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

Saying a definition is a description is a total dumbing down. I don't know why they don't teach this stuff in grade school anymore... they should.

A definition must identify the nature of the units, i.e., the essential characteristics without which the units would not be the kind of existents they are.

And

The rules of correct definition are derived from the process of concept-formation. The units of a concept were differentiated—by means of a distinguishing characteristic(s)—from other existents possessing a commensurable characteristic, a Conceptual Common Denominator. A definition follows the same principle: it specifies the distinguishing characteristic(s) of the units, and indicates the category of existents from which they were differentiated.

The distinguishing characteristic(s) of the units becomes the differentia of the concept’s definition; the existents possessing a Conceptual Common Denominator become the genus.

Thus a definition complies with the two essential functions of consciousness: differentiation and integration. The differentia isolates the units of a concept from all other existents; the genus indicates their connection to a wider group of existents.

For instance, in the definition of table (“An item of furniture, consisting of a flat, level surface and supports, intended to support other, smaller objects”), the specified shape is the differentia, which distinguishes tables from the other entities belonging to the same genus: furniture. In the definition of man (“A rational animal”), “rational” is the differentia, “animal” is the genus.

Both are from http://aynrandlexicon.com/lexicon/definitions.html

The same reason professional athletes make so much money even though high schools and colleges are full of kids who want to play for a living. Just having a good lawyer isn't enough - he needs to be better than the lawyer on the other side.

Before we talk too much about why lawyers are so expensive, it's worth checking out how much they actually get paid. It's the weirdest salary chart you'll ever see:

http://www.nalp.org/salarydistrib

Basically it's the sum of two separate curves -- a bell curve centered around $45,000 a year, and a sharp, sharp peak up at $160,000.

What's going on here? Well law is two separate markets -- the bell curve is the 90% of lawyers who compete on cost in a more or less normal market, and the sharp peak is the 10% of lawyers who work at BigLaw firms that march in lockstep at $160,000 for new associates.

So for the 90%, the answer is that law is a highly competitive market. You're paying $150,000 in tuition to get a job that averages $45k a year when you start, and won't go up too fast. You're doing largely hard, boring work, it sucks to do without support staff, and it's time-consuming to do right. If the product costs a lot, it's not because the lawyer is overpaid -- it's because that's how much it costs to produce. Lawyers who drop below that price go out of business.

For the 10%, they're in a weird parallel universe where the cost of their service is almost totally irrelevant to their clients. They're handling international mergers, billion-dollar divorces, and Federal indictments of entire financial firms. The question of whether the lawyers charge $300 or $600/hr is like the question of whether your parachute costs $50 or $100 before you jump out of a plane. If there's the slightest chance that the $100 parachute is safer, you go for it. That's why the starting salaries march in lockstep -- no BigLaw firm can afford to let people think that the cream of the crop from Harvard Law is being hired by their competitors. They'd lose all their business if anyone else had a clear edge. But this only relates to a small minority of lawyers.

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To disclose my own bias, this article/conversation is strange to me because I took a big pay cut to go from programming (which I could do before I graduated from college) to law (where most of my lower salary goes to student loans). I knew I would. I didn't join the BigLaw 10% (which I would have hated), but I'm getting to work on things that matter to me, and I'm proud I made that call. But to see a bunch of programmers talk about why lawyers have it so good ... yeesh.

This isn't to say that law can't get easier or cheaper. There are huge wins to be had from automation here, and I always turn into the resident tools guy wherever I work. I've had to get pretty good at VBA of all things, and 1000 curses on that misbegotten tongue. (Jashkenas, are you listening? Need a project after CoffeeScript?) I also think law school needs to get a lot cheaper -- like college tuition in general, it's been growing at twice inflation for decades, and that can't be right.

One other thought -- the bar is indeed a protected guild, and I'm not sure where I stand on that, but there are reasons for it. First and foremost, you will never know whether your lawyer has done a good job. If you hire a programmer, there may be problems behind the scenes, but you can more or less tell whether they've done what you hired them to do. If you hire a lawyer, and you lose your case, you will often have not the slightest idea whether they were competent -- there's just not enough signal for most laypeople to analyze in most cases. Even my own supervisors often have no idea whether I've done my job right. They ask me a question, I answer it, and without repeating the work I did they have no way of telling whether I'm right or how long it should have taken to complete.

