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Lawyers' Choice: A Theoretical Appraisal of Litigation Investment Decisions

Published online by Cambridge University Press:  02 July 2024

Earl Johnson Jr.
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Abstract

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This article explores economic determinants of lawyer behavior which in turn shape basic decisions affecting their clients in such areas as whether to file litigation, how much discovery to employ, whether to accept a settlement offer, and the like. Three methods of compensating lawyers are identified: fee-for-service, contingent-fee, and third-party payment. It is hypothesized that each of these methods creates very different configurations of economic incentives, some of which conflict with the best interests of clients. The possibilities for maximizing various of these economic goals are discussed along with the limits— economic and noneconomic—on such behavior. Finally, the article suggests some potential applications of this analysis for public policy and further research.

Type
Part Two-The Civil Litigation Research Project: A Dispute-Focused Approach
Information
Law & Society Review , Volume 15 , Issue 3-4: Special Issue on Dispute Processing and Civil Litigation , 1981 , pp. 567 - 610
Copyright
Copyright © 1981 The Law and Society Association.

Footnotes

*

This article went through an unusually lengthy period of gestation. Some of the basic concepts were sketched in a working paper prepared in 1973 for National Science Foundation Grant GS-33823, “Social-Economic Impact of Legal Practice.” Others were spelled out in a memorandum prepared in 1978 during the early stages of the Civil Litigation Research Project. These notions were drawn together and amplified in a paper presented at the May, 1979 meeting of the Law and Society Association. Along the way, various versions have been scrutinized by Neil Komesar, Richard Lempert, Richard Markovitz, Victor Rosenblum, David Trubek, and most of the Civil Litigation Research Project staff. The article has profited immensely from their criticism and suggestions, but I remain responsible for residual errors. The opinions and conclusions expressed in this article are solely my own and not of the U.S. Department of Justice or the National Science Foundation.

References

Cases Cited

Bates v. Arizona State Bar, 433 U.S. 350, 97 S. Ct. 2691, 1977.Google Scholar
Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 A S. Ct. 2004, 1975.Google Scholar