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February 09, 2006

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Dave Rachford

So True - you're touching on the VALUE PRICING issue -

I myself have been frustrated when I billed Hourly vs. Value Style on big jobs that save clients THOUSANDS...

I'll get in over my head if the conversation goes to economics, but it's certainly worth having.... I'm sure very few accountants feel they earn what they think they're worth!
Dave

Andy Havens

Don't want to get too deep down into the rabbit hole here, but there is one element you're missing in this equation. Salary is an ongoing, yearly income, whereas law school is a one-time, fixed cost. So while the cost of law school has risen more quickly than associate salaries, it would have to be an ongoing, yearly expense for it to be as large a problem as described. Since many more students are going into law these days, many specifically because it is a career with large earnings potential, you have a "sellers' market" in terms of the credentials necessary to become a lawyer. But you'd have to not only take into account inflation, but ammortize the cost of the law school degree over the career of the attorney to really see if the increased education debt is truly greater now than 15 years ago.

Not that it ain't a problem. Both greed (the idea that getting into a profession chiefly for the financial reward, with no real thought of what else is involved) and the billable hour vs. value proposition are both driving costs into the business, which drive up fees, which drive up salaries, which drives up the cost of entry.

I'd shed a tear for the poor associates, but if you compare their educational debt to what most docs pay vs. their salaries -- or most teachers or nurses -- they've got no complaints. It's a well-paying career for many who pay attention and play the game well. Not that it's not a hard job... but there are lots harder that don't pay as well and, frankly, are spending more time (as a profession) figruing out ways to drive costs out of the system.

Jack Yan

Andy, as one of my old law school buddies said, ‘It’s a good way to make a living. Just not a great way.’ To Michelle and Dave: I agree that the hourly rate can be deceptive. These days, since I don’t practise law, I serve as an expert witness. In some cases, I save the client’s butt with my testimony. While we mightn’t make the thousands we might deserve, I hope we can at least earn some karmic points.

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