Did you know that the practice of law is more business now than ever before?

If you’re looking for a lawyer, read this article to understand the real basics of law firm economics.

The transition started in the early 20th century, but really gathered steam after WWII. By the 1980’s law was fully ensconced as a business rather than a profession.

What’s interesting is that consultants and other financial experts apply or refer to law firms as using a particular business model.

Generally, there are 3 models for law firms.

The first model is a leveraged model.

Leverage is an excellent business technique (and non-business technique). In law it works like this.

The bulk of the lawyers bill at an hourly rate that generates profits for the few partners.

The beauty about this model is it can generate profits for the “owners” while the owners do little but manage.

A totally different model in law is the specialization model.

The specialization model is where one or a few lawyers offer legal services in a very focused / narrow area.

Because the legal services are specialized, few or any other lawyers can offer the same caliber. Consequently, these specialized lawyers charge more per hour (or per job).

These lawyers profit off their years of study and specializing in a niche legal area.

Some firms manage to embrace both the leveraged and customized models.

Law firms often try to use both the leveraged model and specialized model – some do so with success, while other firms don’t do so well.

For example, mid-sized firms try to use both leveraging and specialization – sometimes it works; other times it doesn’t.

The final broad model is where lawyers’ fees are earned by contingency.

The contingency fee arrangement is where the lawyer gets paid a set percent of any money going to the client from the case.

The classic example of the contingency model is a personal injury lawyer.

Is any model better than the others? Not really, all work quite well when done well.

The most money is made by the best contingency lawyers because some of the awards are massive.

It’s important to note that some large firms will also use the contingency model in some cases.

At the end of the day, clients need to do their homework when looking for lawyers; take the time to read up on lawyers in order to make the best lawyer hiring decision possible.

There are some really great and capable Langley lawyers. That’s the point of the Find Experienced Lawyers lawyer directory – to help you find the lawyer you need.