Lawyers are expensive.
So much so that potential clients choose not to hire one, even when the lawyer could dramatically improve the outcome of the case.
In this article, we’ll cover the X reasons (from a lawyer’s perspective) that legal services cost so much.
Why Are Lawyers So Expensive? (EXPLAINED)
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Lawyers Generally Have Huge Overhead/Expenses
It costs a lot of money to run the business side of a law firm.
People have expectations for their potential attorneys.
They expect to see a nice looking office in a good location (sometimes the fancier the better).
Potential clients expect to see space, leather furnishings, live plants, free coffee/food, a conference room, windows with a view, and more.
All of this costs money.
Clients also expect to have someone answer the phone each and every time they call.
And not just an answering service.
Someone who knows them and their case.
The kind of person who can be an assistant in a law firm is not the same kind of person you’d pull off the street to run a cash register at the local mini-mart.
These people cost money.
Add in the costs of on-going legal certifications, liability insurance, technology, legal research access, clothing, training of associate attorneys, clients who don’t pay their bills, and more…and you’ve got quite a need each month that an attorney must earn just to keep the lights on.
There Aren’t That Many Lawyers/Supply and Demand
The current state of supply and demand for legal services means that lawyers can charge as much as they do.
Let me explain.
First, we know that there aren’t that many lawyers.
Yes, the yellowpages are full of firms advertising services.
But in the scheme of things, there just really aren’t that many lawyers in town who practice just the kind of law that you need, that have the skill and expertise to do a good job.
Because the supply is law, and the demand for their services is ever growing, lawyers can charge premium rates for their services.
Because people (clients) agree to pay them.
If the supply of experienced and effective lawyers was high in a particular practice area, people would have more to choose from.
The lawyer who wanted to charge $400/hr would be competing against a similar lawyer who charges $200/hr.
Assuming they are equally good lawyers, and people knew about them both, most likely people would seek out the lawyer who charged less before the lawyer who charged more.
And if there were many lawyers of equal skill charging less, then the lawyer who wanted to charge a premium would struggle to get clients and would be forced to lower his rates.
People Believe That Legal Work Should Cost A Lot
I’m not saying that people want legal work to cost a lot.
They’ve just taken in the belief in some way that legal work costs a lot, and they should pay the expensive rates for it.
The value of legal work is perceived to be high, and it makes sense then that it should cost a lot.
And again, because people are willing to pay $600/hr for a specific lawyer to do a specific task, the lawyer can go ahead and charge that.
We can debate all day long whether or not the attorney is actually worth that $600/hr.
But in the end, it comes down to what the market is willing to bear.
If the market is willing to pay it, the attorneys could charge it.
Much Of An Attorney’s Day Is Lost To Admin Tasks That Can’t Be Billed
Attorneys work very hard to bill clients for the work that is done in a day.
But in many cases and in many days, that just isn’t possible.
The client sees that their attorney is charging $400/hr.
They think of themselves earning an hourly wage as a teacher, or receptionist.
Fact is, that lawyer might be able to bill clients for only a handful of hours in a regular day.
A regular attorney day starts early for most of us (we don’t wander into the office at noon), and we spend that time first getting set for the day, reading emails, and getting organized.
Then we spend time with staff as they come in, making sure they are training and ready for the day.
Then we spend time with our associate attorneys or managing attorneys, making sure we are ready for the day.
Then we might bill clients, but we might also do client intake calls or meetings, advertising management, scheduling, financials, you name it.
Again, none of this stuff is billable.
To keep the lights on and the employees paid when there’s so much admin in a day, you almost have to charge a lot per hour when you are actually working on a client’s case.
Legal Work Is Not The Most Efficient Way To Do Business
In the real world, if you wanted to order flowers, you’d call up the florist and order them, paying with a credit card.
There’s no stress or drama (usually), and your end goal is just to get the flowers on their way.
In the legal world, every is about protecting the client and achieving the client’s goals.
But when the lawyer does the job, the lawyer can’t just call up any florist.
She has to do the research, and be as close to as sure as possible that the florist is a good one, the best one possible, in fact.
Then she’ll make an appointment to talk to him to talk to him about hiring him to do the flowers, because who would just randomly hire a florist they didn’t know?
Maybe they’d even talk in person.
After vetting the florist, the lawyer would then place an order.
But the ordering process would involve multiple exchanges of documents to confirm that everyone agreed to the terms of the transaction: the kinds of flowers, the costs of the flowers, the delivery arrangements of the flowers, and what would happen if the flowers were not delivered as agreed.
The client would have an opportunity to review this arrangement to make sure he was in agreement.
And so on. I think you get what I mean here.
Getting a lawyer involved makes things more expensive because the lawyer is charged with getting the job done, getting it done right, and putting the client in the best possible position if the job doesn’t go the way everyone imagined.
Most Lawyers Want To Make A Lot Of Money
One of the cold hard facts about the legal industry is that people go into law because they want to make a lot of money.
It just is.
People often choose law because they want a job where they can work in a nice office, earn a six figure salary, and have an extremely financially comfortable life.
With a big salary, they’d be able to pay off debts, travel with their spouses, and send their kids to their schools of choice.
They want to be in a firm where they can charge a lot per hour.
Law school is extremely expensive, often leaving graduates with six figures of debt with a bad interest rate.
Did you know that law students are often not eligible for reduced interest rate loan programs because of their earning potential after finishing law school?
Many new lawyers are faced with student loan payments of $1000 a month or more after passing the bar.
In the end, after law school, they may not even really have a choice.
What Could Be Done To Make Lawyers Less Expensive?
People talk a lot about loan forgiveness and the costs of running a law firm.
In the end, I think the primary reason that lawyers charge so much is because they can.
If they couldn’t charge so much, they wouldn’t.
And I’m not talking about regulation or caps on fees from the government or bar associations.
I’m thinking more about supply and demand.
If there were more lawyers out there in the world who were experienced and knowledgeable, there would be more competition for the clients that exist.
To do this, we’d need to lower the barriers to enter the legal field.
This could be done by:
- Allowing a lawyer certified in one particular state to practice in all 50 states, instead of requiring that they take another bar exam, or “waive in.”
- Allowing other certified professionals to assist legal clients. For example, allowing a certified paralegal to appear with clients at hearings which require less expertise, such as arraignments, status checks, motions hearings, etc. These same professionals could prepare and file legal paperwork, and represent clients in legal areas that are not as complex.
- Reduce the barriers to taking the bar exam. For example, many states require a JD before allowing someone to sit for the exam. Instead, perhaps require an undergraduate degree plus a certain number of years of work in the field, or an apprenticeship.
And yes, all of the other things, such as taking lawyers out of the equation, like:
- Making for legal information available online for people to read and learn for free by themselves.
- Allowing people to appear remotely for hearings without having to file a motion to get it done.
- Making more high quality “forms” available for clients online.
- Allowing parties to fill out and file forms via computer (like filing for a divorce).
- Making public records more easily searchable and accessible by non-represented parties.
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