[malandrew]

It's a win in the sense that you will always take home big bucks. Yes, it's a lot of work, but there isn't a risk of no payout in the case your side loses. Startup success or failure means big bucks or no bucks. Lawsuit success or failure means big bucks or even bigger bucks.

[DannyBee]

No offense, but I think you are greatly confused about the economics of lawyering. Without getting into a full blown 30 page explanation, you do not always take home big bucks. This is a common misconception.

There is in fact, a large risk of "no payout", or worse, a loss, if apple decides to argue about your billing (which they will). As a firm, you may end up having to pay your associates more than apple pays you, depending on how things go, generating a net loss for the firm. Your associates get paid well (particularly in the IP field), but usually this just about makes up for the large amount of law school debt they have (which can easily be $3000+ a month). Again not that they are poor starving people, but the salary differences you see often are eaten by debt payments and the fact that they work ridiculous hours.

On the direct "payout side", you are right that trademark work is not usually contingency work, but a lot of other work is, in which case the risk is immense. Firms are often fronting many millions of dollars in large cases, and all you have is the hope you will get paid on time. Your recourse if you don't is to sue the client, and then spend even more money, and either settle for 50% to not drag it out (the average time to resolve these cases is 7 years), or hope a judge doesn't think your billing is atrocious.

This risk is certainly less in the corporate world (in my wife's area, family law, individual clients can have something like a 35% non-payment rate, particularly in hard economies), but still there.

Again, i'm not saying lawyers don't make money, and aren't well off in a lot of cases, but to pretend that lawyers are somehow guaranteed "big bucks" in cases like this is just a fantasy. It's a business. Sometimes you do well, sometimes you don't. There are no guarantees, and there is always risk. Given the state of the legal job market and the legal world , if you want to make big bucks, running a law firm and taking cases like this is not the way to do it anymore.

[malandrew]

I completely agree. However note that your examples are straw men. I wasn't talking about the general economics of lawyering, and at no point did I make that claim. My comment was in response to this specific case of corporate IP law. I agree with you that family law and consumer protection (e.g. class actions lawsuits) for example certainly are like startups at times. In this trademark case it most likely a case of big bucks or bigger bucks. It's not contingency work and there isn't really a risk of non-payment with a client like Apple.

And yes, there are no guarantees and there is always risk, but in this trademark case the amount of risk versus upside is very very favorable to the lawyers involved.

What I don't understand is why "taking cases like this is not the way to do it anymore." I simply don't see why the lawyers aren't almost guaranteed to make good money in this particular case, especially with a deep-pocketed client like Apple involved. I would like to know why though.

[DannyBee]

"It's not contingency work and there isn't really a risk of non-payment with a client like Apple." This isn't quite true, non-payment is often a bill-reducing tactic. :)

I'll answer your last question, and one someone else posted. I simply don't have time at the moment to get into a protracted discussion right now, humorously due to dealing with lawsuits, so this will have to be my last real response. I actually don't have a dog in this fight, even though i'm a corporate IP lawyer. I actually also manage a team of software engineers, and spend most of my time on the legal front either dealing with open source licensing, or trying to put myself out of business by getting rid of software patents.

On the corporate side:

Money from these cases doesn't go to hiring more lawyers. Ignoring NPEs and other weird cases, in most companies, the number of lawyers is fixed relative to the size of other things, like any support staff. For example, i can name a huge tech company where lawyer headcount is limited to 1% of engineer headcount.

Until engineer headcount increases, winning or losing lawsuits has no impact on the number of lawyers being hired or paid. It does not make the lawyers more or less money.

Again, the above is common even in companies that derive large amounts of money from licensing (though i'm still excluding NPE's). They are simply "understaffed" and deal with it.

Please also note that corporate lawyers nowadays often make less than equivalent engineers, unless you are talking about the very top folks. People do corporate law because of better hours, not better money.

On the law firm side:

There are too many lawyers already. The vast majority of lawyers coming out of law school right now cannot find jobs. Vast majority being 70+%. It's no longer economically worth being a lawyer, in the sense that the debt you incur is more than your expected increase in earnings.

For the first time in a long time, law schools and the ABA are actually starting to tell students it's not worth it, too.

A large number of firms are downsizing heavily, including IP firms.

This in turn, has caused two things to happen:

1. Good lawyers are looking for work, and willing to work cheap. very cheap.

2. Cheap fresh-out graduated law students are willing to work for basically nothing, because they have debt but no jobs. "Basically nothing" = there are large numbers of fresh-outs from top schools willing to work for 20 bucks an hour. No joke.

This, combined with outsourcing (which most find a hilarious thought), is seriously pushing down the hourly/etc price of lawyers. The amount of profit you will now make in a trademark suit, even with a client like apple, is not that large, but the expenses haven't changed, because law firm structures haven't changed. You would think #2 would just cause law firms to hire people cheaper. Instead, they've just limited themselves to the number of associates they can afford to pay 150k a year to. It turns out most law firms are astonishingly bad at the business part.

Simultaneously, clients have become less willing to pay for associates. When times were very good, they didn't care. Now, they care. They aren't willing to pay 450/hr for an associate to learn how to do a trademark case, they want a partner. They are basically willing to pay "nothing" for the associate until they've been doing this stuff for 4-5 years. Thus, the law firms are starting/continuing to have to eat that cost, since the still have to pay the associates, cutting into profits.

