Financial Benefits
Individual Monetary Benefits of Addressing SUD
Substance use disorder (SUD) is exceptionally expensive for the afflicted individual. There are three primary expense categories: 1) Direct cost of obtaining and using substances; 2) lost productivity caused by substance abuse; and 3) increased health care costs.
Additionally, addiction most often leads to legal bills, and other ancillary expense, DUI's being the most common SUD related legal expense. Legal fees related to divorce and defending negligence claims are also common. It is estimated that 40 to 60% of legal malpractice cases are directly related to SUD impairment. Additionally, a significant number of automobile and other physical accidents are caused by intoxicated people. People do dumb, costly things when they're drunk or otherwise intoxicated.
Treatment costs. The average addict or alcoholic who undergoes treatment and is ultimately successful, goes through four treatment cycles. Treatment is expensive, and even when covered by insurance, out of pocket copays and other costs are significant. Treatment also requires time away from work, resulting in lost revenue. Efficacious aftercare and abstinence monitoring has been proven to drastically reduce the revolving door treatment cycle of the current drug and alcohol rehab model.
A number of indirect, intangible costs are also inherently tied to addiction. The most profound, and hardest to quantify, is lost potential. Years of living in active use cycles prevents people from moving forward in their careers, and advancing to higher paying stations in life.
Individual Cost Savings Estimates
Direct Cost - Alcohol. The direct cost of alcohol to someone suffering from alcohol use disorder (AUD) varies, and almost always correlates to income level. Alcoholics with higher income levels tend to drink higher priced alcohol. Most people with severe AUD (those needing treatment) conservatively spend between $30 and $60 a day on alcohol. Wine drinkers tend to spend the most. Beer drinkers tend to spend the least. The range of direct expense to consume alcohol for a higher earning individual typically falls in the $900 to $1800 per month range.
Direct Cost - Marijuana. The most commonly abused drug in society after alcohol is marijuana. Prices for marijuana fluctuate geographically, and depend on whether one resides in a state where pot is quasi-legal, versus a fully criminalized jurisdiction. A heavy marijuana user spends on average $350 per month on the drug, averaged across jurisdictions and geographical areas.
Direct Cost - Opioids and Opiates. The opioid/opiate epidemic has been well publicized in recent years. It has become a leading driver in the decline of life expectancy in the United States. It is of particular concern for the legal profession. About 6% of attorneys have endorsed misuse of opioids, a full percentage point above the general populace. There is concern that opioid abuse is a growing trend in the profession. Opioids are not only highly addictive, very destructive, and deadly, they are also exceptionally expensive. A typical opioid addict can expect to spend $150 to $200 a day. This equates to $4,500 to $6,000 per month.
Direct Cost - Sedatives (tranquilizers, i.e. Valium, Xanax, Klonopin, Lorazepam other benzodiazepines). There is evidence that lawyers use sedatives at more than twice the rate of the general public - 16% for attorneys, compared to 7% for the general populace. We don't have accurate data on abuse and dependence rates for lawyers taking sedatives, but it is theorized that the rates of addiction for this classification of drug are likely higher for legal professionals. A sedative addiction costs approximately $60 per day, or $1,800 a month.
Direct Cost - Cocaine. Cocaine is extremely addictive, especially within active use cycles. It is also a very expensive drug. A moderate cocaine addiction typically costs $150 to $200 per day. A severe habit can reach into the multiple hundreds of dollars a day. Even a moderate cocaine abuser will spend between $4,500 to $9,000 per month.
Direct Cost - Nicotine. Tobacco is not classed as a serious drugs of misuse because nicotine addicts retain the ability to function competently in nearly all areas of life. However, nicotine is one of the most addictive substances. It is also expensive and it kills, albeit the lag time to death is long. Prices for tobacco vary greatly from state to state, largely based upon each state's tobacco tax rates. In high tax jurisdictions, the price of a pack of cigarettes runs from $10 to $12 each. The national average for a price of cigarettes is around $7 per pack.
