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$700/hr for legal advice vs. $100/hr for a top software engineer – why?

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Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#22

Post by vannevar »

I think this is a transient phenomenon. The software profession is only a few decades old, while there have been centuries of lawyering. Not all lawyers make anywhere near $700/hour; in fact, I'd say the average lawyer probably makes about as much as the average developer. A developer aristocracy has yet to emerge, but as time goes on you'll see rates at the top end rising much faster than the average, and there will be $700/hr developers.

Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#23

Post by itsprofitbaron »

During late 1990s aka. "the dot com boom" there was a severe shortage of corporate lawyers in Silicon Valley due to the deal work exploding with record IPOs, M&A and VC activity etc.

Alongside the shortage, the cost of living in the Bay Area was rising which increased when there was an exodus of lawyers from law firms going to the Bay Area for in-house opportunities at startups. As a result to combat this, Law firms in SF/LA increased their associates pay which was then being matched throughout the rest of the country.

Once this happened it resulted in the increased wages leading to the prices at the level they are because:

- Noone wants to cut their wages - companies also do anything they can to prevent wage cuts even if that means reducing headcount.

- Law firms prestige are linked to money - in order to attract the best talent they compete on price by paying the highest starting salaries and bonuses. Likewise in order to keep the rest of the employees motivated they pay the same salaries across departments. Thus they then had to tackle the issue of the increase overheads so law firms increased their rates to manage increased overheads and to increase profitability of the firm ensuring they keep their best talent around.

However, with that said the reason lawyers are expensive despite the "oversupply" of them is because if you require a law firm with experience that is able to handle complex litigation, transactions etc and is able to allocate a significant amount of man-hours at your case then you're going to have to compensate them in order to do so.

So to answer the question are lawyers expensive, they're not. You can find one to handle basic paper work inexpensively however, if you require an experienced lawyer who can handle complex litigation, complex litigation, transactions etc and is able to allocate a significant amount of man-hours at your case then you're going to have to compensate them in order to do so.

Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#25

Post by grumps »

I think it's already been pointed out but I'll clarify a little more.

You've hired an independent developer, at a reasonable rate.

Hiring a lawyer from a law firm, comes at the rate of the firm. He bring to the table the resources of a large law firm, and along with the cost of operating a law firm. In addition to his nice salary.

If you had hired an tech consulting firm you'd be looking a similar hourly rate if you brought in a partner.

Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#27

Post by gnosis »

I've known network consultants who charged banks and other Wall St firms $2600/hr for troubleshooting. A network outage could easily cost some of these firms millions of dollars per hour, so paying $2600/hr to fix such an outage is petty cash in comparison.

Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#28

Post by djblue2009 »

Even though there may be a surplus of lawyers in general out there, that specific lawyer can charge that much because (this sounds obvious) people are willing to pay that much. If he specializes in a certain area with the potential for a big upside for a client - doesn't have to be monetary - think immigration law (however, usually these clients can't necessarily pay that rate), people are willing to pay for peace of mind and hopefully just once for the job done right.

Re: $700/hr for legal advice vs. $100/hr for a top software engineer – why?

#29

Post by swampthing »

* law firms are inefficient in their use of technology

* legal work is more likely to be boring, so you have to pay people more to do it (this is related to the first point above)

* if an app has a bug, it's usually easy to spot - if a contract has a bug, you may never know about it until it bites you. so you pay for the best attorney you can get, in the hopes of getting fewer bugs

* lawyers are more at the beck and call of their clients - really need something done overnight or over the weekend? they'll do it (though they'll resent you for it)

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