Conditional Versus Contingent Fees
17 Pages Posted: 23 Sep 2004
There are 3 versions of this paper
Conditional Versus Contingent Fees
Conditional Versus Contingent Fees
Conditional Versus Contingent Fees
Date Written: August 2004
Abstract
Under contingent fees, the attorney gets a share of the judgement; under conditional fees, the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the clients' cases. If there is asymmetric information about the merits of cases, in equilibrium attorneys will offer only conditional fees. If there is asymmetric information about the risk of cases, only contingent fee contracts are offered in equilibrium.
Keywords: Contingent fees, conditional fees, adverse selection, moral hazard, screening, pooling
JEL Classification: D82, K10
Suggested Citation: Suggested Citation
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