Why Lawyers are expensive even with the excess supply of Lawyers

11/08/2014 16:00

The question “Why lawyers are so expensive even with excess supply of lawyers?” had become a trending topic on Quara several months ago. It gathered great opinions and comments in the middle of laxity for legal markets. But what’s really the accurate point of the question? Check some of the answers offered to decipher the absurdity of this matter:

1.       Craig Montuori, Lover of politics, disruptive technologies, and systems of people: answered:  This is because of the bimodal distribution in legal pay:


As of Class of 2006
Source: https://www.gradschools.com/artic...



As a result, though the majority of law graduates and professionals in the legal field can be found at the low end, the competition for the 'right' legal services is more fierce than ever. When it comes to legal work, people want their services done right.

Bob Hooker, Researcher in Web 3.0 with way too many opinions who has read too much: Answered: Lawyers are not more expensive than just about any other highly trained professional of their class.  By the hour they are cheaper than doctors and less than  many skilled technologist.  

The issue is that you often don't need a lawyer for just an hour or two.  Legal cases are, by the requirements of the legal system, drawn out activities.  So unlike the dentist who you may spend 4 hours with a year or the doctor you see for a half hour a year when you need a lawyer you will often need them for weeks and weeks, maybe even months.  Even if you are very sick you will unlikely consume a full week of a doctor.  Most medical treatment is managed by technologists.  A day in surgery is an extreme and rare event, a court case can easily run in to the weeks.  Since they tend to sell in larger buckets of time they are expensive.

Few people need the services of a high end Solutions Architect, a civil Engineer, or a ghost writer.  But if you did you would find they cost a great deal.  If private people had to build high end web services they would find that 3 months of a team would run them over $100,000 in development costs.  I am billed out at a higher rate than my lawyer, but I never do home visits or work with private citizens or even small businesses.


2.      Paul Kang, @epistemicfai, answered:  Lawyers are not a single commodity.  Their wages are not determined solely by the number of lawyers licensed to practice.  The famous ones get paid a lot.  Senior partners make their money through leveraging billable hours by young associates.  It's possible for some of the older, established lawyers to get a piece of the action without putting in a lot of hours themselves.  Though, in practice, that's probably not that prevalent.  

The top lawyers will command high prices no matter what.  When a firm has exceptional talent, leverage, or other intangible asset, it is no longer a commodity and starts acting more like a monopoly.  

For basic legal work, I'm sure you could find good rates as long as you're not shy about shopping around.  In other words, there is no disconnect.


3.      Brian Rogers, corporate lawyer and contracts aficionado, answered: One reason legal fees are high is that law firms' cost of services is high. Here are some of my thoughts on the causes:


Ø  Conflicts of Interest Rules--While ethics rules relating to conflicts are a valuable client protection, they keep firms relatively small, such that economies of scale are difficult to achieve. Each lawyer's conflict is imputed to the entire firm. In my own market of St. Louis, Missouri, the largest offices cap out at a little over 250 lawyers. While this is partly a function of the size of the local legal market and economy, every additional attorney creates conflicts that result in lost business, which keeps firms within a certain size limit.


Ø  Unauthorized Practice of Law Laws--Again, this is often a valuable client protection, but there are 50 states in the US and lawyers can practice law (as defined in each state's statute) only in the states in which they are licensed. This localizes legal markets and again makes economies of scale difficult to achieve. It's also very difficult for a law firm to have a truly national practice--especially when the subject matter is largely state-law (rather than federal) driven.

Ø  Ethics Rules That Make Limited Representation Difficult--It's difficult--and somewhat risky to the law firm--to offer limited scope representation. While it might make sense from the client perspective to have a lawyer do a small piece of a project, it's often not so simple from the lawyer's point of view.

Ø  Malpractice Considerations--This is related to Item 3, but being thorough lessens malpractice exposure, although it takes extra time. Unlike many industries, law firms have limited ability to manage risk through contract terms with clients, and lawyers often protect themselves by striving for flawless work even if the effort is disproportionate to the legal need.

Ø  Market Inefficiencies--It's so difficult to match a client with the attorney that would be the best fit, that it rarely happens. Again, this is partly a function of relatively small firms operating in localized markets. An efficient market would funnel matters to attorneys who have the most appropriate experience and ability. These attorneys and their teams would have such an ability to do a quality and efficient job that weaker players would be unable to compete.




Jeffrey Cancilla
Orange County, California Area

+1 714-502-5295

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