What Clients Want: Choices between Lawyers' Offerings

Flóra Felsö, Sander Onderstal and Jo Seldeslachts

No 1460, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We analyze a client's choice of contract in auctions where Dutch law firms compete for cases. The distinguishing feature is that lawyers may submit bids with any fee arrangement they prefer: an hourly rate, a fixed fee or a \mixed fee," which is a time-capped fixed fee plus an hourly rate for any additional hours should the case take longer than expected. This format of selling legal services is unusual in that it both forces lawyers to compete directly against each other and allows clients to easily compare these different offers. We estimate a choice model for clients and find robust evidence that hourly rate bids are a client's least-preferred choice. Our findings tentatively contradict lawyers' often made argument that hourly rates are in a client's best interest.

Keywords: Lawyers' fee arrangements; clients' choices; discrete choice models (search for similar items in EconPapers)
JEL-codes: C25 D43 K10 K40 (search for similar items in EconPapers)
Pages: 44 p.
Date: 2015
New Economics Papers: this item is included in nep-dcm and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: What clients want: Choices between lawyers' offerings (2015)
Working Paper: What Clients want: Choices between Lawyers' Offerings (2014)
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