The Firms

June 4, 2008 9:24 AM

Silicon Valley Venture Capitalist Slams Attorneys for Escalating Salaries and Overlawyering

Posted by Brian Baxter

James Mendelson is fed up.

The lawyer and venture capitalist with the Mobius Venture Capital group lashed out against the legal industry in a 1,120-word tirade on his Mendelson's Musings blog, reports our sibling publication The Recorder.

Mendelson focuses largely on rising salaries--he notes that associate salaries have grown 132 percent in the last decade--and overlawyering on simple deals that leads to unnecessary work and higher legal fees.

"I've been working on a thesis for quite some time that the entire business model of law firms is going to have to change, or it's going to get uglier," Mendelson writes.

Reached by The Recorder's Zusha Ellinson, Mendelson said the impetus behind his eruption "were a few things that happened in the last few months that were sort of the last straw."

Mendelson tells The Recorder that there are some firms that "work really hard with us on the issue of cost" but that they were "the exception, not the rule."

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Yeah, shame on us greedy lawyers who only want a reasonable size portion of that venture capital / investment banking pie! Call it (the over-lawyering) "training" or "we don't do less than "perfect" work".

I'd like to see the actual math, but everytime my Atl firm pays assoc's more, they jack up rates so that even with the pay increase, if the assoc bills 2000 hours, the firm nets extra profit of a couple $100k. Smoke and mirrors man, smoke and mirrors. Just keep letting those non-substantive rainmaking self-promoters talk their talk, wine, dine, gift and sports/cultural event you to death. And, remember how personally lucky you are to have 'em, even when your separate legal corporate entity is taking a hit.

Gee, and I thought that fees were capped on the investor side. . .

As for the Company side, if a lot of start-ups (and their investors) didn't push back so hard at playing by the rules at the earliest stages of the firm, perhaps we would not have to spend so much time cleaning up their mess.

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