Here is one of my predictions for law firms of the future:
Somewhere between five and 10 years from now:
- Top lawyers will bill at $5,000 to $10,000 per hour
- Other lawyers will find their billing rates the same as today or even lower
- There will be very few top lawyers and very many other lawyers
Why do I think this is the case?
It is the way things are moving in all industries. The internet and availability of information creates stars. You see it with YouTube, with TikTok, with Instagram, and with other social media. Those that get a lot of press — followers — become ungodly wealthy and successful. And the rest are basically ignored and cannot get money for their services.
Consider that little boy you may have heard of — I think 6 years old — making more than $5 million a year opening toys on YouTube.
The flywheel of social media and other forces reinforces all of this. The more successful one becomes, the easier it is to become still more successful. And for the rest of the people, nothing is doing.
My prediction is already happening in the law business. I see it every day. The legal Rock Stars have seen billing rates scale the — formerly unthinkable — $1,000 per hour several years ago. And now many large firm lawyers are more like $1,500 per hour — and approaching (and I hear anecdotally hitting) — $2,000 per hour.
And it all makes sense doesn’t it? How much would you pay for the top M&A lawyer on your $10 billion deal? Is it $1,000 an hour? $2,000 an hour? Or $10,000 an hour? It doesn’t matter does it?
Or if you are wealthy and there is a chance of going to jail! Are you going to the cost-effective lawyer or are you seeking out the tippy-top lawyer irrespective of cost?
In these instances, you simply want the best lawyer, and money really is no object. So it all comes down to being known as the best lawyer for the job.
Let me repeat that: “It all comes down to being known as the best lawyer for the job.”
For simplicity in writing, I will define the concept of being known to be the best lawyer for the job in this article as being the “Best Known.”
If you are not the Best Known, then the purchaser immediately thinks about the cost. And if you are not one of the Best Known, then it is a race to the bottom, i.e., the cheapest provider of the legal service.
For this reason, my prediction makes eminent sense. Those who are thought of as the Best Known can charge whatever they like, and clients will be very happy to pay it. Those who are not the Best Known will struggle to charge a pittance, and clients will likely be annoyed to pay it.
Fair? I guess not.
But reality? Yes.
You may be reading this and saying: “Thanks, Bruce, for this interesting statement that my career — and life — are about to suck. But how about something more useful, like what am I going to do about it?????”
I have very specific thoughts about this; namely, how to position yourself to be the Best Known, and I will share that in my next article.
Bruce Stachenfeld is the chairman of Duval & Stachenfeld LLP, an approximately 50-lawyer law firm based in midtown Manhattan. The firm is known as “The Pure Play in Real Estate Law” because all of its practice areas are focused around real estate. With almost 50 full-time real estate lawyers, the firm is one of the largest real estate law practices in New York City. You can contact Bruce by email at firstname.lastname@example.org. Bruce also writes The Real Estate Philosopher™, which contains applications of Bruce’s eclectic, insightful, and outside-the-box thinking to the real estate world. If you would like to read previous articles or subscribe, please click here.