Abstract
We use a theoretical model and experimental test to consider the possibility that contingent fees may improve the quality of legal services by allowing clients to screen low-quality attorneys. The model suggests that caps on contingent fees may reduce the average quality of legal representation by allowing low-quality attorneys to remain in the market and decrease client welfare by allowing attorneys to earn rents. Experimental evidence provides support for these predictions, showing that client welfare and screening decrease as caps become more stringent, even if the caps do not prevent screening.
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