lawyers expensive

'Why are lawyers so expensive?!’

It's not an uncommon question to hear from those who are using their services. 

Help for legal conveyancing. Help for marriage. Help for divorce. Help for business planning. Help for business disputes. Help for personal injuries.

Nearly everyone will use a lawyer at some point in their life.

And most people are going to begrudgingly accept the lawyer’s fee estimate when they do.

But once they receive the bill, they’ll turn to their friends and what follows is generally an assortment of profanities and disdain.

“Why are they so expensive?!”

And while we’ll dive into the complexities later, the essence of the answer is simple…

Lawyers are expensive because they get results.

The graph below shows the difference in personal injury motor vehicle settlements when the claimant uses a lawyer, versus claimants who have opted to run it themselves.

The claimant with the lawyer receives $51k in the hand (after lawyer fees), while the self-represented litigant receives $10k.

FIGURE 1: MAIC CLAIMANT RESEARCH REPORT COMPARISON OF SELF-REPRESENTED CLAIMANTS VERSUS LEGALLY REPRESENTED

And lawyers that get these results become highly sort after because they make firms more money.

How do they do that? By making their clients more money.

In these statistics, a lawyer gets the client nearly $80k more in gross settlement, before taking their fees.

The firm pockets the fees and the client receives more money in hand.

The lawyers that can get these results then become highly sort after from other firms, meaning their firm has to pay them a healthy wage to attract and retain them.

It's that simple. Supply and demand.

The greater the demand for the lawyer, the greater the supply of wages needs to be.

And wages of lawyers are the biggest drivers of lawyer’s hourly charge out rates.

Law is a cut-throat, highly competitive game.  Expectations are high.  Burn-out is even higher.

For a firm to be successful and profitable (which, after all, is the goal of any business), they need to make their money back on their wage investment.

In fact, wages account for 1/3 of a firm’s costs.

FIGURE 2: HOW A FIRM'S INCOME GETS DISTRIBUTED

5/9 is used to pay for overheads (rent, wages, admin, marketing, IT, training, etc.) and 1/9 goes to shareholders.

It’s no secret that in any professional service, (be it lawn mowing or law), that this is the business model.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

But in law, the overheads stay fairly consistent. It’s the wages that drive the overall hourly charge-out fee, and that’s because of the supply and demand cycle:

  • the greater the competency of the lawyer;
  • the greater their results will be and;
  • the greater their reputation is, and;
  • the greater the competition for their services will be, and;
  • the greater their salary will be, and;
  • the greater the expectations ​for them to perform will be.

FIGURE 3: HOW WAGES DRIVE HOURLY CHARGE-OUT RATES


By way of example, let's take a look at two lawyers - Jeremy and Lisa

Jeremy and Lisa both graduated at the same time, both commenced work at the same time, both were admitted at the same time. But they were fundamentally different lawyers.

Jeremy was your typical white-collared business person, who spoke in legalese, worked the 9-5, and lapped up the "lawyer lifestyle" outside those hours.

IMAGE 1: DON'T HIRE A LAWYER WHO IS IN IT FOR THE LIFESTYLE

Sure he had clients, but he didn’t have the results that everyone was talking about.

He did the bare minimum he needed to close the matter, bill the client, and go.

He just made his monthly fee budget. Most times.

He had the whole ‘settle low, get the dough’ attitude.

Because Jeremy settled matters fast, the settlement amounts were lower.

It wasn’t uncommon for Jeremy to accept an insurer’s first offer. If he applied for $100k in compensation for his client and the insurer offered him $40k in hand, on the day, Jeremy would think “why not? I’ll take a quick $20k in fees and I’ll give $20k to my client.”

The client would be $20k richer and impressed with Jeremy’s ‘cheap’ legals, but completely unaware of what they have left on the table. Completely unaware that their claim was worth 5 times that.

To the client, that looked great (and fast). To the firm Jeremy worked for, good cashflow, but not a lot of it.

And when a lawyer isn’t profitable, there is no competition. Because there was no competition for him, Jeremy had a lower salary than the average lawyer, and as such could charge out at a lesser rate.

But what his clients didn’t pay for in legal fees, they paid for in lost compensation.