Cases like the Apple one are large cases. They often involve a large number of associates for a number of years, which, again, apple isn't going to be very willing to pay much for. The firm would actually be better off with simpler cases that associates can do multiples of at a time. For example, they'd be better having associates draft simple trademark licensing agreements for multiple clients all day, than taking on complex litigation like this.

"deep pocketed" clients don't really exist in the tech world anymore. It's true that there used to basically be a money faucet from deep pocketed clients, and you could bill whatever you want. This hasn't been true for a while in general. They now all have very tightly controlled budgets for IP law in order to keep costs down. They are also pushing for and getting fixed cost structures from law firms. For example, they will only be willing to pay $4000 to a law firm to draft a patent, regardless of the size of the patent, complexity, etc. On the other side, however, firms are still paying per-hour billed. This can't last without driving per-hour salaries down, and it certainly doesn't turn into good money.

This is why "taking cases like this is not the way to do it anymore". It's no longer cost effective like it used to be, because the economics have changed. It may work if you are a 1-2 person practice who specializes in this, and have very low expenses. This is also one of the reasons that NPE's have arisen. They have very fixed expense structures and take on a very specific set of work. It is, sadly, a very efficient way to work and make good money.

But of course, this doesn't mean the lawyers in this exact case won't make good money. They may, they may not, depending on how the firm is structured and it's particular financial situation. But it's definitely not guaranteed. It's also not a good business bet anymore compared to simpler work that you can get paid just as much for, or you can have predictable expenses for.

Note that none of this is not a very structured argument. I haven't sat down and tried to present a very cogent argument (that would take a lot of time), mainly just answered a bunch of questions and tell you are wrong. I wouldn't expect much else from a lawyer :)

That said:

TL;DR Lawyering as a profession is not going to be a high earning profession in the future until lawyers become scarce again. Lawyer earnings will only get worse. Law firms that think otherwise are kidding themselves. If you want to make good money, go into plumbing. Most master plumbers are over 55 now, and nobody is willing to send their beautiful unique snowflake to trade school anymore. I expect within 10-15 years plumbers will make 400/hr, and lawyers will make less than the average website design guy.

[feralchimp]

This is awesome, Danny. Now get on that 30-page version. :)

[neya]

Thank you for taking the time to write such a detailed, perfectly valid explanation to clear out the misconceptions that many might have had.

Good day.

[enraged_camel]

I want to save this response for future instances where people ignorantly claim that these lawsuits are "good for lawyers, bad for everyone else."

[CamperBob2]

In other news, it's hard to argue with people whose job is to argue with other people.

Still, lawyers create little besides more work for other lawyers, and that's the ultimate point being made. It's not fair to call the entire profession a confederacy of leeches, as some like to say, but comparing them with arms merchants who sell to both sides in a war is not too unreasonable, I think.

[DannyBee]

I actually think this is an fair comparison, but not for every lawyer. There are plenty of lawyers I know who spend most of their time trying to end the war entirely.

I'd say 99.9% of lawyers give the other 0.1% of us a bad name.

[wnight]

I didn't see anyone say that lawyers had a 100% profit margin so discussing all their business difficulties is fallacious. Regardless, these lawyers have still made money most of us wish they hadn't, and in doing so they've taken it from people who earned it.

That the barbarians lost some of their plunder in fires they had needlessly started was probably little comfort to the villagers...

Your point regarding law students having crippling debt is an emotional red herring. Most people here have or have had huge student loans or are otherwise personally taking a large financial gamble for their careers/businesses.

You also mention the difficulties of paying employees when on contract yourself when missing that everyone else is in the same boat too, trying to make payroll in an uncertain world.

And it's amusing that you mention legal difficulties as you're talking about exactly the people who, collectively, cause those difficulties for everyone. If not for the sort of lawyers who needlessly sued iFone, there wouldn't be the sort of lawyers who'd defend a company skipping out on a legal bill like that, and so forth.

There's risk in everything from fry-cook to indie iOS app developer. Not only is it callous of the people who suffer the least from economic downturn (the upper class, most educated) to complain about problems facing everyone, but it's also another attempt to muddy the issue.

The lawyers alone chose to be there and they alone profited. The money iFone wasted defending itself from this attack could have gone to providing services to customers, wages to employees, and profits to investors.

[benmanns]

So you're an employee of a company, and the company goes bankrupt in part because you're not doing your job properly (and the lawyers were probably doing their job properly - they just incorrectly predicted the outcome of the case, or an executive pushed it through anyways), but you still got paid your salary. That's a huge win right?

Lawyers (good ones) want to provide value for their clients/employers as much as a (good) developer does.

[TheCapn]

Its more of just a fallacy for those who dislike the law game. People shout out "only the lawyers win" type line when its pointless lawsuits going back and forth and is only ever true in cases where the lawyers are hired on a per-case basis, like divorce struggles.

In corporate legal warfare, such as this, the lawyers are just doing their assigned duties. To win or lose probably doesn't mean a bonus usually.

[jiggy2011]

True, but things like this going on at least allows the lawyers to justify their salary. The more important this stuff is, the higher that salary if likely to be.

[rayiner]

"This stuff" = people fighting with each other.

At the end of the day, that's what it comes down to. E.g. Apple didn't sue Samsung because of some arcane patents. They sued Samsung because Samsung released very similar designs to theirs, and they felt ripped off. If the patents weren't there, they would have sued on some other basis.

What ultimately allows lawyers to justify their salary is conflict, and in a big complex economy lawyers don't really need to game the law to manufacture that conflict. Indeed, people come to the US from all over the world to hash out their conflicts in American courtrooms.