Chapter 8

1. Consider a 100% contingency contract between a client and a lawyer whereby the lawyer pays the client a fixed amount up front and then the lawyer retains the full amount of whatever recovery the case yields in a settlement or trial. What are the incentive and risk-sharing aspects of this contract? Can you think of any arguments for why such an arrangement should not be allowed?

2. Discuss the problem of court delay in a supply-demand framework. Does it reflect an excess supply or demand? How should the cost of filing a lawsuit be adjusted to eliminate the delay? Can you think of a reason why this might not be a good policy? (Hint: Think of the rationale for laws against ticket scalping.)