Compare that to Lisa, a practical, legal genius. 

Practical? Lawyer?

It was hard to believe, but it’s what made Lisa stand out.

Lisa delivered step-by-step, practical solutions to her clients. She spoke in absolutes and never gave her clients an ‘it depends’ answer.

She never had to, because she was always sure of her next step. She was always controlling the variables to get the best possible result for her clients.

IMAGE 2: THE BEST LAWYERS ARE VERY STEP-BY-STEP ORIENTED

She ran a thorough case, and if she left work before 7pm it was a miracle. But she wasn’t burnt out, because she was never flustered because she was always and simply following steps.

Because of her thorough casework, her bills were higher.

But whilst her bills were higher, her results were greater. Much greater.

FIGURE 4: LISA'S CLIENTS PAY MORE, BUT GET PAID OUT MORE

Apart from the choir of clients singing her praise, there were also other law firms constantly tempting her with offers of a higher salary. 

And for her firm to retain profitable Lisa, they had to match the other firm’s offers of higher salary.

It was simple.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

The higher the demand from other law firms, the greater the supply the wage has to be. And the greater the wage, the greater the charge-out fee.

But how exactly does their wage affect their charge-out fee?

Well, now that we understand the macro-situation, let’s dive into the micro.

The nitty-gritty. The maths. This section won’t just tell you why they’re expensive, but it’ll explain the numbers behind it.


For a lawyer to be profitable to a business, they need to bill at least three time their wage.

And when a first-year lawyer can earn $75k incl super in Queensland, that’s an expensive foundation to build from.

This foundation means they need to bill $225,000 a year (3 x $75,000). We call this number – 3 – the ‘multiplier.’

The Golden Multiplier Rule

Definition: Multiplier

A ‘multiplier’ is the number of times a fee-earner needs to bill their wage in a year to be profitable.

The Power of the Multiplier

This figure shows where the multiplier fits into the formula for calculating a lawyer's hourly charge-out rate. 

FIGURE 5: THE MULTIPLIER IS A KEY DRIVER IN A LAWYER'S CHARGE-OUT RATE

A lawyer might need to bill $225,000 in a year, but a lawyer cannot bill every minute of every day.

In fact, they will spend about half of their time at work doing ‘unbillable’ activities.

Unbillable activities are the components of their job that aren’t chargeable to a client. These are things like:

  • managing other staff,
  • carrying out marketing activities, and
  • attending training and development sessions.

FIGURE 6: WHAT A JUNIOR LAWYER'S 8-5 LOOKS LIKE

That means the lawyer is left with 4 hours a day in which to bill their time.

FIGURE 7: A LAWYER HAS ONLY 4 BILLABLE HOURS PER DAY

But, believe it or not, lawyers are human.

Most don’t work a 40 hour week, 52 weeks a year.

If they worked every single weekday of the year, for every single week of the year (Monday to Friday for 52 weeks, with no days off) they would be available to work for 260 days (52 x 5).

However, if the lawyer uses their:

  • four weeks of annual leave entitlements (20 days),
  • and their two weeks of sick leave (+ 10 days),
  • and their ten days of public holidays (+ 10 days),

they have now lost another 40 work days.

The total pool of available time subsequently drops from 260 to 220 days.

FIGURE 8: LAWYERS WORK, ON AVERAGE, FOR 220 DAYS A YEAR

That means they have 4 hours a day for 220 days (880 hours) to bill their budget of $225,000 (3 times their salary of $75k).

Divide that $225,000 by the 880 hours available and you get $255/hour.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

Here we have the amount a junior lawyer should be charging to be considered profitable to a business.

FIGURE 9: WITH 880 HOURS OF BILLABLE TIME, A JUNIOR LAWYER'S BASE CHARGE-OUT IS $255/HR


So, how does that look from the client’s perspective?

Let's introduce a hypothetical client to make our explanation of legal fees a lot easier to understand.

Kelly, our hypothetical plaintiff, didn’t think that $255/r was such a bad rate.

Despite being a full-time data-analyst on a healthy income, Kelly was surprisingly frugal.

And that didn’t change when she was rear-ended by a red P-plater.

