Contingent Fees for Attorneys: An Economic Analysis

Daniel F. Rubinfeld and Suzanne Scotchmer

RAND Journal of Economics, 1993, vol. 24, issue 3, 343-356

Abstract: When there is asymmetric information, contingent fees can allow clients to signal the qualities of their cases and attorneys to signal the quality of their advice. Thus, a well-informed client who has a high-quality case will be willing to pay a relatively high fixed fee and a relatively low contingency percentage, while a client with a low-quality case will prefer a low fixed fee and a high contingency percentage. In contrast, a well-informed high-quality attorney will signal her ability by working for a relatively high contingency percentage.

Date: 1993
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