The majority of addicts and alcoholics also are addicted to nicotine and tend to be fairly heavy smokers. A two to three pack a day cigarette habit is common. Monthly cost of tobacco addiction for a two to three pack a day smoker runs from $420 to $630, and easily exceeds $1,000 per month for a heavy smoker in the highest tobacco tax states.
The foregoing are the most common substances abused by legal professionals. The chart below provides estimates of daily, monthly, yearly and ten year cost of moderate substance use disorder for a particular drug. Many who suffer from SUD abuse more than one substance. Alcohol is the primary drug of choice for most with SUD, especially attorneys with SUD. The estimated numbers are in absolute present value dollars, without consideration for any interest factor if money spent on consumption had instead been invested. The lost interest factor over a ten year period is significant.
Over a ten year period, an AUD afflicted lawyer who also smokes will spend somewhere between $160,000 and $290,000 on booze and cigarettes. If the lawyer had instead invested the money spent on alcohol and tobacco, and achieved an average historical rate of return in the stock market, the amount of real financial loss spent indulging the addiction doubles. Over a ten year period, the real, direct cost for this lawyer to drink and smoke is in the $320,000 to $580,000 range.
This figure represents only the direct expense of consumption. The indirect costs are nearly always far greater - Lost productivity, lost opportunity, lost jobs, health care expense, divorce, legal fees, etc.
Aside from consumptive expense, the greatest monetary benefit of arresting addiction is a productive life saved. A late stage alcoholic loses 24 to 28 years of life expectancy. The lose of life expectancy is even greater for those with opioid and cocaine addictions. Prescription medication abuse, primarily in the form of opioid/opiate addiction have lead to an epidemic of overdose death in the US. Fatal overdoses rose by almost 387% between 1999–2017. Deaths from alcoholic liver disease rose by around 41 percent, and suicides by around 38 percent, during this same period. The cost of addiction in lost human capital is extraordinary.
Collective Costs to Society
The direct costs of consumption related to those suffering from SUD are estimated to be $276 billion in 2010 dollars, the year of the study cited. The tab in todays dollars is $346 billion, adjusted for inflation per the consumer price index.
Annual cost - 2010 - in billions of US dollars for direct expense of procuring substances of abuse. The numbers represent drugs consumed by those afflicted with SUD (addicts). They are not gross consumption cost numbers for society at large. Adjusted for inflation, the total is $346 billion in 2021 dollars.
Total Societal Cost of Addiction
Estimated total costs of addiction in billions of dollars. The figures are from a study conducted in 2010. Current costs adjusted for inflation based on the Consumer Price Index, result in an estimate in current dollars approximating 1.23 trillion dollars, or 5.4% of current GDP.
Costs to Law Firms and Other Legal Services Providers
Like society, the largest SUD related expense to law firms and other legal services providers (Employers) is lost productivity. There doesn't yet exist a comprehensive study of SUD induced productivity loss in the legal profession, but It is surmised that it is at least proportionally in-line with society's experience, and could be significantly greater.
The employer is "paying" hidden costs of roughly 2.5 times the amount an SUD afflicted attorney pays for alcohol, or other substances. Lost productivity, health care costs associated with SUD, and SUD induced mistakes aren't line items broken out on financial statements. Though they escape the employer's conscious awareness, these costs are real, and they are substantial.
Attrition
The knee-jerk reaction, and often an exceptionally justifiable one, is to just fire the SUD afflicted attorney. But this approach comes with great costs that usually aren't consciously considered. Studies show that replacing an attorney costs between one and one and a half times that lawyer's annual salary. Jarrod F. Reich, Capitalizing on Healthy Lawyers: The Business Case for Law Firms to Promote and Prioritize Lawyer Well-Being, 65 Vill. L. Rev. 361 (2020).
