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Why are lawsuits so expensive if there are so many broke lawyers aching for a job? It seems like a company could pay them a middling salary of $70k/year to hand

Why are lawsuits so expensive if there are so many broke lawyers aching for a job? It seems like a company could pay them a middling salary of $70k/year to handle ongoing lawsuits, rather than the $300-$700/hour that other lawyers demand. Obviously not for your big Oracle vs. Google lawsuits or where the entire company is riding on it, but for anything less than that. For example, every public company gets sued by opportunists every time there's a merger or acquisition, or every patent troll expects nobody to fight their case because it's so expensive. There's lots of little things that come up where you just need someone to do the paperwork. It seems like you could hire a couple broke lawyers to fight patent trolls, and the cost wouldn't run into millions when your attorney books a ton of hours. I've considered using paralegals to write up paperwork to be reviewed by an actual lawyer. But it seems like there should be a 'cheap broke lawyer' option in between the two, who would probably do a fine job.

WalterBright 10y ago
I don't understand this, either. If there is a glut of lawyers, why are their rates so high?
- rayiner 10y ago
  People don't hire lawyers without real-world experience. The supply of lawyers with experience is much smaller than the supply of JDs, because there are only so many opportunities to file briefing or argue in court.
  - tnecniv 10y ago
    Alternatively, if you are a participant in a hundred million or billion dollar loan, you aren't going to hire some green lawyer fresh out of law school to represent you. You're going to get the guy who has written dozens of these contracts.
wp1 10y ago
This is exactly what most companies do. They hire in house counsel for their baseline, routine legal needs. And then outsource to biglaw for peak law stuff (litigation, big transactions). In house counsel salaries are way less than those at a top law firm and you don't have to pay the difference between the firm's billings and what an associate--who's actually do the work-- gets paid.
- gumby 10y ago
  > In house counsel salaries are way less than those at a top law firm Just to expand: in house counsel gets a salary and doesn't have to do the business-building that a partner at a law firm has to. Also for tech companies, in house counsel can get stock options. In the 2000 boom this caused mass defections of gold-digging lawyers from traditional law firms, which screwed them up too (boo hoo). Not that very many startups need any in house lawyers!
  - tluyben2 10y ago
    > Not that very many startups need any in house lawyers! This is not meant as a flaming comment as I do not know enough about it but in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. I have been through a bunch of legal cases in the Netherlands and here no party wins usually in business cases. Even if you win you do not really win money so most cases just settle for a few bucks or win for the same few bucks at more legal cost. You get nominal expense back if you win aka if you pay E300 per hr for your lawyer then if could be you get E70/hr back. I do not know the exact numbers but it's basically mostly a loss for all which is why it happens very little and no one is really afraid of it.
    - gumby 10y ago
      >> Not that very many startups need any in house lawyers! > [...] in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. Don't worry, it's not as bad as it looks. I do see a lot of lawyers running up the bills at the expense of inexperienced entrepreneurs. That really ticks me off. In the first few years of a startup my legal bills are typically under $15K/year -- well under. Setting up the company doesn't cost much, and apart from some minor routine stuff (the odd employee termination mainly, plus a few contracts and the like) there just isn't much legal stuff to do. An A or B round financing shouldn't cost more than $20K even in the valley. In fact legal bills can be lower in the valley because the firms are used to doing the kinds of thing you need. Patent stuff is more expensive but again, most companies have no need to bring that in house. If you hire some overseas people you'll need some legal help but you wouldn't bring that in house. Some businesses do have an explicit legal needs (e.g. Uber) if they are going after a regulated industry. But, for example, one of my startups developed a drug and got it into clinical trials -- even though it's a highly regulated field there was no need for in house counsel, and actually the legal part of that was not huge. If you get sued you'll hire an outside firm that specializes in litigation.
