Leading attorneys in the U.S. are asking as much as $1,250 an hour, significantly more than in previous years, taking advantage of big clients' willingness to pay top dollar for certain types of services.More at the link.
A few pioneers had raised their fees to more than $1,000 an hour about five years ago, at the peak of the economic boom. But after the recession hit, many of the rest of the industry's elite were hesitant, until recently, to charge more than $990 an hour...
Harvey Miller, a bankruptcy partner at New York-based Weil, Gotshal & Manges, said his firm had an "artificial constraint" limiting top partners' hourly fee because "$1,000 an hour is a lot of money." It got rid of the cap after studying filings that showed other lawyers surpassing that barrier by about $50.
Today Mr. Miller and some other lawyers at Weil Gotshal ask as much as $1,045 an hour. "The underlying principle is if you can get it, get it," he said...
Such rates are contributing to inflation across the $100 billion-a-year global corporate-law industry as the slow economic recovery has left many law firms struggling to finance the hefty pay packages they award their stars. Since most law partners bill roughly 2,000 hours, those asking $1,100 hourly will bring in $2.2 million, a few million short of the $3 million or $4 million in annual compensation star attorneys get at many big firms.
To help fill the gap, the firms rely on the profit they often reap on the work of junior attorneys, or associates. Dozens of associates at a time can work on a single case, and some firms bill as much as $700 an hour for their time, according to Valeo Partners, a Washington consulting firm that maintains a database of hourly legal rates in fields such as litigation, corporate law and intellectual property.
"The underlying principle is if you can get it, get it."
It's a free market. Somebody must figure that's what lawyers are worth.
ReplyDeleteBut the fact that these are bankruptcy lawyers makes me a little suspicious about who is really paying for this. Are the buyers of these legal services just stealing from their creditors?
These attorneys aren't doing personal bankruptcy, they're doing business bankruptcy. There's a huge amount of money to be made in business bankruptcy and, if I understand correctly, the bankruptcy lawyer is placed second in the order of creditors to be paid (after the government).
ReplyDeleteThis excerpt of the article seems a bit hyperbolic. Sure, the big firms may be charging huge amounts, but the article (or at least this selection) doesn't seem to indicate that, like I mentioned above, these are lawyers working on corporate cases. An individual won't be paying $700 an hour to a divorce lawyer, an average estate planning attorney, or a personal injury attorney (unless they get you a really abnormally great settlement/verdict and that's how their contingency fee breaks down).
For more reading on the profession in general rather than just the higher billers, one can start at:
http://www.abajournal.com/magazine/article/what_americas_lawyers_earn
Disclaimer: Though I'm nearly done with law school, I am not an attorney.
I am amused by the language - this is "pioneering" and the pioneers are "compensated". And they say Americans don't do irony.
ReplyDeleteThe implication I get from what is highlighted is that these lawyers are charging TOO much - and so there's a sort of market failure.
ReplyDeleteBut firstly, without really knowing anything about legal costs, what Kanedoras says sounds totally plausible. I do not doubt that corporate bankruptcy is complicated and required time, skill and serious effort from lawyers!
And secondly, I would agree with Paul that the market for lawyers is not exactly lacking in competition. With this amount of money up for grabs - is there really a lack of people who want a piece of this pie?