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Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

forbes.com

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Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#11

Post by bane »

jerrya wrote: post #6

This may not apply to the world of corporate lawyers the answer seems to be about, but at a smaller level, there are enormous switching costs involved in moving away from, and training a new lawyer. And it's not a free market. In a free market, the consumer can walk away from a purchase. Most times individuals or small businesses need a lawyer, they are in no position from walking away. They need a lawyer. And they n…

"They need a lawyer. And they need to stop spending time searching, and get on with resolving. So a lot of claims from lawyers that they operate in a free market are really not true. They mistake what are basically extortion/price gouging rates for free market pricing."

It's interesting because the same fundamental problem is true of health care in the U.S.

It's essentially, "they need a doctor. And they need to stop spending time searching, and get on with not dying"

The market dynamics and model are entirely different with these sorts of emergency industries. It's almost always "first available" and not "best cost". Even with shopping around (when the luxury is available) the decision is perceived quality first, cost second (or lower).

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#12

Post by mirceagoia »

tikhonj wrote: post #9
bonesinger wrote: post #7

This article misses one point, law school is expensive! Students generally will want to pay their 6-figure debts with a matching salary. When you don't have to worry about a huge debt, it allows you to be riskier and try other avenues, such as public interest, or work in small lesser known industries

The article did mention student loans. Also, I can't help thinking that the reason law school can be so expensive is that the students can then get overpaid jobs and pay it back.

The law school is as expensive as the medical school, or almost. While at medical school you can understand the infrastructure you need to teach people, what infrastructure you need when learning law?

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#13

Post by noonespecial »

Part of the reason might also be that the law has become so complex (as well as, in my opinion, intentionally obfuscated) that it demands a certain amount of resources to engage it at all. If you can't meet that level, its best not to engage it at all.

You can't launch a satellite halfway into orbit to save a few bucks. You go all the way, or stay home.

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#14

Post by wtvanhest »

The unobvious but major thing missed is that hiring the wrong lawyer is far more expensive than an additional $300 per hour.

Since the only way to know if you are hiring the right lawyer is to base it on brand, top firms have a lot of pricing power and middle firms dissapear.

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#16

Post by Duff »

A: Because they get other jobs that meet their income requirements.

People who make it through law school usually aren't idiots. So if they fail to achieve a satisfactory career in Law, they move into other areas. Attorneys work in government as political appointees, lobbyists and policy people; they work as corporate managers; they run businesses in areas other than law, etc.

Also consider that the barriers of entry for lawyers are high. Referrals are a huge source of business, so it's difficult to start a new firm without alot of capital.

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#18

Post by bane »

simonbrown wrote: post #4

Surely that's an opportunity for a new firm? The demand is obviously there (plenty of people don't see a lawyer for financial reasons), as is the supply (apparently).

There's a service that used to be called "Prepaid legal" with essentially a small retainer, and a minimum guarantee of services, with favorable rates when the service was used beyond that. It operated basically as a kind of legal insurance.

http://en.wikipedia.org/wiki/LegalShield

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#19

Post by viscanti »

bonesinger wrote: post #7

This article misses one point, law school is expensive! Students generally will want to pay their 6-figure debts with a matching salary. When you don't have to worry about a huge debt, it allows you to be riskier and try other avenues, such as public interest, or work in small lesser known industries

Desired salary is inelastic. Everyone would like to make as much as possible, regardless of debt level or career/education.

If anything, a higher debt load should make someone risk averse, and more willing to take on more lower paying jobs, rather than waiting around hoping for a high paying job. In a situation where there's more supply than demand, those risk averse people should be pushing the overall price lower (there will still be niche situations where price isn't affected).

Having a higher debt load might make you desire a higher salary, but it's real debt and needs to be paid off. Unless you're a member of a cartel who is fixing an artificially high price, competition should come into play and prices should drop.

Re: Why Are Lawyers So Expensive Even With The Excess Supply Of Lawyers?

#20

Post by ig1 »

mirceagoia wrote: post #3
puppop wrote: post #2

Because there are no H-1B lawyers.

Do you think lawyers from other countries know US law? I don't think so. You will pretty much have to start over in US.

You realize there are huge outsourcing industries (in the legal and accounting sector among others) where workers in India, China, etc. are trained to learn American standards, etc.
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