Why Are Lawyers Paid So Much?

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Lawyers are perceived to be one of the highest earning professions.

While some lawyers earn a high six figure salary (or even seven figures), that is not necessarily the case for all.

This article talks about the reasons why some lawyers get paid a lot, and why some do not.

Why Are Lawyers Paid So Much? (Explained)

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First and foremost, (as a former lawyer), we’d like to dispel the assertion that all lawyers get paid a lot.

The fact is, many lawyers are not paid much at all, sometimes as much or even less than an elementary school teacher.

The primary indicators as to whether a lawyer earns a high salary are the location of the work (in a big city like New York or Los Angeles, for example) and the type of law (corporate law vs traffic law).

Secondary to that is whether the lawyer is working for clients who have money to hire a lawyer or for clients who do not.

If an attorney works for a big firm in a big city in a big kind of law, it is likely that they lawyer makes a pretty decent salary, especially if the lawyer has years of experience and ownership in the firm.

But otherwise, the range of salary varies widely.

Reasons Why Lawyers Don’t Always Make Money

One of the reasons lawyers cost a lot is that the overhead for a law firm is quite high.

It costs a lot of money to pay the rent in a high class office building, to pay multiple staff that don’t bill, and to train associate attorneys who aren’t ready to fly solo.

These costs are also the reasons why lawyers early in their career don’t necessarily get paid a lot.

Many law firms are moving away from the traditional billing goals for a bonus once a year to earning a percentage of what is billed and collected.

This incentivizes attorneys to work hard and bill as much as they can, while shifting the burden of paying a big bonus off the law firm (which was obligated to pay whether or not the hours billed by the associate were collected).

But Some Lawyers Do Make a Lot of Money…Why?

Some lawyers do make a lot of money. There are several reasons for this.

First, the basic principles of supply and demand.

It takes a lot of money to train a lawyer, and many years for them to gain the requisite experience of an expert.

Many lawyers (the majority, actually), fail to achieve this level of expertise, moving away from the law to other careers, having a family, etc.

Since there are few lawyers, they can demand and receive high salaries.

With this level of expertise, a lawyer can charge a lot more per hour.

Thus, the firm can afford the lawyer’s high salary demands, and still money money off of their efforts.

Second, being a lawyer is sometimes really terrible.

It is not often a desirable job.

The hours are awful.

The clients can be awful.

The work can be awful.

The other lawyers can be awful.

If lawyers earning close to minimum wage to do the job, most of them would go off and find other, more enjoyable work.

The high earning capacity of the profession attracts people, and then once they are accustomed to the standard of living, binds them.

Third, it does cost a lot to be a lawyer.

It often costs more than $100,000 to complete the education required to become an attorney.

Lawyers are also expected to dress a certain way, look a certain way, and behave a certain way.

This requires money, and a lot of it.

Many young lawyers pay thousands of dollars each month to work to repay their student loans, as well as to purchase high quality clothing for court appearances.

Let’s not forget the high cost of living in some of the places lawyers practice.

While a six figure salary might seem like a lot, in some places (like New York City), a low six figure salary is barely even enough to live on.

If not for high salary opportunities, many people could not become or remain lawyers.

You Pay For It (You Enable It)

Lawyers will charge as much as the market can bear.

They want to make a good wage for themselves and their families, and they want keep their businesses cash positive and stable.

As a client, you have the choice to pay the rates of an attorney, or to represent yourself.

Or find an attorney to help you that charges less.

When faced with a difficult situation, people just pay the money, often without questioning whether the attorney is actually worth that amount.

Once of the main reasons lawyers get paid so much is that we choose to pay the retainers and hourly rates they demand.

This can be the product of low supply (meaning no one else will take the case), or desperation (need help right now), among many other reasons.

But we can’t ignore the fact that the clients make it possible for the lawyers to get paid so much.

Wrap Up

While it must seem like lawyers get paid an extraordinary amount, it is rarely the case.

Oftentimes, lawyers go out of their way to appear like they get paid (expensive clothing, fancy cars, elegant offices) so that you will pay them the fees they request.

But in most cases, a small fraction of the money you pay the firm actually goes to the attorney, and instead is funneled into overheard, continuing education, malpractice insurance, and more.

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Why Are Lawyers Paid So Much