With an impending administration change in the U.S. on January 20, 2025, many of our clients and professional friend have asked us the same question: What will the second Trump administration mean for my firm?
This is the first of a series of articles about how the demand for legal services might change over the next two years.
This is an excellent question, as each U.S. presidential election causes ripples throughout the legal world in matters that directly affect our clients. Over the next few weeks, we will break down some of the more persistent questions we have received to explain what your firm can expect from a second Trump administration, so you can determine if you are ready to leverage the changes to capitalize on the momentum that comes with any U.S. administration shift.
The first post in our series will focus on the U.S. and changes that may occur in immigration. Next, we will discuss tax implications in countries where our clients do considerable business, including the US. Finally, we will wrap up our series with overall recommendations for all our readers to ensure that their firm is in the strongest possible position to navigate current political trends favorably.
A long-standing friend of our firm asked us to weigh in on the impacts to immigration law from a federal and state perspective, since their firm is in a sanctuary state. The questions we worked together to unpack were: 1) What changes can law firms expect to immigration law in the coming years? 2) How will those changes affect disbursement of federal funds? 3) How can I ensure that my firm is knowledgeable in current trends that change rapidly?
We were glad to see our friend asking such thought-provoking questions because now is the time to prepare by educating staff, communicating with clients, and researching the regulations to understand the proposed changes.
An Overview
The Trump re-election platform ran on a bolder, stricter approach to enforcement of legal and illegal immigration in the U.S. Among the proposed immigration policies of the second Trump administration, increased security along the U.S.’s southern border, increased deportation efforts, restriction on pathways to immigrate into the U.S., and greater restrictions on issuance of H-1B visas, which are the visas employers use to hire non-U.S. citizens. And while none of these proposals has actually been acted upon, should any of them pass as enforceable, there will be economic implications for employers, those seeking employment from outside the U.S., and taxpayers alike.
Restriction on Legal Immigration
The administration plans to limit legal immigration pathways for those seeking employment in the U.S. Of primary interest to our clients is the redefining “Specialty Occupation” for the issuance of an H-1B visa for skilled labor. Previously, laborers could obtain an H-1B visa without proof of a specific degree or specialty training. Under a second Trump administration, employers should be prepared to provide additional evidence to obtain an H-1B visa on behalf of their employee. The specific evidence will depend on the role the employee is hired for; essentially, proof of credentials to perform that role. Once the evidence is submitted and approved, employers should anticipate potential time restrictions that may come with the H-1B visa. Under the second Trump administration, employees, who receive an H-1B visa, will be limited to one year of work in the U.S. It is unclear as of this writing what, if any, mechanism will be used to extend permission to work and for how long.
Employment Implications
Since the H-1B will be limited in both scope and time, employers would do well to consider if the roles they are offering to foreign laborers could be fulfilled by a laborer with permanent or long-term permission to work/stay in the U.S. However, consider that under a second Trump administration all visas issued will face increased scrutiny and processing time. If a firm offers help to employers in obtaining H-1B visas for their employees, that firm will need to assure that the employer has submitted as many petitions for H-1B visas as possible before Trump is inaugurated at the end of the month. Next, firms should educate their clients that rely on H-1B status employees to perform critical functions within their companies of other visa options that could provide a more stable pathway to entry and work within the U.S. Finally, firms should encourage their clients that employ via H-1B visas to assess whether the role can be competently performed by another candidate that already has long-term approval to work and live in the U.S.
All of these policy shifts are moving toward a reintroduction of the "Buy American/Hire American" executive order introduced during the first Trump administration. This policy places a tremendous amount of latitude in the hands of immigration officers to determine whether a candidate’s petition for employment is allowable. It is, therefore, imperative to stay informed on changes as they happen, so you can support your clients in preparing petitions, gathering evidence, and amending job descriptions to support their need to hire a candidate that requires an H-1B visa.
Economic Impacts
While creating and preserving employment opportunities for U.S. citizens is a laudable goal, the U.S. GDP is, and always has been, incredibly dependent on foreign labor to achieve completion of the myriad amount of work that fuels the economy. Not to mention, the open approach of the U.S. to allowing labor and study opportunities to foreign-born workers has resulted in lucrative innovation through skilled labor for larger companies such as Amazon, Microsoft, Deloitte, Tesla, and Google to name only a few. Further, U.S. industries that are reliant on immigrant labor are construction, hospitality, health care, agriculture, and both professional and non-professional services.
In the short-term, these immigration policies have the potential to reduce the GDP by anywhere from $30 - $110 billion, if attempts by U.S. companies to hire foreign labor are delayed or halted. Long-term, the U.S. population’s growth will only be about one-third of what it is projected to be if immigration trends remain the same. The slower population growth results in smaller labor force, reduction in production of goods and services, potential cutbacks by companies that cannot fulfill their hiring needs, and an increase in the overall prices of goods and services because of the limited availability.
Is There Any Good News?
The focus on turning U.S. businesses to cull talent from U.S. labor pools is an undeniable, immediate impact of limiting the introduction of foreign labor into the U.S. job market. Other than that, there are not any tangible, monetary benefits for businesses to consider. American labor is more expensive than foreign labor for comparable skill. Higher pay for works results in higher prices for goods and services.
There is some untested argument that limiting the amount of immigrants allowed into the country will reduce the amount of welfare benefits paid out overall, and that will reduce the amount of cost to the public to fund social problems. Unfortunately, this theory does not bear up against the evidence that of the roughly $1 trillion spent on social welfare each year, between 21% and 28% of program benefits were allocated to households that had a head of household that was not native born. In other words, the overwhelming majority of welfare benefits paid by Americans goes to Americans, not immigrants.
Be Prepared
While a second Trump administration would likely work to implement many changes to the U.S. immigration system, the administration’s capacity to act will depend on how quickly proposals can pass through the channels of government, if at all. Any proposed change that is passed would have wide-ranging effects on immigrant communities, employers, and the broader U.S. economy. But employers (and the firms that represent them!) are not without resource to fulfill their business needs. Planning for changes by pushing through outstanding H-1B applications is a practical, immediate measure all employers can take to protect their interests in hiring foreign candidates.
For support in review impending immigration changes or summary reports on specific immigration-related, issues, contact Walker Clark for a complimentary 30-minute consultation. We can review the question with you and propose a plan of action to ensure that you and your clients will be ready to navigate and comply with any changes that arise.
Sarah Max
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