dctoedt 10y ago
> It seems like you could hire a couple broke lawyers to fight patent trolls, and the cost wouldn't run into millions when your attorney books a ton of hours. That's approximately like saying you could hire a couple of broke developers to build a software package upon which much of your company's success will depend. Both the 10X-productivity phenomenon [0] and the FizzBuzz Problem [1] can show up in law just as much as in software development. [0] E.g., http://programmers.stackexchange.com/questions/179616/a-good-programmer-can-be-as-10x-times-more-productive-than-a-mediocre-one http://programmers.stackexchange.com/questions/179616/a-good... [1] E.g., https://blog.codinghorror.com/why-cant-programmers-program/ https://blog.codinghorror.com/why-cant-programmers-program/
- cbr 10y ago
  There are many more broke lawyers than broke developers. (But do think you're right that they're not the bargain they already to be.)
- deleted 10y ago
  [deleted]
yompers888 10y ago
To add to this: The law market is a quickly-narrowing pyramid for the top jobs. If you're a top 10% (ish) grad from a top 20 school, you can get a high-paying job with one of the big firms. For 10 or so years you work super long hours for maybe 120-150k. Then after about a decade, maybe 5% of those get offered partner. Everyone else gets sent out; best case in that situation is getting an in-house counsel job at about half the pay you had before. Or you could be a public defender, for probably less money than a teacher makes. Source: my dad works at a top 25 law school and my brother works at a firm in DC (there's probably some attenuation here)
maxxxxx 10y ago
Very true. Where are the lawyers that will work for a measly $80/hr? The same amount which makes a lot of freelance programmers very happy.
- mac01021 10y ago
  Do members of both professions find clients with equal ease and reliability? A plumber or an electrician bills at a rate closer to double that, but i think it's partly because work is less steady.
  - maxxxxx 10y ago
    I am pretty sure that a lawyer who did good work for $80/hr would be in high demand.
rhino369 10y ago
Lawyers out of law school have a pretty hard time practicing on their own. A lot of these broke lawyers never get a substantive job and never really become lawyers. You can hire these people but you need someone to manage and train them. You need an expert. The cheaper fields of law pretty much do that. Personal injury, traffic and dui, immigration, insurance defense etc. will take broke lawyers and pay them shit. They bill out at ~200 dollars an hour, but don't collect anywhere near 40 hours a week. The associates are getting paid in the 50k a year range. There are good reasons most companies don't try to do litigation in house. Litigation comes and goes and isn't steady. I'm defending a medium sized company on a patent case. But they have a patent case maybe 2-3 times a decade. During certain parts of the case we'll need 2-3 associates working full time. But a year ago they had no need for even one patent litigator. Plus certain parts of the case are hard to handle with in house lawyers. They might be forbidden to see certain confidential documents. Another big difference is that law is specialized. A guy who does DUI defense doesn't have the slightest idea how to do a patent troll case. And a patent lawyer can't do a DUI case. Once you gain that experience you aren't a broke lawyer anymore.
- chii 10y ago
  > you gain that experience you aren't a broke lawyer anymore. so basically you're saying they are broke because their education isn't actually adequate for the sort of work they would be undertaking.
  - ajkjk 10y ago
    That's pretty common. Doctors don't really learn to be doctors in any sort of independent way until after their residencies. Certainly not from med school alone. And I can attest that as an entry-level engineer with a CS degree, I was a totally useless person to assign a project to. It was several years before I could be handed something and expect to do it well at an enterprise level.
  - deleted 10y ago
    [deleted]
  - punctilio 10y ago

