Attorney here will explain it to some degree. For sole practitioners, it's basically an accounting method for the most part. In order to meet living expenses, AND run an office, most attorneys need to take the basic office expenses plus what it takes to live. So, if an office costs $1.25/ft plus triple net, plus shared security guard expense, let's pretend the office was 1,000'ft. So maybe $1,400/month just on having the physical office, not including any employees or other expenses. Before going further, I will say that in the mid 1990's, we had a very large shared office and our portion alone was over $1,500/month. You could drive a car through my office window, it was pretty big. Plus it was a corner office on Point West, across from the Arden Fair mall.
Then attorney would have to determine all of the employee expenses, including comp and any insurance; this can be very, very expensive. The office supplies, phone services, answering exchange, postage meter,cleaning costs, and whatever else needs to be obtained to run the office (expensive copier,utilities, internet, computers, expensive legal software, software updates, library updates, new legal code books, supplies,etc) Some legal software is exceptionally high in cost, and can run like $4,000-$7,000 per month/up. It depends what type of law you work on, and what caliber of software you are subscribing to, as software designed for will/trusts for example, is expensive to update.
Also, added cost for advertising, specialized optimizing tweaking, subscriptions to other legal information, website maintenance (that alone could be $1,000/month...) Also, the cost of insurance is sometimes factored in. That can run $3,500/yr and up, usually far more if in practice over 10 years.
That doesn't include liability insurance for the office. Let's pretend the expenses using data above was used; without adding living expenses, we are looking at perhaps $4700-6700 with one employee who is a clerk. Then if we add in the attorney's living expenses, let's pretend it's $5,000 and assume there is no high "mortgage." is As we can see, it ends up to about $10,500 in this example. In order to get the $10k, (that's breaking somewhat even--not profit)-- attorney has to figure out how many hours can be generated and billed. Plus taxes have to be accounted for, by estimating in advance, and sometimes paying quarterly.
If attorney worked 50hr per week, then attorney divides $10.5k by 50hr, and it's $210/hr but if only 40hr, then it's $262. And that would be considered low by most California standards.
Unless you are an attorney, you may have wondered how attorney fees are set. Years of experience usually make the hourly fee somewhat higher, as does specialization.
Obviously, the only way to earn a living is to have more clients, less expenses where possible, and not live beyond your means. This is not rocket science. Many attorneys don't pay $1,200 for rent on an office, and they don't all have hired help with 4 employees. For those that do, they probably can afford it. Sometimes personal injury attorneys can settle a very expensive case and if in the millions, will be set for some time. For everyone else, any attorney not settling cases for millions, has to work to get clients, and if attorney is new to the area, it's even more work.
Even when one understands how attorney fees are set up, most litigants cannot afford the prevailing fees that attorneys charge. In knowing this, attorney (of this site) specifically has chosen to make fees lower for clients, and has often set up fees based upon the income of the client. This doesn't mean it is free, but it's certainly much, much less than the ordinary attorney. One of the only ways to operate like this, is to have one's living expenses be very low, and one's overhead to be much lower than the average attorney.
After much time spent paying for expensive offices, and overhead, attorney decided that to serve the general population, one must make sacrifices; therefore, attorney is able to work at an affordable rate while not compromising zealous representation. It is a lifestyle change, and very few attorneys will do it. But attorney has done it for years now, with no regrets.