Requiring education, examination and licensing is one way to address that problem. It definitely raises the price. In theory it also lowers the chances that you're buying snake oil. Something to consider anyway.

Thinkcomp, I agree with almost everything you say about the economics of the legal profession, but I think you miss out on something crucial.

Before I went to law school, I unconsciously thought of law as a branch of engineering: Learn the rules, twist the right dials, and things will happen as you expect. That was naive. Law does have rules, and dials to twist, but for socio-political reasons I won't go into here, the rules and dials aren't tightly locked to outcomes. As a result, law has long struck me as being more akin to weather-guessing than to engineering.

I appreciate the passion with which you advocate for decreased barriers to legal information. In many respects, I could not agree more; U.S. jurisprudence is synonymous with hyper-technical mutability, and the public is kept in the dark because of pay walls. But, that marks the full extent to which you and I agree on this matter.

In terms of "institutionalized fraud," you are totally wrong. The legal profession is one of the most heavily-regulated professions that exists today. The duties imposed on lawyers--which are legal obligations to act or refrain from acting--should not be taken lightly. For example, Rule 8.3 of the Model Rules of Professional Conduct[1] (adopted in whole or in part by 49 states) provides:

  (a) A lawyer who knows that another lawyer 
      has committed a violation of the Rules 
      of Professional Conduct that raises a 
      substantial question as to that 
      lawyer's honesty, trustworthiness or 
      fitness as a lawyer in other respects, 
      *shall* inform the appropriate 
      professional authority.

(emphasis added). Note the word "shall:" it means that a lawyer who has actual knowledge that another lawyer (regardless of jurisdiction!) violated the rules MUST report the violation to the appropriate authority.

The reason I explain this rule in particular is because of Rule 1.5, which provides in excruciating detail a lawyer's ability to collect fees from a client.[2] Everything you said is wrong.

Here's the short, plain English version of Rule 1.5: the lawyer must communicate the fee arrangement to the client before the start of representation (except when charging an ongoing client the same rate in subsequent matters). There's a blanket prohibition against "excessive fees" and "minimum fees," and a set of factors used to determine whether a fee is reasonable.

Reasonable fees are judged by time and labor, the issues' difficulty/novelty, the lawyer's experience/reputation/abilities, the nature and length of the lawyer-client relationship, whether the lawyer must turn away other cases, whether it's a fixed or contingent fee basis, and the customarily charged fees. When dealing with contingent fee arrangements, they MUST be reasonable and signed by the client, but may not be used in criminal cases. Similarly in criminal cases, a lawyer may not ask for incentive fees, and is proscribed from taking a percentage of publication rights (i.e. Casey Anthony's lawyer asking for a percentage of any subsequent book deal in exchange for his time) until after all appeals have been exhausted. Contingent fees also may not be used in domestic relations.

When dealing with division of fees in law firms, it's not actually a "division of fees" in the legal sense. The lawyers are salaried employees of the law firm, which is hired to represent the client. Again, when you hire a law firm, you are not hiring a single lawyer; you're hiring the entire firm. Division of fees occurs when a single billing client is covering the fees of two or more lawyers who are not in the same firm. When this happens, division is permitted as long as it's proportional to the services each lawyer (or firm) provides to the client, and the client must agree to this allotment in writing.

Further in this thread, you announced that you should have a right to represent your company in litigation. That's absolutely ridiculous, and in criminal matters in the United States, is dissonant with the Sixth Amendment. In such cases, the corporation has a right to assistance from counsel. Because corporations are fictitious entities incapable of self-representation and thus incompetent, corporate pro se representation is impossible.

But, there are good reasons why a client shouldn't have a right to non-lawyer representation. The Model Rules of Professional Conduct attach an enormous burden to lawyers by compelling them to disclose to the authorities another lawyer's violation therefrom. Without strong industry self-regulation in this form, there would be no way to protect clients from invidious representation.

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[1] http://www.americanbar.org/groups/professional_responsibilit...

[2] http://www.americanbar.org/groups/professional_responsibilit...