More Bang for Your Buck: How to Improve the Incentive Structure for Indigent Defense Counsel

Abstract

The payment system and related incentive structure can have a major effect on an attorney’s behavior and this impact is somewhat predictable. Using data from the South Carolina Commission on Indigent Defense, we provide some evidence of how paying attorneys a flat fee can impact their behavior compared to paying them an hour hourly rate. Unsurprising, the effect is that attorneys put forth less effort when being paid a flat fee. It is important to recognize the trade-offs between controlling costs and providing effective representation that any payment system possesses. Using economic theory and a simple model, we discuss the various benefits and drawbacks of the different payment systems that are common for indigent defense attorneys. Finally, we discuss how the different payment systems can be improved to better align the attorney’s interests with the State’s interests.

Keywords: Indigent Defense, Incentives

JEL Classification: K41, K14