Ways That Startup Lawyers Overcharge

As for #4 and #7, as a client you can probably get concessions given that it's a buyer's market for legal services right now.[1] But generally, I think those practices are legit. The cost of training is baked into the price of every product you buy, and legal services is no different. With regards to #7 specifically, that tends to be a situation where the junior lawyer who doesn't say anything on the call will be the one doing whatever work comes out of the call. It will cost you more money in the long run if he or she isn't on the call and has to get a download after the fact.

A better approach is to communicate via e-mail when possible and communicate directly with the associate doing your work unless the partner needs to be involved. This is kind of related to #2 and #10. Where I used to work, mid-level and senior associates would handle the day-to-day communications with the client for securities offerings or credit agreements worth tens of millions of dollars. If you retain a large firm where an associate will be doing most of the work on your matters, then find a team where the partner in charge is good at delegating the day-to-day stuff so you don't have to incur his higher rates for that sort of thing. Alternatively, depending on your needs, you might find a small outfit or even a solo practitioner who will be doing most of the work on your matter himself or herself, and doesn't need to deal with the inherent overhead of delegation.

[1] Given that, it might just be easier to skip the nitpicking and ask for a 10% discount on the final bill.

PS: What do people here thing about fixed fee arrangements? I'm not sure how they should be structured for a startup, but that would avoid a lot of the silliness inherent in billing. At the end of the day, there is a price to legal services based on supply and demand. Whether you charge for law students or raise the top line fee or give an across-the-board discount is ultimately cosmetic.

You are making a statement of fact based on your perspective. You could be right. My thoughts are based on many years in business, what I have experienced, and what I have observed. [1]

"The aim should be helping that company to get to a stage that they can have a big exit"

Except that it's a lottery and the attorney probably realizes that they have to make hay while the sun shines (or whatever that expression is). Most companies won't progress and won't have big exits, right?

Now if you want to argue that by doing this enough startups will be offended to the point that they won't refer business to them that might be a valid criticism. But in a world where people forget the price and remember other things (like results or even the way they are treated) I'm not sure that is the case (although it could be).

"Lawyers often seem to pass on charges that in any other industry would be considered a cost of doing business. "

What do you mean by any other industry? Are you saying that there aren't consultants that do the same thing? There are.

As far as those industries that don't do that it's because they are charging for a product or service that has certain bounds already set and baking in their costs into that. Law is charged generally by the hour. So it makes sense to break out those costs. Or they have certain methods that have billed over time that are not easy to change. My accountants don't charge when they write a letter because it's not what accountants do. But they charge me a fixed rate for services also.

And, in fact, I'd rather hire a painter and say "give me an hourly rate and I'll buy the paint and supplies for you" that way I don't have to worry that he is estimating to high and baking that into the price.

"The main cost should be the rate rather than the ancillary services and expenses."

If we can assume that if they have to eat things that they previously passed on, in order to make the same profit they will then have to either a) charge more per hour or b) bill for more hours, right? Unless you are arguing in general that "lawyers make to much money" which is an entirely separate argument.

[1] Now I once had a case where an attorney charged me for fedex overseas that the opposing side requested and made me pay for it. I said "why did you charge me" and he said "that's what attorneys do for each other". My thought was "why do I have to pay money so you can maintain a good appearance with that attorney"? But when you think about it if the attorney on the other sides sees that your attorney has a cheap client they will also know that that client won't want a long dragged out case which runs up legal bills. And they will use that to their advantage. I know this because I have done that to my advantage in situations (both legal and non legal). After all nobody wants to go against a deep pockets client. (This doesn't cover every possible pro and con but only illustrates that there are dynamics that you might not think of.)