November 21, 2008
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A lawyer's stock in trade is his time and his knowledge according to an old adage attributed to Abraham Lincoln.
But old Abe never told us the trick of getting clients to pay for that time and knowledge. That's probably why he went into politics.
Time is something clients want when they hire a lawyer, but protest when he bills for it. The anecdote about the 160-year-old lawyer at the Pearly Gates sums it up: "only 55 said the lawyer; your time sheets add up to 160", said St. Peter.
This results from the law firm practice of assigning a fixed amount of time for every activity -.3 hours for a letter to client or drafting of a motion even if it only takes one minute to dictate.
When I was a young lawyer starting out the most important client was one with a $500 check. Then it grew to be clients who could pay $150 to $200 per hour billings on a regular basis.
But the only time I 've ever made money at law practice is from clients who didn't pay me a penny but who produced other clients that did - - the condominium developer who got banks to pay me fees out of his loan proceeds , the builder who designated me as his attorney at a construction loan closing where the lender paid all my fees, and the developer who got a loan from a municipal bond issue and designated me as counsel to get fees from the bond proceeds paid by the buyers.
A wise old retired lawyer I met at a Bar luncheon summed it all up for me with the proverb:
Making money in a law practice is getting clients and getting them to pay; all that other stuff in between you hire law clerks to do as cheap as possible. There is some truth to this, but for my money, success in law is more than a Porsche, gold card, or a country club membership.
Success means I could argue a case in the United States Supreme Court with a day's notice, or be asked to take a judgeship or a professorship. These are the crowns in a lawyer's career, these are what he or she seeks after making money at law.
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