The larger the law firm, the more overhead you are paying for

“[B]ig law firms have horrible diseconomies of scale – firms with 150 or more lawyers typically have overhead $70,000 higher per lawyer than firms with 20 or fewer lawyers.” This metric came from a book based on extensive interviews ten years ago of Chicago lawyers, “Urban Lawyers: The New Social Structure of the Bar” (Legalaffairs, Nov./Dec. 2005 at 61). (See also my posts of April 18, 2005 on attitudes of law departments toward large firms and May 10, 2005 on behemoth firms.)

A decade later, the overhead surcharge has probably grown significantly, but the point remains the same. Smaller law firms can offer legal services that are more economical, although they may lag their expensive large competitors in specialization, breadth of resources, brand recognition, and marketing budget.

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