As it happens in these situations, you get legal advice from a friend before you get it from a lawyer. Kelly rang Lizzie – her best friend – who had worked in finance for a law firm for 6 years.

Chatting to her friend, Lizzie, she was surprised (and happy) to hear that the base rate of a lawyer was $255.

IMAGE 3: BEING QUOTED THE BOTTOM END OF A LAW FIRM'S HOURLY RATES CAN SOMETIMES SEEM TOO GOOD TO BE TRUE

‘That’s not too bad’ Kelly thought to herself.

She had originally wanted to run the claim herself. She was a doer. A goer. A getter.

But she had a young son, William, to care for, a husband, Matthew, to spend time with, and a full-time job to get back to.

She wanted to get straight into the insurance claim, straight into physio, and get straight back onto her feet.

But that plan didn’t last long when she was stonewalled by the insurer of the at-fault car.

The insurer delayed and denied. Discredited and defended.

With all the push-back, she didn’t have the time to run this claim, and she definitely wasn’t going to risk being ‘low-balled’, so the sound of 'no-win no-fee' help became more appealing.

Lizzie wanted to make sure Kelly was prepared for anything though, and told her not to celebrate too soon.

IMAGE 4: THE HAPPINESS OF HIRING 'NO-WIN NO-FEE' LAWYERS CAN BE SHORT-LIVED WHEN YOU LEARN THEIR RATES

This was the base charge out of a junior lawyer. And with all the stonewalling from the insurer, she was going to need more than just a junior lawyer to act for her.

She’d also need someone with more experience. Someone like a partner.


How do you work out the hourly rate for a partner?

Naturally, with greater experience comes a greater price. But experience is not the only driver of a partner's rates.

You see, with greater experience also comes greater responsibility.

A partner needs even more time ‘off the tools’ to manager their staff and take on other networking responsibilities.

As a result, a partner can only spend 40% of their time on billable work – or, roughly, 3.2 hours a day (as opposed to 50% or 4 hours for more junior lawyers).

And not only do they have fewer hours per day, they also have a greater salary to cover - coming in at around $200,000.

FIGURE 10:  A PARTNER'S CHARGE-OUT RATES ARE DRIVEN BY EXPERIENCE AND RESPONSIBILITY

If we use the same process as the lawyer and use a multiplier of 3, a partner would have to have an annual billing requirement of $600,000.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

If we further divide that by the 880 hours of available time, it puts a partner’s charge out rate at $680/hr.

And not many people would be willing to pay that.

… and Kelly was no exception.

Despite her healthy income - being able to afford private swimming lessons for William, having regular outings with her husband, and renovating their house in Indooroopilly – she knew that $680/hr was far too much.

“$680 an hour!? That’s madness!”

But Sam assured her that wasn’t the final charge out rate.

It WAS going to be lower than $680/hr.

That’s when Sam started to explain the ‘sliding multiplier’.

IMAGE 5: IF YOU DON'T TAKE THE TIME TO UNDERSTAND THE CONCEPT OF 'MULTIPLIERS' YOU WILL PAY TOO MUCH FOR YOUR LAWYER 


The 'sliding multiplier'

We need a ‘sliding’ or ‘dynamic’ multiplier, because the 3 times multiplier doesn’t always hold true.

The 3 times multiplier doesn’t always hold true because the firm overheads and shareholder expectations are relatively constant, and we can ‘cap’ them relative to the fee-earner’s wage.

We can cap the non-wage expenses by choosing the amount of profit required from an average lawyer.

On average, lawyers with 3-5 years experience will earn $130k. This is what we call the ‘blended wage’.

As we stated earlier, the desired profit is 1/9. From that we calculate overheads and profit required.

  • Capped overheads = 5/9 x $130k = $71.5k
  • Capped profit = 1/9 x $130k = $14.3k

So if we add up the partner’s wage ($200k), the capped overheads ($71.5k) and the capped profit ($14.3k), we see that the partner needs to bill $285.8k.

FIGURE 11: THE PARTNER'S FEE BUDGET IS A CULMINATION OF THEIR SALARY, CAPPED PROFIT, AND CAPPED OVERHEADS

Like we said earlier, partner’s have only 3.2 hours of billable time in a day (as opposed to their junior counter-parts who have 4).

