The Inefficiency of Law Firms

"If there’s an irony in law having become a business, it’s that law, it turns out, isn’t a very good business — or at least doesn’t have a very efficient business model. While manufacturers typically make money through economies of scale, and other service professionals, like investment bankers or architects, make money by taking a percentage of a deal or the cost of a project, lawyers for the most part still work for an hourly wage. In short, they’re in the business of selling their time.

The problem, of course, is that time is finite, so even if you’re selling those hours for an exorbitantly high rate — a handful of lawyers in Philadelphia can charge up to $1,000 an hour — it can be tough to build a successful, globally competitive business.

~The Last Days of the Philadelphia Lawyer

[HT: PhiLAWdelphia]