Why are lawyers so expensive even though there is an excess supply

We were curious why lawyers are so expensive even though there is an excess supply of them. So we asked attorneys and other legal professionals in the United States for their opinions. You might not agree with their every one of their answers, but we certainly found their reasoning entertaining.
 

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There are a lot of law school graduates, and even a lot of people who have passed a state bar exam. When you seek legal advice, you seek the best, and the best in every field command a premium. What do you call a person who graduated last in their med school class? 'Doctor.' Half the lawyers out there graduated in the bottom half of their class. Half the lawyers out there scored in the bottom half of their bar exam. Half of the top half got there through connections (just my estimate) and another percentage are just assholes. Thus the question becomes, how many of the best lawyers are there? Very few, and they command a premium. But that's just my perspective.

Tom Reid, Chief Problem Solver at Certified Contracting Solutions, LLC
 

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From my experience, overhead is so high, like paying qualified staff, professional office space, CLE and bar memberships. I have also experimented with discounted fees and flat fees, and the clients tend to assume they are getting lower service or less competent counsel.

Heather Sunderman
Rockville, MD
 

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Legal services are expensive for a number of reasons. The cost of law school and college education to become a lawyer is extremely high. Typically several hundred thousand dollars. Attorneys often have tremendous repayments that they must make and have to charge their clients enough to pay back this debt. Law offices also have an overhead that people do not often consider: rent, secretarial salaries, insurance and technology to name a few. Even a modest law library and access to electronic research tools such as Westlaw and Lexis/Nexis can cost tens of thousands of dollars a year. Attorneys themselves only get a small portion of the fees paid.

Marc Leibman, a partner at Kaufman, Semeraro & Leibman
www.northjerseyattorneys.com
 

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From my own opinion as the wife a hard-working, butt kicking attorney, why do people think attorneys are so expensive? What a lawyer charges has nothing to do with how many lawyers there are. Fees are based on experience and the hours it will take to complete a service or represent a client. It's not a push of the button and documents appear, as the average person using web programs and their accountants as their law specialists might think. People who make this mistake and think they are getting a great deal make for excellent clients, as they are never fully protected. I would also like to ask people if they are ok with paying a plumber $360/hr to unplug a septic line? I paid $120 to a plumber to snake the septic line just a few weeks ago; it took him 20 minutes. People are willing to pay those fees but not pay a lawyer $150-$250 per hour for their specialized field. It really amazes me, but then again, the average person doesn't budget for legal services, even the basic of services they don't even know they need, such as wills, setting up a trust or probating a will. People will pay dentists, doctors, plumbers, electricians, and chiropractors, but they EXPECT lawyers to work for free. It happens to Todd all the time, especially the call for FREE advice.

Tiffany Carlen Hurd, President, Inventor of Tiffie Sleeves ~ No Snaps. No Straps. Just Sleeves. Tiffie LLC
 

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Married to an attorney, and I see how the business end of law works "from the inside."
 

1. Hiring a lawyer is a 'distress purchase' (marketing term). People don't go out and hire a lawyer because they think it would be nice to have one, people hire lawyers because something serious has hit the fan - divorce, auto accident, property dispute, some one else has filed suit against them (foreclosure, for instance).
    
2. When you need a lawyer NOW, price isn't the primary consideration. This is usually an emergency of some kind, and the stakes are often very high. This is not a good bargaining position to be in, so when the lawyer says $XXX an hour, the person who has the legal problem doesn't really have much choice because their back is ALREADY against the wall. There is also the perception that the most expensive lawyer is the best lawyer (which isn't necessarily the case), and lawyers do have a vested interest in maintaining this perception.
    
3. The legal system is inefficient, costly and slow. Filing fees and court fees are expensive (which means that poor people are sometimes denied access to the legal system because they just can't pay), there are additional significant expenses and fees such as court reporters, deposition fees, expert witness fees, travel charges, and ad infinitum.
    
4. The term 'billable hour' seems to be quite flexible. Some attorneys bill by the quarter hour or fraction thereof, so if you call to say hello, you've just paid 25% of the hourly rate for a 30 second conversation. At the other end of the spectrum, some attorneys don't bill very well, and often do a LOT of work for free because they learned law, not business management at law school.
    
5. Attorneys have a considerable amount of overhead. Bar dues, continuing education, law books and subscriptions, rent (need to have a decent office, we are not even talking about a nice one), a decent wardrobe (do you want your lawyer appearing in blue jeans?) errors and omissions insurance, clerical help, phone bills, auto expense - all this goes on whether the client pays or not, and often the client doesn't pay timely. If the case is lost (remember that 50% of all lawsuits have a loser as well as a winner), the client may not be able to pay at all.

You didn't ask for remedies, but I would suggest the following:
 

1. Move towards mediation as opposed to litigation at the START of proceedings, rather than as the last ditch effort to avoid going to trial. Discovery may still be needed before mediation, so this might not make much difference.
    
