Baltimore Business Daily - Why do lawyers charge so much per hour? How do they justify it?

Why do lawyers charge so much per hour? How do they justify it?

One of my friends is going through a divorce and her lawyer charges $400 per hour!!! Is that normal? How do lawyers justify charging so much money per hour when people normally make $10-20 per hour? Just really curious about this.

Public Comments

Unlike regular people, lawyers aren't working all the time throughout the day, so they charge a lot of money for the one hour.
I am going through the process of qualifying in England. It takes years. That's how it is justified.
They go to school a lot longer than most, and depending on how good they are, they charge more for their services.
They put the time into getting their degree. If it was so easy everyone would be a lawyer and the prices would be dirt cheap. Same thing as a doctor.
You are paying for the responsibility of the decisions and position, just like with a Doctor.
They have to go to school for 7 years to become a lawyer. Also, when you hire them, it's not like paying an employee a set wage. You are also paying them to cover their insurance, retirement, utility bills, etc. $400 sounds a bit steep, though. However, for comparison, people pay me $150 per hour for my computer support technicians and engineers. I pay them, on average, around $25 per hour, and the rest is used to run my business. Trust me, I am not getting rich. I pay my best engineer more than I pay myself.
They charge a lot because they Can! And dont have to justify it.
Law is a difficult profession, and expensive to practice. An attorney one told me that being a lawyer means "taking care of other people's headaches". That's why they charge so much.
For one thing, they have to do other things for your friend's case when your friend is not around, and they have overhead such as a secretary, office, etc. And for another thing, professionals with advanced degrees do not normally make $10-20 per hour. You should compare a lawyer more to a doctor, dentist, or pharmacist.
I estimate that they spend SO many hours in college. So they get paid!! Teachers should get more for the hours at work and out side of work. Should be more equal. I do like lawyers though.
People who make $10 per hour usually have no specialized training. It takes a lot of time and money to go to law school. It also takes a lot of skill to be an effective lawyer. You also have to consider the fact that they have a paralegal, secretary and other office expenses to pay. You could probably find a cheaper lawyer but you will get what you pay for.
It is smart to be an astute buyer of legal services. Did your friend price shop for other lawyers? For divorce it makes a huge difference if the parties are in disagreement or not. For a simple divorce a lot of attorneys charge a $1,500 flat fee to do the paperwork. Also, if your friend met the income requirements she may qualify for legal aid and get an attorney for free, this kind of info is available at most court houses. I just talked to a woman a month ago that was paying $350 per hour to a divorce attorney who qualified for a legal aid attorney for free, stupid. Also, filing for divorce is not rocket science if you and your soon to be ex-spouse agree on everything you can do it yourself for free, the probate court have clerks and forms that can help you. It gets expensive when the parties fight over usually money or children. If the the parties are even a little bit intelligent they will realize it is their best interest to work things out between themselves as much as possible otherwise the lawyers will end up with all their money. The only time I would pay serious money for an attorney would be if you are rich and have serious finances to deal with, one spouse is physically abusive and/or stalker, you cannot agree on custody of the kids. Even then you can save serious money by not fighting, it just makes attorneys rich. You can definitely find decent divorce attorneys for $200 an hour in most places and you can negotiate fees in most cases, remember there a ton of lawyers. I am an attorney and I almost got a divorce. I called several lawyers for an initial consultation, yes attorneys use attorneys for their own legal problems most of the time, and I got quoted anywhere from $600 to $50 for an initial consultation. I went with the $50 guy and he told me pretty much what I knew. I negotiated with him and he told me it would cost around $2,000-$3,000 to do the divorce, and that would be the total fee for my wife and I. My wife did not want to spend a lot on attorneys so we pretty much agreed on everything ahead of time. My marriage ended up being saved so I was just out the $50, lol. SO if you pay an attorney an arm and a leg for legal services is he or she going to take the money? Yes, but as I have pointed out most people can get a divorce for under $3,000 with legal representation or free if they income qualify or do it on their own. As for the other part of your question, attorneys charge a lot because they are running their own business or being billed out by someone that owns the business. They do not get to keep all that money and they are not constantly billing $400 every hour they are at work. They pay for secretaries, copiers, rent, suits, advertising, bar dues, malpractice insurance, etc. If you run your own business and you gross $20 an hour you will be out of business soon. But having said all of this $400 does seem expensive but it depends where you are also. If you are in New York City you will pay more than if you are in the middle of Alabama. Still you can probably find a decent attorney for $200 an hour where ever your are, there are so many attorneys begging for clients, but you have to be a smart shopper. Just to prove my point, here is a link http://www.kaleslaw.com/flatfee.htm to a Virginia attorney that will perform a whole divorce for the flat fee of $500 under certain circumstances and for more complicated divorces say with kids he charges $1,000, if the parties are in agreement. Flat fees are used all the time by attorneys for divorce, bankruptcy, immigration, real estate, criminal law, and it is not at all illegal.
A lawyer's hourly billable rate is based on his or her educational background, years of experience, professional reputation, area of practice and location. $400 for a matrimonial lawyer is not unusual in most metropolitan areas if the attorney has 5-10 years of experience with a good track record. At the same time a similar lawyer in a more rural area might charge a lot less than that by the hour. It is not reasonable to compare a lawyer's hourly rate to people who make $10-20 per hour. Positions that pay $10-20 per hour generally do not require graduate degrees that require over $100,000 in tuition and 3 years of formal studies to acquire and several year or decades even of practice and development of expertise in the field. Further, it's not analogous to compare what a lawyer charges a client to what an employer pays an employee. Just as what any other business charges for its product or services is not just based upon what it has to pay to its employees, a lawyer's billable rate has to be based on similar factors. The client charge is allocated not only to the lawyer's take home pay, but to overhead (rent for office space, utilities, office equipment, support staff, employee benefits, business insurance, court costs etc.). With that in mind, a $400 billable rate will often be reduced to about $150-200 per hour that nets into an actual attorneys take home pay after covering business expenses which when factored with the previously mentioned educational and work experience requirements really requires no further justification. As an aside, until the late 1970's, for the most part, lawyers did not charge for their services by the hour. In 1975 the Supreme Court held that the then used practice of charging set fees for legal services constituted price fixing and was a violation of antitrust laws which resulted in the law industry switching to services based on hourly billing.
OkieRoad's response is right on. Even a doctor with some 8+ years of training has to charge a high hourly rate due to the specialized training and many years of no income during the course of study. The justification of a divorce attorney's high hourly is commensurate with the many years of specialized training and had not your friend not engaged such a highly paid specialist, they would not have achieved a divorce with a noticeable advantage. Good luck!