Direkt zum Inhalt

What Clients Want: Choices between Lawyers' Offerings

Discussion Papers 1460, 44 S.

Flóra Felsö, Sander Onderstal, Jo Seldeslachts

2015

get_appDownload (PDF  509 KB)

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.

Jo Seldeslachts

Research Associate in the Firms and Markets Department



JEL-Classification: C25;D43;K10;K40
Keywords: Lawyers' fee arrangements, clients' choices, discrete choice models
Frei zugängliche Version: (econstor)
http://hdl.handle.net/10419/108731

keyboard_arrow_up