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Paying by the hour: the least appealing option for clients of lawyers

Report of July 11, 2016

In this study, 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 wish. We find robust evidence that bids offering hourly rates are less attractive to clients. Our findings tentatively contradict lawyers’ often-made argument that hourly rates are in a client’s best interest.

The full report by Jo Seldeslachts in:
DIW Economic Bulletin 26/2016 (PDF, 108.83 KB)