KingMidget's Ramblings

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A Saturday Morning Rant

I’m an attorney who never should have gone to law school.  I’m an attorney who can’t stand most other attorneys.  Far too many of them are obnoxious, arrogant, and only interested in how much money they can make.  Litigators play a game in which the point is to hide the truth rather than reveal it.  They are like children who never grew up with how they engage in tit-for-tat warfare in the courts.  (OK.  I’ll admit, there are a lot of generalizations in this paragraph and I typically hate generalizations, but I’m ranting, which means I get to make generalizations.)

I was talking with a friend the other day who commented that she was realizing that she just didn’t want to be an attorney any more.  I know the feeling well.  It is a role I also am eager to end.

I work for a government agency that relies significantly on private attorneys to perform a particular service.  While we get a slightly discounted rate, the rates charged by many of the law firms who are in this field range from $500 to $800.  Per hour.  Yes, that’s right, if you’re a partner in a large firm in this field, you, too could charge $800 per hour for your work.  Most of which is formulaic.  Generally speaking a lot of the transactions are similar in nature.  So, you take the documents for an earlier transaction, change the names and dates and amounts and you’re done.  True, there are frequently twists and turns to the transactions that require a little more thought, but it’s not rocket science and it’s not like every transaction requires a whole new exploration of the applicable law and creating documents from the ground up.

But for this work, partners can charge all that amount.  Over the last couple of years, because of my role, I’ve had to have conversations with some of the private attorneys we work with.  About their fees.  One of the responses I frequently get back has something to do with my not understanding how large law firm economics work.  Too which I want to call bullshit.  Maybe it’s not that I don’t understand how large law firm economics work.  Maybe its that large law firm economics don’t work.

Let’s take the middle of the range I just quoted for partners.  Let’s say a partner can charge $650 per hour for his or her work.  In most of these law firms, the attorneys have mandatory billing requirements.  They must bill a certain number of hours each year to justify their existence in the law firm.  1800 hours per year is on the low end of the scale.  That’s about 35 hours per week, 52 weeks a year.  So, if you want a vacation, you better increase your average to be able to get those two weeks off.  I believe some firms may require as much as 2100 billable hours per year.  That’s 40 hours per week, 52 weeks a year.  Good luck getting that vacation.  Here’s one of the realities of law firm life.  I’m not sure if there is a standard formula for this, but based on what I’ve heard anecdotally, I think it’s safe to assume that the hours in the office will probably need to be about 1.5 times the billing requirement to be able to actually hit the mark.  So, if the requirement is 35 hours per week, plan on being in the office 52.5 hours per week.  40 hour per week requirement — 60 hours in the office.  Either that or you better be incredibly efficient and never talk to your co-workers about the family or what you did over the weekend or take an extended lunch to hit the gym.

So, what’s my point.  Here’s my point.  Let’s go back to $650 per hour.  Let’s cut the difference between the low and high end of the billable hours requirement.  1,950 hours per year.  Do the math.  $1,267,500 generated by that one attorney.  Where the hell does all of that money go and why must the clients pay such an exorbitant amount per hour to produce that amount of revenue for the partner and the law firm?  Seriously.  Now I get that attorneys who work in these large law firms performing the equivalent of brain surgery each and every day (what?  it’s not brain surgery? or even close to it.  oh.  yeah.  right.  It isn’t.) believe they are entitled to a comfortable and wealth-fueled lifestyle.  They work hard, dammit, and deserve it all.

No, actually, I don’t think they do and before they bitch and moan about people like me not understanding law firm economics, maybe they should explain where all that money goes.  Here’s my thinking — give the partner one third of it and he or she gets a little over $420,000 a year.  A great salary by any means.  Then, add in the cost of benefits.  I tried to figure this out — what the standard may be — and couldn’t find it.  However, based on what I could find, I’m going to say it’s 33% of salary.  That’s another $140,000.  We’re at $560,000.  There’s still slightly over $700,000 left from this one partner.  Yes, he or she needs a secretary or assistant, but they are shared with another partner or two.  So, let’s say $50,000 of this partner’s revenue goes towards salary and benefit for an assistant.

We’ve got $650,000 left.  Yes, there are things like rent and insurance and other overhead costs, but really?  $650,000 worth.  I’m struggling with that number.

