What clients want: Choices between lawyers' offerings

Flóra Felső, Sander Onderstal and Jo Seldeslachts

No 486733, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

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 dierent oers. 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)
Date: 2015-02
Note: paper number MSI_1504
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Published in FEB Research Report - MSI_1504

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https://lirias.kuleuven.be/retrieve/306454 MSI_1504 (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:486733

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