According to a 2020 National Association for Law Placement Foundation study, 15 out of 20 law firm associates will leave their firms within six years, amounting to an 18% yearly turnover rate. Considerations related to well-being are foundational to the reasons these lawyers cite for leaving. The costs of turnover alone are staggering, and far exceed the cost of implementing efficacious programs to address SUD and emotional distress in the profession.
Exemplar
If we take a hypothetical law firm with 32 attorneys and assume averages found in pertinent research, we can estimate hidden costs attributable to SUD and emotional distress based on the most common cost variables associated with both problems
Assumption No. 1. 22% of attorneys suffer from SUD. They each spend an average of $16,000 per year on alcohol (the mid-point of the alcohol expense range).
Assumption No. 2.17% of the firm uses tobacco, in line with the average use rate for lawyers. Again, the mid-point on tobacco expense is assumed, which equates to $2,500 per year.
Assumption No. 3. Turnover in the our hypothetical firm mirrors the industry average at 18% per year.
Assumption No. 4. Average salary, excluding equity partners, is $220.000 per year.
Assumption No. 5. There are no other drug problems. Some attorneys smoke marijuana infrequently, and a few might use cocaine or other drugs on extremely rare occasions, but use of other substances is de minimis and doesn't rise to the level of SUD.
Hypothetical - Analysis
If 22% of the attorneys have drinking problems, those seven lawyers each spend $16,000 per year on alcohol, totaling $112,640. This impairment costs the firm 2.5 times the cost of the alcohol consumed, or $281,600 in lost productivity, increased health care costs, mistakes, etc.
If 17% are smokers, the cost of tobacco consumption equals $12,750 per year. 2.5 times that amount equals $31,875. Most of this cost is related to healthcare, but smokers need frequent breaks to leave the office to smoke. All of these little breaks throughout the day add up to substantial lost productivity at the end of the year.
Turnover is largely a function of a lack of well-being. Attorneys who feel overwhelmed, overcommitted, stressed and under appreciated will leave. The extraordinarily high turnover rate in legal firms is tied to work environments that promote a lack of well-being. This is perhaps the greatest and most unseen of all the hidden costs. Attrition is estimated to cost law firms between one to one and half times the salary of the departing attorney. We have conservatively used one times salary and assumed an average salary of $220,000 per year, taken as a composite of surveys of attorney salaries in practice for seven to ten years at established, reputable law firms.
At the 18% average turnover rate, six attorneys can be expected to leave. This dynamic equates to $1.267 million a year in hidden turnover costs. This number will vary from year-to-year, and from firm-to-firm.
The total annual hidden costs based on the assumptions are over $1.58 million a year. Reducing this number by a mere half results in a savings of over $780,000. The cost of implementing efficacious programs to address SUD and psychological distress is only a fraction of the overall hidden cost firms are absorbing by not investing properly in their greatest asset - Their lawyers.
The calculation is summarized in the following table.
The total costs of problematic drinking, smoking and turnover if rates are reduced by half are shown in the table below.
Our hypothetical law firm saves $781,925 per year ($1,580,675 less $798,750) by reducing problematic drinking, smoking, and turnover by half.
In his 2020 law review article, supra at p. 400, Professor Reich estimated that associate attrition costs a firm with 100 associates $5.6 million and a firm with 500 $28 million annually. Most turnover can be directly traced to diminished metrics of well-being.
Lost Potential
Lost potential is likely the greatest hidden cost that results from a lack of well-being and SUD. Those who spend an inordinate amount of time intoxicated, stressed, depressed, or overwhelmed with anxiety aren't spending time focused on developing professionally. Those who develop and grow professionally are far more apt to generate more monetarily. This classification of hidden cost is perhaps the hardest to objectively quantify, but it is likely the largest of all the hidden costs caused by diminished well-being. Human potential is an amazing phenomenon, but it is easily wasted in ways that aren't overtly obvious. Creating cultures and implementing structures that maximizes human potential through well-being contributes substantially to the organization's financial bottom line.