A debate has long raged concerning whether the contingency fee market <\/i>for legal services is or is not competitive. The debate has been fierce because <\/i>its stakes are sky high. If the market is competitive, current efforts to cut or <\/i>cap contingency fees are clearly wrong-headed. If the opposite, then at least <\/i>some efforts to address the market failure probably make sense.<\/i><\/p>\n
Leveraging the results of a novel empirical study and drawing from <\/i>both classical and behavioral economics, this <\/i>Article assembles the best evi<\/i>dence to date to resolve that age-old question. We find that, much like the <\/i>market for brokerage services in residential <\/i>real estate, the contingency fee <\/i>market for personal injury (PI) representation is neither efficient nor com<\/i>petitive. The market for PI representation does not behave like a competitive <\/i>market, and the preconditions for competition are lacking. Mirroring the <\/i>brokerage market, fees are not salient to consumers of legal services, and <\/i>stubborn informational asymmetries cloud consumer search.<\/i><\/p>\n
Even so, contingency fee caps<\/i>\u2014<\/span>many reformers\u2019 <\/i>reflexive fix<\/i>\u2014<\/span>are not <\/i>the answer. Price controls are generally harmful, and they are particularly <\/i>counterproductive when deployed in this context. Rather than promoting <\/i>access to legal services or reducing principal-agent problems, caps can be <\/i>counted on to restrict access and skew attorney incentives. Perhaps worse, <\/i>caps are regressive. Those who are already disadvantaged bear the brunt of <\/i>this reform.<\/i><\/p>\n We have a better idea. Because the problems we identify are chiefly <\/i>traceable to inadequate information, policymakers ought to use <\/i>\u201c<\/span>closing <\/i>statements<\/i>\u201d <\/span>to get proper information into consumers\u2019 hands.<\/i><\/p>\n Continue reading Competition and Contingency Fees<\/strong><\/em><\/a>.<\/p>\nEngstrom-and-Holland-Stergar_Competition-and-Contingency-Fees<\/a>\n","protected":false},"excerpt":{"rendered":" A debate has long raged concerning whether the contingency fee market for legal services is or is not competitive. The debate has been fierce because its stakes are sky high. […]<\/p>\n","protected":false},"author":13871,"featured_media":0,"parent":24239,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"abstract.php","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":"","_tec_slr_enabled":"","_tec_slr_layout":""},"class_list":["post-24246","page","type-page","status-publish","hentry"],"acf":[],"ticketed":false,"_links":{"self":[{"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/pages\/24246","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/users\/13871"}],"replies":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/comments?post=24246"}],"version-history":[{"count":3,"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/pages\/24246\/revisions"}],"predecessor-version":[{"id":24258,"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/pages\/24246\/revisions\/24258"}],"up":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/pages\/24239"}],"wp:attachment":[{"href":"https:\/\/www.law.georgetown.edu\/georgetown-law-journal\/wp-json\/wp\/v2\/media?parent=24246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}