — with country star Billy Ray Cyrus (Miley’s dad). As of Sunday, the remix version sat at #1 on Apple Music’s charts, while the original was at #3.

Country? Rap? Or both? You make the call (safe for work):

Meanwhile, The Daily Beast over the weekend chronicled how the song elevated an unknown teenage rapper into an overnight sensation:

The up-and-down journey of “Old Town Road” started on the social media platform TikTok. A prolific user, Lil Nas X posted his song on the app, which is largely dominated by teenagers making short-form, highly edited videos. As Gen Z does, it quickly turned “Old Town Road” into a musical meme: the “Yeehaw Challenge.”

Following the rules of viral success, the song then leaped over to Twitter, Instagram and YouTube before populating streaming platforms like SoundCloud, Spotify and Apple Music. Lil Nas X did it all without being signed to a label, meaning he never officially released a studio song ready for airplay. The song sparked a bidding war, however, and Lil Nas X is now with Columbia Records.

If you have teenagers, feel free to embarrass them by singing or humming it around the house.

Layoffs in Ballantyne

MassMutual is laying off 164 employees in its Ballantyne office as it consolidates a bunch of its operations up in Boston, the Biz Journal reported late last week. It is closing its office in the Woodward Building at 11215 N. Community House Road.

Sayeth the Biz Journal:

Most of the jobs relocated from Charlotte were investment services specialists, business acceptance consultants and call center employees.

Layoffs are tough and can inject all kinds of stress into a family. Rarely is there a great time for one. Not to be too Pollyannish here, but if you were to be laid off, is there a better field, place and time to experience that layoff than in financial services in Charlotte in 2019? About half of MassMutual’s office had already taken other jobs since the company announced its plans more than a year ago, the company’s spokeswoman told the publication.

Last week, the Labor Department said the Charlotte area added 3,700 jobs in February. In the last year, the region has added 24,700 jobs. The area’s unemployment rate is at a low 3.8%.

Godspeed to those hit with layoffs. May they find other work. The odds are in their favor.

Loves me some internet

Tired of websites that want you to prove you’re not a robot?

Here’s one creative way around them. (Love the mic drop at the end.)

Worth a read

In brief

  • Grounded again: American Airlines is canceling about 90 flights a day through early June because of the grounding of the Boeing 737 Max. The airline had previously canceled flights through late April. (USA Today)

  • Outside view: Warren Buffett says Wells Fargo’s next CEO “shouldn’t come from Wall Street.” Buffett, the bank’s largest shareholder, adds: “They probably shouldn’t come from JPMorgan or Goldman Sachs.” (Business Insider)

  • Lots of dough: The parent company of Chuck E. Cheese’s says it is joining this year’s IPO rush. It will be the first restaurant company going public in four years. There are two Chuck E. Cheese’s restaurants in Charlotte and one in Concord. (CNBC)

Taking stock

Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:

It was a pretty good week for local stocks, with only two — Kroger and Speedway Motorsports — losing ground.

Also notable:

  • Bank of America stock up more than 5% on the week.

  • Major indexes are in solid double-digit territory for the year, including the NASDAQ, up almost 20%.

Getting in on IPO mania

Should you buy the stock in companies that have recently gone public, such as Lyft? It’s a pressing question, since well-known brands including Uber, Slack and Pinterest are expected to have IPOs this year.

But putting money in isn’t always a wise move. The AP examined the track record:

The first day of trading for an IPO is often a great one, when enthusiasm is surging. IPOs have returned an average of 17.9% in their first day of trading, according to data from 1980 to 2016 compiled by Jay Ritter, an IPO specialist at the University of Florida’s Warrington College of Business. That would count as great year for an S&P 500 index fund.

But IPOs go on to return an average of 21.9% in the three years following their IPO, lagging the market.

Some IPOs tend to do better over the long term, notably those that bring in more revenue. Since 1980, companies with $1 billion or more in revenue (in 2015 dollars) have returned an average of 42.7% in the three years following the IPO. That’s better than the market.

Smaller companies, meanwhile, have historically had better first-day gains than their bigger IPO rivals but go on to return an average 20.2% over three years. That’s well below the market.

Got a news tip? Think we missed something? Drop me a line at editor@cltledger.comand let me know.

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The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.