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The True Cost of An Attorney

COST ATTORNEY These days, the costs for an attorney are very high. But it is often misunderstood as to how and why these expenses are justified. MEDIAN PAY the top 10% earn more than in 2012: $166,400 A YÉAR $54.21 PER HOUR $112,760 PER YEAR 10% The lowest 10% earn less than $54,130 A YEAR s 10% LABOR S STA AU OF COMPARE THIS TO THE MEDIAN ANNUAL WAGE OF ALL OCCUPATIONS ACCORDING TO THE BUREAU OF LABOR STATISTICS: $33,84O $ BIG PAY FOR BIG FIRMS $ THE OVERALL MEDIAN -YEAR SALARY AT MEDI ARIES FOR FIRST YEAR ASSOCIATES LAW FIRMS OF ALL SIZES IS $125,000 AT LARGER LAW FIRMS IS $145,000 For large firms of 251-700 lawyers in Chicago, Los Angeles, San Francisco, and Washington, D.C., the first year median is in the $135,000-$145,000 range. $160,000 starting salary FIRST YEAR MEDIAN IS IN THE New York Chicago San Francisco $135,000-$145,000 RANGE Washington D.C Los Angeles LARGE FIRMS 251-700 LAWYERS In New York, 75% of firms with 251 or more lawyers and 87% of firms with over 700 lawyers pay a starting salary of $160,000. 75% OF FIRMS WITH 251 LAWYERS 87% OF FIRMS WITH 700 LAWYERS New York STARTING SALARY $160,000 THE LARGEST FIRMS OFFER FIRST YEAR ASSOCIATES A STARTING SALARY OF $160,000 BIG FIRMS 700 lawyers $160,000 ACCOUNTED FOR 46% OF REPORTED FIRST-YEAR SALARIES Washington D.C Los Angeles In 2012, in large fims of more than 700 lawyers in Los Angeles or Washington, D.C., first year associate salaries of $160,000 accounted for 46% of reported first-year salaries. HOW MANY ATTORNEYS ARE WORKING WHERE? Of the 75% of attorneys who work in private practice: 38% work in large law firms with more than 6 lawyers work as solo practitioners or in 62% offices of 5 or fewer lawyers 7.5% work for government agencies 8.5% work for private industries and associations as salaried lawyers or as managers 1% work for legal aid or as public defenders 1% work in legal education 2.5% work in the judiciary HOW MUCH DO SMALL BUSINESSES SPEND? Example costs of average fixed costs of legal services for small businesses COPYRIGHT REGISTRATION WEBSITE TERMS OF USE TRADEMARK APPLICATION PATENT SEARCH $ 350 $ 450 $ 750 $ 1,075 SOFTWARE DEVELOPER SOFTWARE LICENSING AGREEMENT SOFTWARE STARTUP PACKAGE MECHANICAL PATENT AGREEMENT APPLICATION $ 1,150 $ 1,550 $ 1,900 $ 3,500 SOFTWARE PATENT APPLICATION $ 6,650 HOW MUCH ARE COMPANIES SPENDING ON LEGAL FEES? $245000 TO $320 MILLION IS SPENT IN LEGAL FEES PER COMPANY 24 A Huron survey notes, individual company's legal departments spend ranges from $245,000 to $320,000,000 COMPANIES' LAW DEPARTAMENT SPENDING IN 2012 MEDIAN INSIDE MEDIAN OUTSIDE $26 MILLION $31 MILLION $13 MILLION $16 MILLION LEGAL SPENDING LEGAL SPENDING WORDWIDE LEGAL SPENDING LEGAL SPENDING USA USA WORDWIDE Median outside legal spending worldwide Median inside legal spending worldwide was $31 million worldwide and $26 million was $16 million worldwide and $13 million in the U.S in the U.S ELAWFORUM ESTIMATES THE TOTAL COST OF LITIGATION TO BE $210 BILLION EQUIVALENT TO 1/3 OF THE AFTER-TAX PROFIT OF THE FORTUNE 500 CORPORATIONS. WHY ARE ATTORNEY FEES SO HIGH? $ COST OF EDUCATION $ On top of the cost of their 4 year college degree, attorneys attend 3 years of law school. The average cost of attending law school during the 2010-2011 academic year: per year $39,765 PUBLIC RESIDENT $119,295 total PUBLIC $52,331 per year NON-RESIDENT total $156,993 per year $58,109 PRIVATE total $174,327 COST OF LITIGATION BEHIND THE SCENES WORK FORTUNE 500 CORPORATIONS SPEND AN AVERAGE OF 3 YEARS TO RESOLVE LITIGATIONS Each