There is a lot of discussion about the need for lower-cost legal fees. This is an important discussion for lawyers to have, but I think it is also important to stop and reflect on why hiring a lawyer is so expensive in the first place.
The Real Cost of Legal Services
On top of the considerable cost of acquiring a law degree, malpractice insurance, business overhead, etc.—only some of which can be reduced by technology, procedures, and maybe even non-lawyer ownership — I don’t know if the public really appreciates what a lawyer agrees to do for her clients when we sign a retainer. In fact, I think some lawyers need to be reminded. It’s true that many clients just want to get out of jail or a contract or for their insurance company to pay up. But in order to do that, lawyers commit to much more.
What Happens When You Sign a Retainer
After a client signs a retainer with me, I look them in the eye and tell them “Okay, you don’t have to worry about this anymore. Your problems are now my problems.” It is just a thing I say, but it is a true thing I say. My clients go home and sleep soundly for the first time in weeks or months. I go home and think about the legal issues all evening. At night I dream about my client’s case. Sometimes I wake up in a cold sweat and pull up the scheduling order on my phone, convinced I blew a deadline. When I am at the playground with my kids, I check my email in case I get something from opposing counsel or the court. When I go out to dinner with my wife, I talk about hearings and depositions.
You may have heard the story about the lawyer who abandoned his Ferrari in rising floodwaters so he could make it to a hearing. Instead of taking the time to save his car, he abandoned it in order to get to court on time. Everyone was amazed except lawyers, who were like duh. Missing a hearing is not an option. As the lawyer who owned that Ferrari said, “You can’t let the client down, no matter what personal exigencies you might have.”
Lawyers are expensive because you get a lot for your money. You get someone who will abandon their precious supercar — or regular car — in rising floodwaters so he can attend your hearing. You get someone who will lose sleep worrying about your legal problem so you can finally get some rest.
Lawyers have a pretty singular value proposition. We take care of legal problems for our clients. When you sign a retainer agreement, our client’s problem basically becomes our problem. They can go back to sleeping through the night, and you start losing sleep, instead. You worry about where to find the paperwork or file the forms or how to get to the hearing while they go about their daily lives.
[N]obody thinks Facebook will really keep your secrets
This is why comparing non-legal products and services like Apple and Uber and Facebook to legal services doesn’t really work. Nobody would expect an Uber driver to absorb the cost of a parking ticket just so she can pick you up where you want. I’ve known plenty of lawyers who parked illegally to be on time for a hearing and eaten the ticket as a cost of doing business. Nobody expects an iPhone to absorb your stress and nobody thinks Facebook will really keep your secrets. Lawyers aren’t like tech companies, and they probably can’t be.
So as long as that high level of obligation is what you get for your legal fee, the fee can only drop so much. To reduce the cost of legal services past a certain point, you probably have to reduce the lawyer’s obligation to the client.
That is easy to say but another thing entirely to do. Our obligations flow from our rules of professional conduct, most of which we cannot ask a client to waive. All we can do is limit the scope of representation — generally called unbundling legal services. Unbundling can make a lot of sense for some things, but it is not a panacea for lowering the cost of legal services.
If the cost of hiring lawyers is really too great (and I am not convinced that is true across the board), we need other solutions, and they might have to include reducing lawyers’ professional obligations. So, just so we’re clear, when we talk about lowering the cost of legal services, what we are really talking about is fundamentally changing what it means for a lawyer to represent a client.
Originally published 2014-10-23.