One more thing … these partners are also making money from the revenue generated by the associates and paralegals.  All of that revenue flows upstream, padding the pockets of the partners.  An associate charging $450 per hour generates almost $900,000 in revenue and may get a salary of $150,000-175,000 (not counting the cost of benefits).  That’s nothing more than an estimate, but I think it’s reasonable.  That means there’s another $600,000-650,000 in revenue going to the firm for every associate that charges that amount.

Law firm economics.  You’re right I don’t get it.  Maybe there’s a bit of bloat there that could be cut to benefit clients and the economy for the rest of the world.  Maybe, just maybe, nobody is worth $600 or $800 an hour.


11 responses to “A Saturday Morning Rant

  1. Green Embers August 31, 2013 at 7:41 am

    Yikes! I could never have made it as a lawyer. I admit it, I am too lazy for that, lol. What’s the point of making all that money if you don’t get to enjoy it?

    • kingmidget August 31, 2013 at 11:19 am

      That’s why I didn’t go the private law firm route. I’ve spent 20 years as an attorney and have had a wonderful life outside of the office.

  2. Charles Yallowitz August 31, 2013 at 7:54 am

    I have to agree with Bradley on all of that. Couldn’t have said it better.

    • kingmidget August 31, 2013 at 11:17 am

      It’s why I never went the private law firm route. I sacrified a bigger paycheck for the opportunity to have a life outside of work.

  3. tjtherien August 31, 2013 at 8:52 am

    I am was certified Workers Safety and Insurance Board Injured Worker Rep. (Paralegal) and also for five years I was a Union Steward (Chief Steward for 3 of those years) what I learned about the law through all of that is that it all comes down to ones ability to reference material. So I agree with you the ability to find something in a book isn’t worth that kind of money… side not I have always represented myself in all legal proceedings and have done as well or have been better off than if I had paid a lawyer

    • kingmidget August 31, 2013 at 11:17 am

      I have often thought that law school which runs for three or four years depending on whether you go full or part time could easily be shortened to two years and maybe even one. Because, again, it isn’t rocket science. Law school, unfortunately, is where the money-grubbing begins. It’s the law schools that are the first money-grubbers. By the time you’re done with your three or four years you’re so in debt you have no choice but to go slave at a law firm for 80 hours a week to earn enough to pay the debt off.

  4. tjtherien August 31, 2013 at 11:45 am

    My schooling was a 2 week course for certification and another two week course for each specialization in injured worker legislation I specialised in early and safe return to work and my courses were paid for buy the union. This allowed me to pick and chose who I represented because unlike a union steward in that capacity I was not obligated to represent anyone. As a Union Steward it is easy enough to find legislation if not in labor laws then in health and safety and human rights. I think the basics of law can be taught in less than a year, perhaps a semester the rest is overkill. Most of the learning could be done on the job. not to offend but legal advice should not ring in at more that $100 an hour. I don’t believe anyone’s wage should be more than ten times the minimum salary. I know this is not a reality, but if it were the ripple effect would improve the quality of life for all. The problem is Higher Learning is a Business and not a public service. What university and college are is a way of indenturing people and debt becomes servitude. Also in charging tuition it makes sense to have inefficiencies in the learning process…

  5. sknicholls August 31, 2013 at 8:24 pm

    My father always told me that I should be a lawyer because I could argue with a stop sign and somehow end up right. I wanted to be a journalist, but ended up becoming a nurse because someone else was willing to pay the cost of my education. No regrets. I am semi-retired now and writing what I want to write, with no deadlines but those I create for myself. Cheers! Have a happy holiday weekend 😉

    • kingmidget September 1, 2013 at 5:27 am

      Interesting. When I started college, I wanted to be a journalist. I took one class and decided I didn’t. I ended up majoring in Government, a more or less useless degree except for people who want to go into politics or are headed to law school. Neither of which I was. I tried grad school and lasted two months. At the time I was working as a secretary at a local law school. So, I gave it a try since I didn’t want to be a secretary the rest of my life. 20 years later, I’ve come up with a handful of other careers I should have chosen.

  6. Vince Dickinson September 1, 2013 at 11:26 am

    The law requires lawyers play a role in many types of transactions. Who makes those laws? From what I understand, most members of legislative bodies are attorneys (too lazy to fact check that).

    • kingmidget September 1, 2013 at 5:40 pm

      It’s illegal to “practice law” without a license. That said, there are also plenty of ways to represent yourself, as you have discovered. Unfortunately, most people don’t have the skill or desire to do so.

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