CONTINGENT FEES FOR ATTORNEYS - AN ECONOMIC-ANALYSIS

When there is asymmetric information, contingent fees can allow client s to signal the qualities of their cases and attorneys to signal the q uality of their advice. Thus, a well-informed client who has a high-qu ality case will be willing to pay a relatively high fixed fee and a re latively low contingency percentage, while a client with a low-quality case will prefer a low fixed fee and a high contingency percentage. I n contrast, a well-informed high-quality attorney will signal her abil ity by working for a relatively high contingency percentage.