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“There are too many lawyers who charge $300 an hour,” grumbles a law school professor, a statement that would puzzle an economist

The quote comes from a NY Times article on Dec. 18, 2011 at BU 1. Prof. Andrew Morriss of the University of Alabama School of Law then adds that there aren’t enough lawyers who will handle personal matters for individuals, like divorces and bankruptcy filings, at “reasonable rates.”

The article blame law schools as too expensive, with the consequence that heavily indebted graduates must earn princely sums to pay off their debts and therefore their firms must charge a king’s ransom to compete on salaries.

An economist could respond that corporate buyers, by and large, are the ones that support $300 an hour lawyers, and indeed many lawyers who are much more expensive. No one forces them to retain outside counsel nor sets minimum hourly rates they must pay. It appears, I grant, that the ABA and state legislators have restricted “the practice of law” and thereby raised the cost of legal advice. Still, companies are not without choices. Nor does any law or government regulation or guild-like agreement restrict lawyers from charging individuals “reasonable rates.” No, it is economics.

Demand for legal talent at a certain level of perceived ability supports law firms and their lawyers, pricey by some views but at market equilibrium by others, and doesn’t support enough of what the professor views as a more socially optimal distribution of personal legal counsel.

Perhaps what really rankles the professor is capitalism. He may believe that in a fairer and more just world, additional legal talent would help people who have too little money but life-affecting legal needs instead of lining the pockets of avaricious corporations. That is an entirely respectable view, one shared by many, but in our present economy, there are approximately as many lawyers who can charge $300 an hour or more as there are purchasers of their time willing to pay it.

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