The Economics of Law Firms: Why Lawyers Charge Such High Hourly Rates

The recovery of legal fees for representation services becomes particularly problematic when attorneys charge hourly rates based on time spent. Many believe the core issue lies in judges' difficulty comprehending how one hour of a lawyer's work could cost 30,000 rubles—or even 10,000 rubles—especially when judges' salaries, while high by Russian standards, typically don't exceed 100,000–200,000 rubles per month (including all supplementary payments)[1].

This problem is exacerbated by the fact that most Russian judges lack experience in legal consulting and consequently struggle to understand law firm economics (throughout this text, "law firm" refers to both bar associations/bureaus and legal entities like LLCs), particularly regarding operational costs and service pricing structures.

Our expert group at Veta has conducted analytical research on minimum hourly rates for lawyers at "Group A" firms (as classified in our Annual Study of Litigation Service Costs in Moscow and Moscow Region Courts for 2019)[2].

The modeling focused on a midsize firm with 48 total staff—35 lawyers/attorneys and 13 support personnel. Such firms primarily handle litigation across core practice areas: commercial arbitration, civil disputes, bankruptcy, corporate conflicts, and tax litigation, with potential secondary practices including antitrust, criminal defense, labor law, IP disputes, and others.

We calculated hourly rates based on minimum required monthly revenue—covering operational expenses plus baseline profitability thresholds for sustainable legal business operations.

Full study available via link.