How Lawyers Compete

Competition Policy and Antitrust

Article Snapshot

Author(s)

Michael B. Abramowicz

Source

Regulation, Summer 2004, pg. 38

Summary

This paper asks if more competition between lawyers could help consumers.

Policy Relevance

Having lawyers compete more to offer lower prices might not help consumers .

Main Points

  • Lawyers' contingency fees, that is, the share of the award they agree to accept in payment if they win the case, tend to be uniform and do not change much over time. This suggests there is not much price competition between lawyers.

  • Shopping for the lowest price might not be a good idea for most clients, because a poor lawyer might lose the case. And lawyers who get a bigger share of the winnings might try harder to win.

  • Lawyers can and do compete by offering better quality.  It is hard for clients to identify the best lawyers, but word of mouth helps. And the best lawyers refuse weak cases.

  • Letting clients sell their claims in a market through brokers might help.

  • Helping people bring more lawsuits is not necessarily a good thing.

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