Howard Stern and Legal Fees
What can Howard Stern teach about legal fees? Not much, really. You see, Howard gets what Howard wants. The rest of us lead lives of quiet desperation under the scrutiny of bar regulators.
Stern has been a radio personality for 35 years. At 56, he is one of the nation’s top draws. When he signed on to Sirius XM satellite radio in 2006, 60,000 folks subscribed. There are now 20 million subscribers. Analysts credit Stern with bringing most of those listeners on. For this, he is paid a king’s ransom. His first five year contract paid him $100 million per year; he recently renewed the contract for a reported $400 million for the next five years, a 20 percent decrease.
Eighty million dollars a year isn’t exactly chicken feed. Sirius pays him that sum because they want what he has to offer. He attracts and holds listeners. But is the salary reasonable? Assuming a five day week, that’s roughly $300,000 per day. He’ll make more today than most lawyers make in a year.
Of course, lawyers aren’t radio personalities. I get that. But there is a market for legal services, and that market operates on the basis of supply and demand. A client seeks a lawyers service, the parties negotiate terms, and a contract is formed. Both parties are free to accept or reject the terms. No one forces the marriage of lawyer and client.
So why do bar regulators insist on the right to regulate reasonable fees? And, more to the point, what is a reasonable fee, anyhow?
The Rules of Professional Conduct don’t prescribe a rate card. Those days are long and gone. But regulators still retain the right to review and determine reasonableness on a case-by-case basis. Among the factors the regulators are supposed to consider are the nature and complexity of the work, the skill and reputation of the lawyer, and extent to which taking a particular case will prevent the lawyer from taking other work. Regulators are also free to consider what fees others in the market place are charging.
This troubles me.
I understand that lawyers are in positions of trust, and that we represent people in need. But no one compels a client to hire a particular lawyer. The fees a lawyer charges are a reflection of what he needs or wants to accomplish a particular task. Fees are driven by such silent imperatives as whether the case or client is one that will be easy or difficult, the extent to which taking one case prevents you from taking others, the need to make such payments as rent, salary and taxes. In other words, a lawyer setting a fee has unique temperamental and practice-bound variables to consider. Clients, on the other hand, need to consider whether they can afford the fee, how badly they want a particular lawyer to handle their case, and, that most intangible and Stern-like quality of all, chemistry. What business do regulators have trying to sort all this out? It’s sort of like the FCC stepping in to declare Stern’s contract unreasonable.
The market has a way of taking care of things. Just now, money is tight, and most lawyers are happy to find any paying clients at all. But busy lawyers nationwide remain tethered to the thousand and one tasks associated with running a law firm, whether a solo practice or a megafirm. The best lawyers are able to charge rates others cannot command. These rates are paid because the clients want the lawyer, not because the lawyer extorted or cajoled the client.
I’ve me some of the nation’s top legal guns: Gerry Spence, F. Lee Bailey, Racehorse Haynes. These men charge top dollar because they, like Stern, attract a crowd and can command a price most of us don’t dare quote. I doubt any of them earns $300,000 a day, day-in and day-out, but some lawyers do earn fortunes.
I don’t see anything wrong with that. What troubles me is the pasty-faced regulator who picks away at another man’s gain in the name of ... , well, what?