[PatentTroll]

The legal services industry is not a free market. There, I said it. First, the value (i.e. "provide better value") is opaque. That's why the legal industry relies so much on the proxy of prestige, because it's really hard to know if you are getting good representation, and then it's even harder to know if the cost is "fair" or whatever. The pricing structure is obfuscated and hidden, comparison shopping is hindered by ethical conflicts, and the billing practices (the dreaded billable hour) are asinine. The industry relies much more on personal relationships and perceived prestige than "value for the cost." And the demand in many areas of law is inelastic, and supply is...well, it's complicated by the whole obsession with 'prestige' and student loan debt.

Basically, no, the normal rules DO NOT APPLY to the legal market. And being 'cheaper' is usually not a good thing for a lawyer when dealing with big corporate clients. Less expense translates to lower perceived prestige, something this industry is obsessed with.

And to your last suggestion, here's the problem. There leverage in the law firm model is billing more hours by more associates and staff. The way that a partner makes more money is to have more people working under him, classic pyramid structure. If you eliminate the associates, the partner makes less money. Now, you might say, why not then charge more for the partners time? Because it's way easier to charge 3x associates at a going rate than a single partner at a 2x rate. Because clients see that big scary hourly number at balk, say that some other law firm doesn't charge that much, and why are you worth that much an hour. It doesn't work, even if the same amount of work gets done at the same price. And, the only measure of "amount of work" that lawyers have is billable hours! So a client would see a higher rate for less work. They don't take kindly to it.

I'm not defending any of the above, I hope you realize. I am frustrated with the industry because there are soooo many gains to be had here. It's absolutely silly how backwards and inefficient most law firms are.

[rayiner]

The legal industry is tremendously competitive. Even if you limit yourself to the most "prestigious" firms, there's dozens of potential choices. Even the largest firms have only a couple of percent market share. How many other industries can you say that about? The information asymmetry issues you mention may be true to the extent you're a small company that needs counsel for one matter. But the vast majority of corporate work is done for big corps who are repeat players. They have extremely detailed data at their fingertips about how much their dozens of previous representations cost, outcomes, etc.

[jacquesm]

> The legal industry is tremendously competitive.

That's got to be one of the funniest things on HN ever.

The hell it is. The fact that dozens of potential choices exist does not mean a market is competitive, you are missing the possibility of price fixing on an industry wide scale.

[rayiner]

The existence of dozens of competitors is the #1 marker of a highly competitive market. I'm not sure what basis you have for raising "the possibility of price fixing on an industry wide scale" (other than that is theoretically possible in any market). In my experience pitching big companies for legal matters, the process is quite formalized. When presented with a new matter, a company will interview several firms to give presentations on how they would handle the matter and how they would price the engagement. That is just how the process works even at the largest, most reputable corporate firms. (A partner I used to work for at one of the big New York firms told me that when he started at the firm, "business development" meant a partner checking his voice mails when he got back from lunch. That's not how the industry works anymore.)

[jacquesm]

Even the worst lawyers still charge 100's of $/E per hour and to get certain services performed you have to go through a lawyer.

Now, I've met some - very few - lawyers that were worth their rates (one of which is commenting in this thread) but for the most part it is simply a title that in and of itself seems to make a mediocre performer suddenly worth a very large amount of money on an hourly basis.

The funny thing is that I suspect the rest of the world probably looks at IT people in much the same way (only we don't have the equivalent of a bar association, and if we did I suspect the minimum rate for a programmer would shoot up).

[Digory]

The 'inelastic' fees aren't the result of overt price fixing, but the professional rules imposed by the bars. At some point, lawyers don't take on the duties for less than $x00.

Lawyers on the internet will tell you a lot for free, and look at all the documents you want for $20/hr, as long as you don't hold them responsible for putting it in front of a judge. And no matter how many excess lawyers come out of law schools, fees don't go below $x00 for most lawyers.

In litigation, those rules are probably necessary for the benefit of the system. In transactions, there should be fewer.

[jacquesm]

> but the professional rules imposed by the bars.

Which are made of lawyers. So price fixing.

[rayiner]

In the U.S. at least, Department of Justice antitrust litigation has prevented law schools from artificially limiting the supply of lawyers. There are about twice as many law graduates each year as job openings. If you just need someone with a law license, you can hire them for $20/hour on craigslist.