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Thursday, September 25, 2003  

More on how much money lawyers make

Prof. Cowen has responded to my post yesterday regarding the respective hauls of trial lawyers and the Amlaw 100. To his credit, he says both numbers are stunning.

Putting aside my arithmetic mistakes (as pointed out by Joe in comments)- the most important thing is that the order of magnitude of the two numbers is the same- here's my next question: Why?

Why are these numbers stunning?

There are several possibilities:

1. The numbers are stunning because they are so large. This is Prof. Cowen's point, I suppose, when he compares them to the revenues of Coca-Cola. Largeness, however, is a matter of reference. Compared to the United States' 2002 GDP of $10.4 trillion , the numbers are small. If this is Prof. Cowen's objection, then I'm not sure what his point is.

2. The numbers are stunning because they are disproportionate to the amount of legal work which should have been performed. This is possible, but how do you prove it? What makes a lawsuit frivolous? What makes a lawsuit legitimate? How can one show that the combined +/- $80 billion was money not well spent? If this is Prof. Cowen's point, I would like to see it fleshed out empirically, not anecdotally. How much litigation is enough? I will have to take a closer look at the website he linked to, and see what the report says.

3. The numbers are stunning because lawyers make too much money. Regardless of what I think, I'm betting Prof. Cowen would say that the market should set salaries, with very few, if any, restrictions.

On the point that the Awlaw 100 does transactional work as well as litigation whereas trial lawyers only do litigation, I'm not sure that makes the two numbers incomperable, an apple and an orange, if you will. Aren't both types of legal services costs of doing business? I guess the comparision breaks down if the underlying point is that there is just too much litigation in the country, but if that is the point, then I'd like to go beyond the Amlaw 100 and find the sum spent on all corporate litigation.
posted by Adam

10:59 AM/

Wednesday, September 24, 2003  

Tyler Cowen of the Volokh Conspiracy writes :

The number stunned me. Last year trial lawyers pulled in $40 billion from lawsuits, or twice as much as the revenues of the Coca-Cola company.

So here's my question: Is he stunned that the American Lawyer's list of the top 100 law firms (who do mostly corporate defense work) grossed more than $47 billion last year?

Why is only one of these numbers stunning?
posted by Adam

10:39 AM/
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