2. Reduce court costs and filing fees to more reasonable levels in order to improve access to the legal system. (This isn't under the direct control of lawyers, but they can press for it.)
    
3. Allow paralegals to handle simple procedures, especially non-adversarial simple procedures. (This is currently not legal in Florida.)
    
4. Have a listing of lawyers with their fees and success rates by type of case, and date-weighted score so that someone who won a single big case in 1946 doesn't get a higher score than someone who consistently wins smaller cases.
    
5. We need to change the attitude of 'Sue the bastards!' at the slightest (or no) provocation. This one is NOT going to be easy .

Mike Arman, from Florida
 

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The answer to this dilemma is that all attorneys are not equal. There are a lot of people graduating law school and passing the bar exam, but fewer experienced and exceptional lawyers. Thus, retaining someone out of law school may not be expensive, but retaining an experienced attorney will be.

The reason is that having a good attorney can increase your chances of saving or earning a significant sum of money or obtaining something that is valuable to you (for example, your freedom. Thus, you will be willing to pay more for his or her services. The same is true in other fields - you will pay more for a hair stylist, doctor or other professional who will provide you with more value than you will for a less desirable one.??

Thomas J. Simeone, Esq., Simeone & Miller, LLP
 

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A) Because if you filter all licensed attorneys down to the ones who are experienced, engaged full time in their craft, passionate about their work and clients, have an emphasis and strong legal knowledge base in one or two subject matters, are intuitive and can read between the lines, who have great people skills, are seriously involved in their client's industries or affairs, and devout themselves to leadership and engagement, there are very, very few left.

Consider, by analogy, business consultants. Anyone can set up shop as a consultant. No license is needed and there are no regulations in most cases. So there is absolutely no legal barrier to entry. Yet the good business consultants are far more expensive than most good attorneys.

The assumption that more supply results in lower prices is appropriate only where the supply is of equal quality. In the delivery of personal services, supply is not all equal and never will be.

Stuart B. Wolfe, Attorney at Law, WOLFE & WYMAN LLP
 

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Let's say a lawyer is charging you $200 per hour. That seems like a lot of money to give one person every hour that they work for you. However, around 40% of that money goes to overhead. Things like the office you met the attorney in, his/her secretary or paralegal, the paper they wrote your lawsuit on, the ink they use, the legal research tools they use, malpractice insurance, bar association dues, marketing, etc. That leaves the attorney with $120 per hour. That's still impressive, don't get me wrong. But then that money gets divided up. If the attorney has a partner, or isn't a partner theirself, another 30% or so goes into that pool. So now the attorney is making something around $84 per hour.

That $84 needs to support the attorney, cover the value of the service they provided to you (after all they went to school to learn about your problem and fix it for you), and, I happen to think this is the most important part, protect them. Every case an attorney works on basically stays with them for life. Malpractice insurance essentially tracks every case you work on. That means every year that you work, it gets more expensive.

I also think it's important to keep things in perspective. Legal problems can have devastating consequences - you could be looking at jail time, or the ruin of your finances. How much would you pay to have someone help you with that? You pay a medical doctor to help you with your health problems.

In the end, the market for attorneys may be saturated, but the basic fundamentals of law practice mean that the price cannot shift too far down. Rather, I've found it to mean that it simply isn't going up. If you're working with an attorney who charges significantly less than the market average, you should ask yourself why that is. You get what you pay for.

Shane A. McClelland
 

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Because we can. Plain and simple.

Shane Fischer, Attorney at Law
 

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People charge for a loaf of bread based on the ingredients. The cost of flour, salt...the time workers are paid to make it. Legal help is charged for based on the cost of producing lawyers, and notwithstanding the excess of lawyers not one of them is getting a bargain rate at law school. The loans and costs that people assumed to become lawyers leads to a need to charge much more to cover the opportunity cost.

Lynda L. Hinkle, Esq., The Law Offices of Lynda L. Hinkle, L.L.C.
 

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The economics of law practice has changed. Large firms are forced to continuously raise billing rates to finance their increasing overhead in salaries and new global offices. The large firms are sacrificing the ability to handle litigation for clients in an efficient and cost-effective manner in order to protect their partner profit margins. These profits can only be maximized by international M & A practices with bloated billing rates and by opening new offices in, for instance, Dubai.

Until there is a paradigm where clients demand that law firms share more with clients in the rewards and the risks of litigation and transactions, billing rates will continue to increase. The 'old' paradigm opens the door for boutique firms (many of which are comprised of former large firm lawyers) to team with clients on accomplishing the clients' goals at a fraction of the cost and increased efficiency.

Michael K. Hurst, Board Certified - Civil Trial Law, Texas Board of Legal Specialization