It takes many years of training to become a legal expert in a particular field of law. And that training cannot begin until completion of four years of university, followed by three more years of law school and then an often grueling bar examination. And what comes out of such a system? Graduates who are hugely in debt, great at taking tests, but have little practical experience in any particular area of law.
Enter the Dragon Law Firm!
Law firms aim to take these smart recent law school graduates, many of whom have never worked anywhere professionally before, and turn them into subject matter experts in fields like Intellectual Property, Civil Litigation, Trusts and Estates, White Collar Criminal Defense, and (these days) Bankruptcy Law.
These newly minted attorneys are called Associates. Eventually, once they have deeper expertise in a field of law, they have an opportunity to move from Associate status to Of Counsel or Partner.
Because law firm partners have so many years of experience, they bill at high hourly rates and try to reduce overall client bills by devolving some of their work to associates at their firm who are still learning that area of law. Not surprisingly, the hourly rate for associates is much lower than that of partners.
Go For Broke
Bankruptcy is a special area of law that combines transactional practice with litigation and touches on other complex topics like tax and finance. Due to its complexity, there are far fewer bankruptcy law experts than the world needs right now.
As the economy sags, unemployment skyrockets, and consumer behavior changes, more and more companies have been filing for bankruptcy. Many are recognizable household names, such as retailers like J. Crew, J.C. Penney, and Neiman Marcus; transportation providers like Hertz; and restaurants like California Pizza Kitchen.
The result is that the demand for bankruptcy attorneys is directly inversely proportional to the demand for sit-down dining during a pandemic. And law firms know it!
The Most Expensive Call
Whether you are a debtor or a creditor, bankruptcy is complex and super fast-moving in the United States. Professional help is highly advised, lest you get in trouble with the court, the bankruptcy trustee, or other stakeholders.
While many businesses have a larger, seemingly expensive, law firm on speed dial for certain corporate matters. Nonetheless, they are still shocked by the bills they are getting from their bankruptcy counsel!
In a recent article released by the American Bar Association (ABA) Journal, it has been revealed from court filings that various big law firms such as Skadden, Arps, Slate, Meagher & Flom are currently charging greater than $1,000 per hour of work accomplished by their senior associates. Yes, you heard that correctly: it is associates, not partners, being billed out at more than $1000 per hour!
At Weil, Gotshal & Manges, associates involved in J. Crew’s bankruptcy filing are billing up to $1,050 an hour while partners and counsels are billing between $1,100 to $1,695 an hour. Meanwhile, at Kirkland & Ellis, associates involved in Barney’s New York’s bankruptcy filing have their rates set as high as $1,125 an hour.
Call Collect Instead?
These crazy law firm rates, combined with the law firms billing an unknown, unpredictable amount of hours, is why we created Proxifile. Will your matter require 15 hours or 75 hours of work? The typical law firm answer: “It depends. We’ll tell you when we are done.” Now multiple that 75 hours by $1,000 per hour!
The answer will make you wish you had gone to law school and became a bankruptcy law expert. However such a path would take you more than a decade and run up over $200,000 in tuition bills.
For those who don’t want to take a 10 years sabbatical to become a bankruptcy attorney, Proxifile has the optimal answer: pay a flat free upfront that’s less than 1 hour of attorney time. The rest of our compensation is tied to getting results for you. We only get paid more money if we get good results for you. If you are owed money by a bankrupt entity, we can help.