Law Firm All Stars, Worth Every Penny?
In today’s Wall Street Journal in an article titled Top Lawyers Push Rates Above $1,000 an Hour(subscription required) the author leads the article by noting a “significant increase” in rates from previous years and that the lawyers are “taking advantage of big clients’ willingness to pay top dollar for certain types of services.”
What? Taking advantage of? This is a non story.
These lawyers are the best of the best, the All Stars, their value is determined not by the clients’ budgets but their worth. Big Law, and the business of Big Law is not Socialism or a needs-based organizations where the talents of the best and the brightest are available to whomever, what, shows up first to book their time?
If the market values exceptionalism and the years of experience, dedication and acumen lead someone to be worth more than a peer then they should be paid more without scrutiny, suspicion or spurious debate.
Why is this any different than Albert Pujols holding out for $300M for a 10 year contract? Why is this any different than any other professional athlete at the top of his game being paid more than any other player?
Janine Dascenzo from General Electric rightly says in the article that her company is willing to pay for “unique” expertise. If something is truly unique (one of a kind), $1,000 seems like a bargain!
(See my earlier post on why clients don’t care how much outside counsel charge.)
There are 1,000,000+ lawyers in the United States. As the article notes, about five years ago a “few” lawyers started charging $1,000 or more for their time. Now I imagine that fee has been increased to something like a handful of lawyers; a tiny, tiny percentage of the lawyers out there.
I speak to dozens of lawyers in firms and even more clients on a regular bases. The clients always say that they will pay for the most efficient and best path to resolving a problem. If the solution costs $1,000/hour with one experienced partner instead of three hours of a less experienced lawyer at $550/hour, that’s a 30% savings right off the top. Sounds like a bargain to me. Any in-house counsel who can find a 30% more efficient solution is a hero to its client.
I applaud those lawyers who are so good at their game that their value is higher than 99% of their purported peers. Furthermore I applaud those clients who are lucky enough to have those best of the best lawyers work for them.