WalterBright 10y ago

I don't understand this, either. If there is a glut of lawyers, why are their rates so high?

rayiner 10y ago
People don't hire lawyers without real-world experience. The supply of lawyers with experience is much smaller than the supply of JDs, because there are only so many opportunities to file briefing or argue in court.
- tnecniv 10y ago
  Alternatively, if you are a participant in a hundred million or billion dollar loan, you aren't going to hire some green lawyer fresh out of law school to represent you. You're going to get the guy who has written dozens of these contracts.

wp1 10y ago

This is exactly what most companies do. They hire in house counsel for their baseline, routine legal needs. And then outsource to biglaw for peak law stuff (litigation, big transactions). In house counsel salaries are way less than those at a top law firm and you don't have to pay the difference between the firm's billings and what an associate--who's actually do the work-- gets paid.

gumby 10y ago
> In house counsel salaries are way less than those at a top law firm Just to expand: in house counsel gets a salary and doesn't have to do the business-building that a partner at a law firm has to. Also for tech companies, in house counsel can get stock options. In the 2000 boom this caused mass defections of gold-digging lawyers from traditional law firms, which screwed them up too (boo hoo). Not that very many startups need any in house lawyers!
- tluyben2 10y ago
  > Not that very many startups need any in house lawyers! This is not meant as a flaming comment as I do not know enough about it but in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. I have been through a bunch of legal cases in the Netherlands and here no party wins usually in business cases. Even if you win you do not really win money so most cases just settle for a few bucks or win for the same few bucks at more legal cost. You get nominal expense back if you win aka if you pay E300 per hr for your lawyer then if could be you get E70/hr back. I do not know the exact numbers but it's basically mostly a loss for all which is why it happens very little and no one is really afraid of it.
  - gumby 10y ago
    >> Not that very many startups need any in house lawyers! > [...] in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. Don't worry, it's not as bad as it looks. I do see a lot of lawyers running up the bills at the expense of inexperienced entrepreneurs. That really ticks me off. In the first few years of a startup my legal bills are typically under $15K/year -- well under. Setting up the company doesn't cost much, and apart from some minor routine stuff (the odd employee termination mainly, plus a few contracts and the like) there just isn't much legal stuff to do. An A or B round financing shouldn't cost more than $20K even in the valley. In fact legal bills can be lower in the valley because the firms are used to doing the kinds of thing you need. Patent stuff is more expensive but again, most companies have no need to bring that in house. If you hire some overseas people you'll need some legal help but you wouldn't bring that in house. Some businesses do have an explicit legal needs (e.g. Uber) if they are going after a regulated industry. But, for example, one of my startups developed a drug and got it into clinical trials -- even though it's a highly regulated field there was no need for in house counsel, and actually the legal part of that was not huge. If you get sued you'll hire an outside firm that specializes in litigation.

dctoedt 10y ago

> It seems like you could hire a couple broke lawyers to fight patent trolls, and the cost wouldn't run into millions when your attorney books a ton of hours. That's approximately like saying you could hire a couple of broke developers to build a software package upon which much of your company's success will depend. Both the 10X-productivity phenomenon [0] and the FizzBuzz Problem [1] can show up in law just as much as in software development. [0] E.g., http://programmers.stackexchange.com/questions/179616/a-good-programmer-can-be-as-10x-times-more-productive-than-a-mediocre-one http://programmers.stackexchange.com/questions/179616/a-good... [1] E.g., https://blog.codinghorror.com/why-cant-programmers-program/ https://blog.codinghorror.com/why-cant-programmers-program/

cbr 10y ago
There are many more broke lawyers than broke developers. (But do think you're right that they're not the bargain they already to be.)
deleted 10y ago
[deleted]

yompers888 10y ago

To add to this: The law market is a quickly-narrowing pyramid for the top jobs. If you're a top 10% (ish) grad from a top 20 school, you can get a high-paying job with one of the big firms. For 10 or so years you work super long hours for maybe 120-150k. Then after about a decade, maybe 5% of those get offered partner. Everyone else gets sent out; best case in that situation is getting an in-house counsel job at about half the pay you had before. Or you could be a public defender, for probably less money than a teacher makes. Source: my dad works at a top 25 law school and my brother works at a firm in DC (there's probably some attenuation here)

maxxxxx 10y ago

Very true. Where are the lawyers that will work for a measly $80/hr? The same amount which makes a lot of freelance programmers very happy.

mac01021 10y ago
Do members of both professions find clients with equal ease and reliability? A plumber or an electrician bills at a rate closer to double that, but i think it's partly because work is less steady.
- maxxxxx 10y ago
  I am pretty sure that a lawyer who did good work for $80/hr would be in high demand.

rhino369 10y ago

Lawyers out of law school have a pretty hard time practicing on their own. A lot of these broke lawyers never get a substantive job and never really become lawyers. You can hire these people but you need someone to manage and train them. You need an expert. The cheaper fields of law pretty much do that. Personal injury, traffic and dui, immigration, insurance defense etc. will take broke lawyers and pay them shit. They bill out at ~200 dollars an hour, but don't collect anywhere near 40 hours a week. The associates are getting paid in the 50k a year range. There are good reasons most companies don't try to do litigation in house. Litigation comes and goes and isn't steady. I'm defending a medium sized company on a patent case. But they have a patent case maybe 2-3 times a decade. During certain parts of the case we'll need 2-3 associates working full time. But a year ago they had no need for even one patent litigator. Plus certain parts of the case are hard to handle with in house lawyers. They might be forbidden to see certain confidential documents. Another big difference is that law is specialized. A guy who does DUI defense doesn't have the slightest idea how to do a patent troll case. And a patent lawyer can't do a DUI case. Once you gain that experience you aren't a broke lawyer anymore.

chii 10y ago
> you gain that experience you aren't a broke lawyer anymore. so basically you're saying they are broke because their education isn't actually adequate for the sort of work they would be undertaking.
- ajkjk 10y ago
  That's pretty common. Doctors don't really learn to be doctors in any sort of independent way until after their residencies. Certainly not from med school alone. And I can attest that as an entry-level engineer with a CS degree, I was a totally useless person to assign a project to. It was several years before I could be handed something and expect to do it well at an enterprise level.
- deleted 10y ago
  [deleted]
- punctilio 10y ago