Law Firm Fees Defy Economic and Reality Gravity

Ever since I posted my original rant about the over lawyering and overcharging by certain attorneys in the startup ecosystem, I’ve become synonymous with legal fees apparently.

It isn’t all bad.  Our companies are being charged less, lawyers seem a little more likely to negotiate higher bills when the realize I’ll blog about them if they aren’t reasonable and it appears that we’ll have a new investment to announce shortly related to my Law Firm 2.0 series.  (Keep your fingers crossed).

So I guess that I shouldn’t be surprised how many times the same article was emailed to me this week.  According to Law.com, Legal fees continue to rise despite the current economic times and in one case have exceeded $1200 an hour!!!! (White & Case.  Boo.)

The average law firm raised their rates by 4.3%.  Anyone else out there get a raise that big this year?

I’ll take a stand and say this is ridiculous.  I’ve never met a lawyer worth this much per hour.  I might consider one exception for a certain litigator that I know who is incredibly awesome and so efficient with his time that his hourly rate is somewhat irrelevant, but I only know potentially one person in the thousand lawyers that I’ve worked with. 

Shame on you folks.  It won’t last.  Mark my words.  Viva La Law Firm 2.0…

  • eddie

    The rate isn't what's important, it's what they charge you in the aggregate for the service you get. Most firms probably don't do well in this metric. Mark Chandler (Cisco's GC) noted that while he was charged $10k for 2 days of prep work for a congressional hearing by a top notch DC lawyer, that was outstanding value for what he was doing.

    Firms are failing in the value model. If a White and Case partner bills me $1300 for one hour of advice that saves my company $50,000, that is nice value for money. If he bills me $10,000 for $20,000 in savings….not so much. The rates are part of it, but I tend to focus on what I am charged for the value I get. If firms would focus more on the value equation, they (and we) would all be better off.