Multiply the partner's daily billable time by their available days (220) and you get 704 billable hours available per year, versus the 880 that a lawyer has.

FIGURE 12: ON AVERAGE, A PARTNER IN A LAW FIRM HAS 704 HOURS TO BILL THEIR BUDGET OF $258.8K

Now we can work out that a partner needs to charge out at a base rate of $406/hr to meet their profitability requirements ($285.8k / 704 hours).

FIGURE 13: A PARTNER HAS A BASE CHARGE-OUT RATE OF $406/HR

This introduces the 'sliding multiplier,' as shown below:

FIGURE 14: THE BIGGEST DRIVER OF LEGAL FEES IS THE SLIDING MULTIPLIER. IT IS DRIVEN BY MANAGEMENT AND NETWORKING REQUIREMENTS

And here is something completely unexpected...

You can see from the graph that as the lawyer gets more experienced (and subsequently their salary increases), their multiplier is reduced! NOT increased.

This is because the lawyer assumes more and more managerial and networking responsibilities as they progress.

The multiplier is a critical factor that drives lawyers’ charge out rates.

Kelly felt a lot more at ease when Lizzie explained this to her, happy to hear she wasn’t actually going to pay $680/hour.

But, Lizzie said that wasn’t quite the end of it.

In personal injury law, there are a couple of more variables  to take into consideration before reaching the final charge-out rate.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

Lizzie explained that these are:

  • Fee loading for extended payment terms; and
  • The contingency fee.

Fee Loading for Extended Payment Terms

In personal injury law, most firms act for their client on a 'no-win no-fee' basis. That means that the client is not sent the bill until the end of the matter, and only if the client has received a payout from the insurer.

Sometimes these claims can take 2-3 years to settle.

However the firm has to keep paying the lawyers wages every 7-14 days without getting any money flowing back into the business for 700-1000 days.

Hypothetically speaking, they need to borrow the lawyer’s wages off the firm’s owners, or the bank,  until it is paid back by the client at the conclusion of the matter.

As a result, lawyer’s add an additional fee onto their base rate ($255 and $406) to reflect these very lengthy payment terms. Generally, this is a loading fee of around 1.2 for extended payment terms.


It's a bit like buying furniture from Harvey Norman on a 'pay nothing for 12 months' deal. The price of the furniture goes from $100 to $120 because they 'capitalise the interest'.

'No-win no-fee' firms are basically 'lending' their clients the money, but charging the clients a premium for that privilege. 

FIGURE 14: ON-TOP OF THE BASE CHARGE-OUT RATE, FEE-EARNERS MUST ADD ON AN EXTENDED PAYMENT FEE OF 20%

Kelly agreed that made sense. She understood that most commercial businesses will give clients credit for 30 days – so for a personal injury firm’s credit terms to be 24-36 times more generous, there would have to be an increase in the base charge out rates.

IMAGE 6: THERE IS NO SUCH THING AS A FREE LUNCH. YOU PAY EXTRA FOR 'NO-WIN NO-FEE', BUT AT LEAST IT DOESN'T DRAIN YOUR CASH-FLOW FOR DAILY EXPENSES

Lizzie explained there was one more step in the process, and that was consideration for the risk of taking on no-win no-fee cases. Some cases would fail and the firm has already paid the legal wages and outlays that they can't bill anyone. It's like building a house that gets condemned. 


How do firms account for the risk of 'no-win, no-fee'?

In personal injury law, most firms will offer a ‘no-win no-fee’ agreement. So when their base charge-out rates are based on winning every case, how do they protect themselves from a loss in the rare situation that a case doesn’t win?

It’s simple.

No-win no-fee lawyers will generally add a ‘contingency fee’ risk-loading rate to the base fee we’ve just calculated.

It means the cost of a lost case is mitigated by adding an additional amount to the base rate so that there is enough “fat” in the system to keep paying wages, for the occasional claim failure. 

The chance of this failure is also relative to the superiority (or experience) of the person acting. A partner is less likely to experience ‘claim failure’ than a first year solicitor, just as a medical student is more likely to botch an operation than a senior heart surgeon.