case is prepared as if going to trial but only 3% of cases end up in trial – the rest are settlements. Many practices are used to pursue cases. Exhaustive discovery, aggressive motion practice, drawn out proceedings, legal research simply take a lot of time and effort. Therefore, these activities rack up a lot of hours and fees. ATTORNEY EXPENSES DEBTS With certain practices (aggressive motions and In addition to the work that the attoneys exhaustive discovery) and needs of a case, themselves accomplish, attomeys rely on attorneys incur expenses for delivery services, the help of additional staff to complete other labs, field experts, court reporters, deposition tasks. charges and so on. REPUTATION Companies that hire highly reputable law firms or legal teams are also paying for the good reputation and the perception of being represented well. DEFENSIVE MANEUVERING MANY COMPANY LEGAL TEAMS ARE TASKED WITH PUSHING LEGAL BOUNDARIES For instance, Apple's patent for a voice and text based search engine, Siri, was submitted 10 TIMES OVER 5 YEARS before it was finally accepted PREVENTS LOSSES APPLE ALSO HAD TO PAY $100 MILLION TO TECH COMPANY CREATIVE TECHNOLOGY FOR PRODUCING A PRODUCT SIMILAR TO CREATIVE'S PATENT. BENEFITS SAMSUNG APPLE WON A $1 BILLION PATENT INFRINGEMENT JUDGMENT AGAINST SAMSUNG LAST YEAR. THE NUMBER OF PATENT APPLICATIONS FILED EACH YEAR IN THE U.S. HAS INCREASED OVER 50% IN THE LAST DECADE. THE NUMBER OF PATENT APPLICATIONS 50% INCREASED ADDITIONAL COSTS Attorneys working in-house (for small, non-public companies, transitional companies raising capital, and large public companies) receive other benefits in addition to base salary. Cash bonuses tend to start at 10% of base salary and run higher with seniority. Bonuses in the range of 25%-35% of base aren't uncommon and depending on employer can run much higher. Most senior in-house positions also receive These bonuses are almost always income in the form of bonuses and/or stock more than 10% of their base salary. awards that are tied to company performance. CONCLUSION Although equity compensation given to attorneys may be very high, the merit for these salaries rests within the education and work expenses in which many attorneys initially face. Thus, it is only after you understand an attorney's financial spectrum can you really see the truth behind their costs. l upcounsel Sources HYPERLINK "" HYPERLINK "" HYPERLINK "" HYPERLINK "" HYPERLINK "" HYPERLINK "" HYPERLINK " tics.php" HYPERLINK " aries.html" HYPERLINK " nal_LIB_Guide_2011_-_Public.pdf" -_Public.pdf HYPERLINK " tal-cost-litigation-estimated-one-third-profits" cost-litigation-estimated-one-third-profits HYPERLINK " ing-for-school/how-much-will-it-cost/law-students-whats-your-average-cost-of-law-school/"http://www.accessgr HYPERLINK " ent-wars-among-tech-giants-can-stifle-competition.html?pagewanted=all&_r=0* 0/08/technology/patent-wars-among-tech-giants-can-stifle-competition.html?pagewanted=all&_r=0 HYPERLINK " ment_management/2010/12/trend-by-size-in-total-legal-spending-by-181-huge-companies-all-fortune-500-or-lar ger.html" -in-total-legal-spending-by-181-huge-companies-all-fortune-500-or-larger.html TAL.jsp?id=1202597273265 department-survey-2012-09-27 OF AN THE TRI

The True Cost of An Attorney

shared by matthew.faustman on Oct 30
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There are a number of factors that can influence how much money you or your company might have to spend the next time you need an attorney. According to one study, company legal departments can spend ...




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