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

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

#201

Post by antonej »

jerrya wrote: post #34
baddox wrote: post #27

Earlier quoted context omitted.

I don't think that becoming dependent on a particular product, service, or supplier makes it "not a free market."

http://en.wikipedia.org/wiki/Free_market#Overview Adam Smith believed that an economy should be free of monopoly rents If I can keep you from switching lawyers, if I can keep you from interviewing other lawyers, if I know your choice is not "lawyer or no lawyer", but "which lawyer", then I can keep my prices artificially (not a free market) high.

There's no way to keep a client from interviewing other lawyers. Moreover, state bar ethical rules entitle the client to fire the lawyer at any time for any reason or no reason. The opposite isn't true; there are strings attached to when a lawyer is permitted to withdraw from the representation.

What this means is that theoretically a large, valuable client can negotiate a multi-year cap on rates or rate increases, etc., which then operates as a multi-year option contract. The client can always choose to switch firms anyway, but also has the value of knowing in advance that the rates at its current firm will go no higher than X in year two or Y in year three.

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

#202

Post by antonej »

baddox wrote: post #90
jerrya wrote: post #34

Earlier quoted context omitted.

http://en.wikipedia.org/wiki/Free_market#Overview Adam Smith believed that an economy should be free of monopoly rents If I can keep you from switching lawyers, if I can keep you from interviewing other lawyers, if I know your choice is not "lawyer or no lawyer", but "which lawyer", then I can keep my prices artificially (not a free market) high.

How do you distinguish between "keeping you from switching" and "it being inherently difficult to switch?" If you buy an expensive car that only runs on expensive and rare fuel (thereby restricting your choice in fuels), is the free market somehow violated? If you buy a Gillette razor that only works with Gillette blade cartridges, is the free market violated? I find the distinction rather fuzzy.

Good point. Lawyers and firms have few (if any) tools at their disposal to keep a client from switching firms. The inherent switching cost is fairly high for some matters, but firms that are sophisticated know how to compensate on the front end in a way that makes it easier for a potential client to switch to them.

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

#203

Post by ubervero »

wavephorm wrote: post #63
nextparadigms wrote: post #8

Any way this market can be disrupted? Maybe through some more efficient/decentralized/AI-based services that would do much of the lawyer's jobs, forcing them to reduce their billing rates?

Docracy was posted to HN recently: http://news.ycombinator.com/item?id=3666478 It's really limited or just starting out, no EULA's or anything that I can personally actually use.

Yep, we're getting started, but we might get an EULA soon, stay tuned

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

#204

Post by philwelch »

rbarooah wrote: post #187
philwelch wrote: post #186

Earlier quoted context omitted.

Internationalization is a valid point, but I'm not too choked up about my witch doctor not being allowed to perform open heart surgery. Besides, he would probably rather prescribe me water or stick needles in me instead.

Sarcasm aside, you're missing the point. Why isn't it sufficient to regulate the title 'Doctor' without preventing other practitioners from practicing? People who wanted a traditional medical practitioner would be protected, and those who were willing to take more risk would have the choice.

Homeopaths and acupuncturists don't even do normal medical procedures; that's kind of the point. If you are doing normal medical procedures, you should be licensed and regulated to make sure you know what the hell you're doing. The freedom to have an unlicensed witch doctor perform open heart surgery on you isn't an essential human right; it's not even something a sane and informed person would want to do. It's a non-issue.

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

#205

Post by physicslover »

joshuaheard wrote: post #184
ShabbyDoo wrote: post #74

There is one restriction in particular which I believe has a huge effect on the legal industry's slow pace of change -- only lawyers may own companies which provide legal services to clients (vs. in-house counsel). So, want to start an online, virtual law firm? Either act as a referral service or make sure you never want a non-attorney to have equity in your company. Why does this rule exist? I haven't a clue.

This is true for most state-licensed professionals like doctors and accountants. There are two main reasons for this. The first is that a non-licensed person could easily bypass the license rules by affiliating with a licensed person in name only and doing all the work requiring a license. The second is that licensed professionals have ethical and professional duties to their clients that they are taught as part of t…

I don't believe this is true for doctors, although, I could be wrong but I think HMO's get around the restriction. The bottom line is that lawyers are a protected guild with rules like the one mentioned above that artificially inflate the value of their services.

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

#206

Post by tomkarlo »

chii wrote: post #174
tomkarlo wrote: post #156

Earlier quoted context omitted.