 This means that the ‘contingent risk loading’ of base rates is higher for junior lawyers and decreases as the lawyer’s experience increases.

FIGURE 15: HOW EXPERIENCE EFFECTS THE RISK OF WINNING AND LOSING, AND HOW TO ACCOUNT FOR THAT IN MONETARY TERMS

The more superior a lawyer, the lower their chance of losing, thus the lower their contingency fee is.

Kelly was content with Lizzie’s explanation, and then asked –

So what’s the final amount I should reasonably expect to be charged by a lawyer to run my claim?

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

That’s where Lizzie brought in the Risk Load Index to help sum up the total.

IMAGE 7: KNOWING EVERYTHING ABOUT A LAWYER'S CHARGE-OUT RATES PUTS YOU IN A MUCH STRONGER POSITION TO CONTROL YOUR LEGAL EXPENDITURE 


The Risk Load Index (RLI)

Lizzie explained that the Risk Load Index is a culmination of the two risks she had just explained:

  • Extended payment term risk; and
  • Contingency risk (influenced by the lawyer’s experience).

Since the contingency risk is influenced by the lawyer’s experience (the greater the experience, the lower the chance of losing), the total risk-multiplier is also based on the lawyer’s experience.

The following is the product of the two risk multipliers:

FIGURE 16: THE RISK LOAD INDEX IS A CULMINATION OF THE EXTENDED PAYMENT TERM RISK AND CONTINGENCY RISK

Position

Risk Multiplier

Partner

1.2

Senior Associate

1.3

Associate

1.4

Laywer

1.7

Trainee Lawyer/Clerk

1.9

Paralegal

2.0


Putting it Together - The Total Charge-Out Rate of a Lawyer

Lizzie clarified that the total charge out rate will be:

  • The base rate for each level of expertise: wage x multiplier ÷ billable hours
  • x the relevant RLI: extended payment term risk (1.2) + contingency risk

From that, you get the following charge-out rates:

Position

Working (Base Rate x RLI)

Total Hourly Rate

Partner

$406 x 1.2

$487.20 (capped at $475)

Senior Associate

$347 x 1.3

$451.25

Associate

$305 x 1.4

$427.50

Lawyer

$255 x 1.7

$403.75

Trainee Lawyer/Clerk

$150 x 1.9

$285.00

Paralegal

$95 x 2

$190.00

Kelly was somewhat taken aback by the cost totals. While it was better than the $680, she was still unsure.

This still seems a bit expensive?

She exclaimed to Lizzie.

IMAGE 8: YOU MUST EVALUATE LEGAL FEES NOT IN TERMS OF EXPENSE, BUT IN TERMS OF RESULT, OTHERWISE YOU WILL ALWAYS FEEL LIKE YOU ARE PAYING TOO MUCH

Lizzie listened intently and completely understood her best friend’s uncertainty. After all, Lizzie had worked in finance for a law firm before. She’d seen the big numbers many times before.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

But not only had she seen the big charge-out rates, she’d also seen the big compensation payouts.

She said to Kelly, “Isn’t ‘expensive’ really a matter of perceived value?”

And what if that perception of value is wrong? Because you don’t have all the facts?

Merriam-Webster defines value as:

A fair return or equivalent in goods, services, or money for something exchanged.

So what if the ‘fair return’ outweighs the cost?

Let’s look at Figure 1 again.

In 2015, MAIC found that a legally represented plaintiff ended their claim with 400% more money in their hand than non-represented plaintiffs.

And that’s after legal fees and court fees have been removed.

FIGURE 17: MAIC CLAIMANT RESEARCH REPORT COMPARISON OF SELF-REPRESENTED CLAIMANTS VERSUS LEGALLY REPRESENTED

To put that simply, even with lawyers fees being taken from compensation, claimants still ended up with 4x the amount of their self-represented counter-parts.

And they barely had to lift a finger. 

See, when you sign a retainer agreement with your lawyer, you assign them full authority over your worries and problems.

Lizzie assured Kelly that they would:

  • Take care of every meeting with witnesses, doctors, and insurers.
  • Take care of every piece of paperwork.
  • Take care of every rebuttal from a stonewalling insurer of the at-fault driver.
  • Take care of every negotiation with the insurer.
  • Take care of the lot.

