Have you ever sat down and calculated how much it costs per hour to run your law office? I haven’t (though I know what my overhead and expenses are from my tax returns, just haven’t reduced them to an hourly rate). Yet it seems that most of us ought to know that number off the top of our heads given that we bill by the hour.
Anyway, apparently, the ABA has crunched some numbers and found in a
2002 report that it costs $67/hour to run a small law office. That
figure has been cited by Massachusetts lawyers in support of their
argument for higher rates for court appointed lawyers, reported here.
I haven’t been able to access the ABA report, but $67/hr seems awfully
high – it comes to $134,000 per year based on 2000 hours though
presumably that figure includes the lawyer’s salary as well, and a
decent salary at that if you assume $50,000 for overhead. I’d be
interested in seeing a copy of the ABA report, if anyone has access to
it – and if it’s accurate, figuring out ways for attorneys to reduce
that overhead to realize more revenue without increasing client fees.
Update: Here’s the link to the cost analysis that Donna mentions in her comments below. I guess that 50k doesn’t cover overhead if you have a full time legal assistant with benefits.