When the client saw her new lawyer’s lavish office, the first question she asked was: “Can you tell me how much you charge?”
"For a preliminary consultation,” he replied, “I charge $1,200 to answer the first three questions.”
"Don’t you think that’s kind of high?"
"Some people react that way," said the lawyer, "What's your third question?"
I started thinking about lawyer jokes and public perceptions when I read a Business Week article titled “Let’s Offshore the Lawyers” (9/18/06). It started like this: “Mention offshore outsourcing, and Americans fume. But who would cry if we outsourced the work of lawyers, with their fat fees and endless strategies for adding years to litigation?”
I’ve been reading Business Week for many years, and I thought that was the cheapest shot they’d ever taken at an entire profession. Which got me wondering about why lawyers seem to be such a big target for jokes, like the ones I've reproduced here from a lawyer jokes website.
He came straight from Harvard Law Review to start at this father’s firm. At the end of his first day, he rushed into the father’s office. “Dad, you won’t believe it! You know the Smith case? It’s been going on for 10 years, and I settled it on my first day. You said it would go on forever.”
The father sat quietly for a moment, then looked up and shook his head. “No, son. What I said was that it COULD go on forever.”
In summarizing the results of a 2006 survey of corporate lawyers and their clients, Inside Counsel magazine said: “It’s no secret that legal departments’ relationships with law firms are somewhat tense. That tension is largely attributable to the fact that their objectives are at odds: general counsel put a premium on efficiency, while law firms need to bill as many hours as possible.”
What's the difference between a lawyer and a boxer?
If the fight lasts longer, the lawyer earns more.
43% of the clients in the Inside Counsel survey said that law firms make too much money. Even worse, 42% agreed with the statement “most law firms pad their bills.” That’s a pretty serious accusation from 42% of your clients.
From an itemized bill for legal services: "Was walking down the street and saw you on the other side. Walked to the corner to cross at the light, crossed the street and walked quickly to catch up with you. Got close and saw it wasn't you. -$200."
Meanwhile, 74% of the lawyers in the survey said that their firms are actively seeking out ways to reduce legal costs. They’d better tell their clients what they’re up to, because only 11% of the clients agreed with the exact same statement.
As the Inside Counsel survey summed it up “Most of the friction between law firms and their in-house clients can be traced back to costs.” There is a widespread perception that clients’ interests conflict with their lawyers interests. This can't go on in an age of globalization, price pressure, public accountability, and transparency.
If you doubt that cost pressure is building, see the thoughtful comment that a legal marketer added to my blog on RFPs last week. His firm has spent hundreds of thousands of dollars responding to 15 RFPs in the last 10 months. They've won very little, and he called the results “Embarrassing and frightening.”
Or see Amy Campbell’s summary of last week’s corporate counsel panel at the Legal Marketing Association of New England conference. Scroll down to the section on alternative billing, and read about the company that set an annual legal budget with the law firm that did 80% of their work, then paid only 50 cents on the dollar for any costs that were over budget. (If you are a glass half-full type, you can be encouraged by the fact that if the law firm came in under budget, they would get 50% of the savings. But as a glass half-empty guy, I’ll bet they also get a smaller budget the next year.)
I’ll talk more about how hard it is to address these issues in future posts on hourly billing and alternative fees. But until somebody comes up with an answer, people are going to be telling jokes like this:
How many lawyers does it take to change a light bulb?
How many can you afford?