She said sure, there will be some forms for her to fill out too. An appointment here and there. But the lawyer will be doing the pushing.

It’s like a physiotherapist and their patient – the physio will do the majority of work, which is identifying and removing 'bottlenecks':

  • identifying pain-points,
  • analysing the cause of the pain,
  • developing a plan to mitigate the issue,
  • and so on and so forth.

And you pay them a healthy sum for these services, but you still have to do some work. You still have to:

  • do your rehabilitation,
  • attend your appointments, and
  • attend anything else they might recommend, like remedial massage.

But they do 99% of the problem solving, and you generally leave in a better position than when you started.

Well, lawyers are much the same.


Lawyers have a pretty singular value proposition. They take care of legal problems for their clients.

And when you sign a retainer agreement, your problem essentially becomes their problem.

IMAGE 8: CLIENTS OFTEN WONDER WHY FIRST YEAR LAWYERS ARE PAID $75K

They’ve trained and studied and practiced to be a lawyer, and it's not all suits and champagne. 

Their careers begin with 4 long years of late nights at university, filled with expected internships and work experience as paralegals and secretaries.

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.

Next, they face 6-12 months of full-time work alongside countless hours dedicated to the completion of written assignments.

They must pass this ‘practical legal training’ before applying to the Supreme Court of Queensland to be admitted as a solicitor.

If the judge is content that they will serve the crown honestly and without bias, only then are they officially a junior lawyer.

And, once they’re a junior lawyer, they still have two years of mentoring and guidance under a more senior lawyer.

In fact, lawyer’s face a brutal and ongoing expectation to constantly train and progress. And that’s a costly endeavor. Regardless of where they’re at in their career, they will always be required to fulfill their CPD (continuing professional development) points.

Compare that to an electrician, and you'll see a surprising reality.

Junior lawyer's on $75k might be just that - junior. But that's comparative to their profession. By the time they reach it to 'junior lawyer', they've already completed 5 years of study and work (if all went to plan, study was full-time, and they only studied law). 

An electrician will start earning $55k straight away, learning as they go with 'hands-on', paid work. They do this in the form of an apprenticeship, and upon completion will be earning a salary of over $75k already.

Compare that to the 5+ years of full-time study and part-time work that a lawyer goes through, and you'll start to see that the hourly rates aren't completely obsurd or unheard of. 

Kelly then realised she wasn’t just paying for a lawyer.

She was paying for a better chance at compensation.

She would have a professional she could trust, and a professional who would give her the time she needed for William, her husband, and as much of her job as possible.

IMAGE 9: UNDERSTANDING THE CONCEPT OF 'LEGAL VALUE' ALLOWS CLIENTS TO TOTALLY CONTROL THEIR LEGAL BILLS AND THEIR FINANCIAL FREEDOM

For Kelly, that was worth its weight in gold.


Lizzie said there was one final step – finding the right lawyer. Finding a Lisa.

Justifying the price of a lawyer is only valuable if you find the right lawyer. Or else, like Jeremy’s clients, you will be leaving a lot of compensation on the table.

Kelly needed a firm that:

  • had the resources to fast-track the process and help the clients reduce their costs,
  • had the grit and determination to get her maximum compensation.
  • And, most importantly, had a team of junior staff for cheaper hourly rates, and used them appropriately.

IMAGE 10: THE CONFIDENCE IN CONTROLLING LEGAL FEES HAPPENS WHEN YOU CONTROL 'LEGAL LEVERAGE'

And, now that you know how a lawyer's rates are calculated, how do you control "who" works on your file?

It's called legal leverage. 

Read our next article to find out more. 

Inside this guide:

  • How a lawyer's hourly rates can be controlled;
  • How to make sure expensive lawyers aren't doing easy admin tasks;
  • How to maximise item-based charges and stop leaving money on the table;
  • How to understand a lawyer's cost agreement and schedule;
  • And more!

Get your free copy of our guide to controlling legal fees in a personal injury matter.


It's unwise to pay too much, but it's worse to pay too little

“It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money - that's all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot - it can't be done.

John Ruskin, (English economic commentator, 1811-1900)


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