Getting Your Money’s Worth??

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April 7, 2014 by sandyonyourside

Burning dollar signA reader asks, “Is there really a difference between a lawyer who charges $500-600 an hour and one who charges less?”

Yes, there is a difference.  But it may not be worth paying for.

At every level of the legal profession, as in every profession, you’ll find competence and incompetence randomly distributed. You can find a fabulous unknown lawyer who does an amazing job for comparative peanuts, and an older, established lawyer who charges a fortune for dreck.  And vice versa.

But’s it’s important to realize that when you shell out huge bucks for a lawyer, you’re paying for lots of things unrelated to the lawyer’s work for you.  The hourly fee of a very high priced lawyer will always be some combination of reputation premium and overhead expenses, usually for posh offices.  This is especially true when the expensive lawyer is in a large law firm, where he or she will be under pressure to contribute an expected share to the overall profitability of the firm.

What’s more, there’s a good chance that the high-priced lawyer will be only minimally involved in the day to day work on your case.  Like a general contractor, he or she parses out the work to others, while supervising and taking control of overall strategy.  This is a critical role, to be sure.  And it certainly saves you money when the high-priced lawyer delegates routine legal tasks to others.  Still, for the average litigant, the economics often don’t add up.

Think of it in terms of sports. When sports teams shell out baziillions of dollars to enlist an established player, what they are investing in, really, is the player’s past performance. That’s why (except for the Yankees) they’d much rather identify eager, talented lesser-knowns who will save them money while delivering more bang for the buck.

So unless you have benjamins to burn, I see no reason to hire a high-priced lawyer just because you are wowed by the prestige factor.  Remember, there is a glut of lawyers on the market right now.  Solo practitioners and small firms are hungry for your business.  And they won’t ask you to sacrifice an arm or a leg to get it.

‘Til next week,

Sandy

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Disclaimer

This blog is for informational purposes only and does not constitute legal advice. Also, it does not create an attorney-client relationship between the author, Sandy Lundy, and any reader or correspondent.
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