'Nudging' Better Lawyer Behavior: Using Default Rules and Incentives to Change Behavior in Law Firms

Abstract

This article examines how incentives in law firms can affect lawyer behavior and suggests some possible changes to incentive structures and default rules that might improve the ethical behavior of lawyers.

In the changing landscape of law practice — where law firm profits are threatened by such changes as increased pressure from clients to economize and the concomitant opportunities for clients to shop around for the most efficient lawyers — are there ways to change how things are done in law firms so that firms can provide more efficient and ethical service? This article suggests that an understanding of cognitive biases and basic behavioral economics will help law firms tweak their incentives and default rules to promote the improved delivery of legal services.

Keywords: legal profession, legal ethics, professional responsibility, behavioral economics, social science, incentives, default rules, ethics

JEL Classification: A19, A10, D7