Conditional Versus Contingent Fees
Posted: 29 Feb 2008
Date Written: January 2007
Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the clients' cases. If there is asymmetric information about the expected level of adjudication, in equilibrium attorneys will offer only conditional fees. If there is asymmetric information about the risk of cases, only contingent fee contracts are offered in equilibrium.
Keywords: JEL classifications: D82, K1
Suggested Citation: Suggested Citation