Thursday, February 24, 2011

Top Lawyers Now Earn Over $1,000 per Hour

While companies have cut legal budgets and continue to push for hourly discounts and capped-fee deals with their law firms, many of them have shown they won't skimp on some kinds of legal advice, especially in high-stakes situations or when they think a star attorney might resolve their problem faster and more efficiently than a lesser-known talent, reports WSJ.

In other words, when you need a code talker, you need a code talker---and nothing but a code talker.

Nearly 2.9% of partners at a group of 24 large U.S. and British law firms asked for $1,000 an hour or more in U.S. cases last year, up from 1.5% in 2009, says WSJ.

6 comments:

  1. A Liberal in LakeviewFebruary 24, 2011 at 11:02 AM

    When dealing with ANY lawyer who belongs to a trade cartel that was established by a government, many problems can be solved by remembering that a condition of membership is an oath to uphold the government's vast maze of laws.

    Of course, without the government's false and immoral laws, why would anyone pay $1,000/hr to a racketeer who holds a law degree?

    ReplyDelete
  2. No, that would be steal 1000.00/ hour...

    ReplyDelete
  3. Sheer stupidity.

    People used to read for the law at home at the beginning of the 20th century. You didn't need law school or a license.

    The established lawyers wanted to keep their fees high and the supply short. Next things you know, there are licenses, bar exams, law schools, LSAT - the whole educational racket.

    ReplyDelete
  4. I hear what Lila and the Liberal in Lakeview are saying, but I think you could use a look from the inside (I am a corporate lawyer at a large firm; and a Rothbardian).

    Compared to other "trade cartels", the Bar and law school is a low standard. Becoming a lawyer is easy in most States, and the bar exam is memorization only. Supply in law is anything but tight. As a result, legal fees, though high, do not suffer from nearly as much cartel-premium as say doctors/hospitals. Note this doesn't justify the cartel, and you should know many lawyers don't support it (I personally view myself as making protection payments to the bar so I can continue to help clients in legitimate business deals that help the world go round.)

    The $1000 lawyer is working on Pfizer's 5 billion dollar deals in the capital markets (I bill a more modest $500, though I am early in my career). It is the complexity of securities laws, or IP laws and similar areas, and high stakes nature of a deal that size that justifies the fees (which still dwarf investment banking fees).

    In the middle market, fees are more reasonable if you are doing a 5-100 million dollar transaction (up to a billion).

    It is undoubtedly true that several practices benefit from 20th century legal complexity, such as tax, employee benefits, labor, securities etc. It should not surprise you to learn that in most big firms, the biggest average fees are charged by the tax group.

    However, day to day middle market corporate in the private sector is a lot more akin to the type of law practiced early in the 20th century, since you are essentially practicing the common law of contract. The skills to succeed have far more to do with motivation, organization, entrepreneurship, negotiation ability and long-term strategic thinking. The ability to visualize consequences of a transaction in terms of the allocation of risk is what you compensate a corporate lawyer for, not so much dubious legal complexity.

    In a society of private law, it is not like large transactions, the need for negotiation and risk-sharing via contracts would disappear. If anything it would get more innovative and specialized.

    ReplyDelete
  5. @Perry Mason.

    Of course supply is not really tight - that's my point. It's tightened artificially by a hundred and one professional hurdles.

    And while thousand buck an hour lawyers might justify their prices against those of other professionals, the fact is the prices spill over to the general public.

    ReplyDelete
  6. An overlooked aspect in the $1000/hr lawyer discussion is that of outsourcing. Outsourcing basic legal work to other countries for cheaper might help companies and firms cut costs to make room for the expensive lawyer.

    See also: http://lawblog.legalmatch.com/2011/03/16/lawyer-salaries-have-breached-the-1000-per-hour-mark/

    ReplyDelete