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On Plaintiff Preferences Regarding Methods of Compensating Lawyers

  • Tim Friehe EMAIL logo and Yannick Gabuthy
Published/Copyright: April 25, 2019
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Abstract

This paper analyzes a litigation contest in which the plaintiff’s lawyer and the defendant choose effort. The plaintiff selects the relative importance of a contract component related to the judgment (similar to contingent fees) and a component related to the lawyer’s efforts (similar to conditional fees) to ensure lawyer participation and guide the lawyer’s decision-making. For our setup, we find that the plaintiff considers the component related to the lawyer’s effort to be the relatively more desirable instrument in the light of its effort-inducing and cost characteristics. However, high levels of the lawyer’s outside utility may limit the role of this component.

JEL Classification: K41

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Published Online: 2019-04-25

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