August 25, 2005

As Ted noted yesterday, AEI's Liability Project has released Alex Tabarrok and Eric Helland's monograph advancing an economics-based defense of lawyers' contingency fees. I yield to few as an admirer of Tabarrok and Helland's work as a general matter, but longtime readers will be aware that my view of the contingency fee differs greatly from theirs. I also very much doubt that further empirical investigation will bear out their claim that contingency fees "do not cause higher awards" or that "contingent-fee limits are unlikely to reduce lawyers' income very much, since they will simply switch to hourly fees". In fact, I feel confident that most contingency-fee lawyers themselves, seeing their practice from the inside, would part company from Tabarrok and Helland on key points in this analysis. In Florida and other states, for example, is the organized bar just wasting its effort by furiously resisting contingency-fee limits in med-mal cases, since after all it could just switch to hourly rates and preserve its anticipated income?