> That's easy. The expense of a car or plane doesn't indicate it's safety, infact it's usually the opposite, the more expensive the car or plane the faster it goes and less safe it can make your trip. > With a doctor or lawyer more often than not the more you pay the better the service/advice you get. Do you know this, or do you just believe / hope this? I'd argue that the actual quality of service delivered (not jus…

If there exists a system of rating a lawyer's performance (e.g., distill their success rate to a %), then comparisons can be made between lawyers even if the layman don't understand the law.

Yeah, but it's unclear what constitutes "success" in the case of a lawyer.

If you're a litigator, much of that will depend on the facts in a particular case. If you're drafting a contract or financing doc, it may never end up in litigation, so you'll never find out if it was a "good" contract or a "bad" one.

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

#207

Post by tomkarlo »

chollida1 wrote: post #193
tomkarlo wrote: post #156

Earlier quoted context omitted.

> That's easy. The expense of a car or plane doesn't indicate it's safety, infact it's usually the opposite, the more expensive the car or plane the faster it goes and less safe it can make your trip. > With a doctor or lawyer more often than not the more you pay the better the service/advice you get. Do you know this, or do you just believe / hope this? I'd argue that the actual quality of service delivered (not jus…

> Do you know this, or do you just believe / hope this? Good question, the answer is obviously I can't say its' true for 100% of the cases but do this thought experiment. You are going to court against someone else, you get a public defender, your opponent brings in a team of 10 lawyers costing $100,000 a week. If the evidence makes the case look like its 50:50. What is your chance of success? I think almost everyone…

It's easy to do that thought experiment at the extremes, but that's not what the article is about. It's talking primarily about corporate law, and a public company isn't going to hire a public defender.

More realistically, you're a company and you choose a $400/hr law firm instead of a $600/hr law firm. Are you necessarily going to get worse advice? I'd argue that would often just depend on how much experience each firm has in the particular subject you're hiring them for - and neither firm is adjusting their rates based on that.

Just yesterday I came across a situation where a major law firm was working as investor counsel on a type of deal they almost never advise on (because they're the clients usual firm for other types of deals) - I'm sure they didn't offer the client a discount because they have less experience than a lot of cheaper, less prominent law firms.

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

#208

Post by [deleted] »

chollida1 wrote: post #193
tomkarlo wrote: post #156

Earlier quoted context omitted.

> That's easy. The expense of a car or plane doesn't indicate it's safety, infact it's usually the opposite, the more expensive the car or plane the faster it goes and less safe it can make your trip. > With a doctor or lawyer more often than not the more you pay the better the service/advice you get. Do you know this, or do you just believe / hope this? I'd argue that the actual quality of service delivered (not jus…

> Do you know this, or do you just believe / hope this? Good question, the answer is obviously I can't say its' true for 100% of the cases but do this thought experiment. You are going to court against someone else, you get a public defender, your opponent brings in a team of 10 lawyers costing $100,000 a week. If the evidence makes the case look like its 50:50. What is your chance of success? I think almost everyone…

[deleted]

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

#209

Post by chollida1 »

tomkarlo wrote: post #207
chollida1 wrote: post #193

Earlier quoted context omitted.

> Do you know this, or do you just believe / hope this? Good question, the answer is obviously I can't say its' true for 100% of the cases but do this thought experiment. You are going to court against someone else, you get a public defender, your opponent brings in a team of 10 lawyers costing $100,000 a week. If the evidence makes the case look like its 50:50. What is your chance of success? I think almost everyone…

It's easy to do that thought experiment at the extremes, but that's not what the article is about. It's talking primarily about corporate law, and a public company isn't going to hire a public defender. More realistically, you're a company and you choose a $400/hr law firm instead of a $600/hr law firm. Are you necessarily going to get worse advice? I'd argue that would often just depend on how much experience each f…

> It's easy to do that thought experiment at the extremes, but that's not what the article is about. It's talking primarily about corporate law, and a public company isn't going to hire a public defender.

Hmm, yes you are right.

Point conceded.

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

#210

Post by ktizo »

javert wrote: post #199
ktizo wrote: post #139

Earlier quoted context omitted.

"Most people are other people. Their thoughts are someone else's opinions, their lives a mimicry, their passions a quotation." As quoted from Oscar Wilde, so this post might be recursive ;)

ktizo, I don't know why I'm indulging your crusade of hunting down my posts and hurling arbitrary insults. In fact, I'm not going to do so anymore. Because I'm human, it could be the case I haven't thought things through carefully, but it's not simply not the case.

I wasn't hunting down your posts, was just continuing the thread.

And I don't think I was being arbitrary. When challenged on your point you merely pointed to the quotes you had made and told people to read the book, which to me is pure dogma.

So admittedly I got a bit snarky. Although I was also attempting to be a bit self critical, which was why I referenced that quotation.

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