Strategic Decisions on Lawyers Compensation in Civil Disputes

10 Pages Posted: 22 Oct 2007

See all articles by Kyung Hwan Baik

Kyung Hwan Baik

Sungkyunkwan University

In-Gyu Kim

Hallym University - Department of Economics

Abstract

We study a model of civil dispute with delegation in which a plaintiffs lawyer works on a contingent-fee basis but a defendants lawyer on an hourly fee basis. We first derive the condition under which delegation to the lawyers brings both litigants more payoffs compared with the case of no delegation. We then show that under this profitable delegation condition, the contingent-fee fraction for the plaintiffs lawyer is about one-third. Next, allowing the plaintiff to choose between the two fees, we show that under the profitable delegation condition, the plaintiff chooses the contingent fee, given that the defendant adopts the hourly fee.

JEL Classification: K41, K13, D74, D72

Suggested Citation

Baik, Kyung Hwan and Kim, In-Gyu, Strategic Decisions on Lawyers Compensation in Civil Disputes. Economic Inquiry, Vol. 45, Issue 4, pp. 854-863, October 2007. Available at SSRN: https://ssrn.com/abstract=1022730 or http://dx.doi.org/10.1111/j.1465-7295.2007.00054.x

Kyung Hwan Baik (Contact Author)

Sungkyunkwan University ( email )

Department of Economics
Seoul, 110-745
Korea, Republic of (South Korea)
+82-2-760-0432 (Phone)
+82-2-744-5717 (Fax)

In-Gyu Kim

Hallym University - Department of Economics ( email )

Chunchon Kangwon, 200-702
South Korea
+82-361-240-1366 (Phone)
+82-361-240-1366 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
27
Abstract Views
422
PlumX Metrics