Playing It Safe with Low Conditional Fees versus Being Insured by High Contingent Fees

摘要

Under contingent fees the attorney gets a share of the judgment; under conditional fees he gets an upscale premium if the case is won, a premium unrelated, however, to the adjudicated amount. This article compares conditional and contingent fees in a framework where lawyers choose between a safe and a risky litigation strategy. Under conditional fees lawyers prefer the safe strategy; under contingent fess, the risky one. Risk-averse plaintiffs prefer conditional fees over contingent fees when lawyering costs are low and vice-versa for high lawyering costs.