forthcoming in The International Review of Law and Economics Expertise, Contingent Fees, and Insufficient Attorney Effort

Plaintiffs have either developed or less developed cases. Both cases should be taken to court, yet less developed cases need more work by the attorney than developed cases. Only the attorney knows whether a case needs additional work or not; the plaintiff is forced to rely on the attorney’s recommendation. We show that under contingent fees attorneys may provide insufficient effort, i.e., they will not work hard on the less developed cases. In contrast, an hourly fee always induces attorneys to take efficient effort