{"id":5243,"date":"2006-04-02T21:34:10","date_gmt":"2006-04-03T01:34:10","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/formerlyknownas\/2006\/04\/02\/contingency-fees-market-failu"},"modified":"2011-08-05T14:54:02","modified_gmt":"2011-08-05T18:54:02","slug":"contingency-fees-market-failure","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2006\/04\/02\/contingency-fees-market-failure\/","title":{"rendered":"contingency fees: market failure"},"content":{"rendered":"

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Ted Frank of Overlawyered<\/FONT><\/A><\/EM> and <\/FONT>Point of Law<\/FONT><\/EM><\/A> usually approaches contingency fee <\/FONT><\/DIV>
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issues a bit differently than I do.  He is far more steeped in economics than I, and <\/FONT><\/DIV>
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he brings the perspective of a “tort reformer.”   As ethicalEsq<\/EM> <\/FONT>said<\/FONT><\/A> in July 2003, <\/FONT><\/DIV>
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tort reform is a matter of political and social policy, not legal ethics, and it is not <\/FONT><\/DIV>
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my fight.  My perspective — by temperament, and after a dozen years practicing <\/FONT><\/DIV>
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antitrust law at the FTC — is that of a consumer and competition advocate.  I want <\/FONT><\/DIV>
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legal clients to receive the benefits of both professional responsibility rules (with <\/FONT><\/DIV>
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related fiducial rights) and competition, and I believe that a well-informed client can <\/FONT><\/DIV>
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protect his or her interests far better than one treated like a mushroom (viz.<\/EM>, kept <\/FONT><\/DIV>
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in the dark and covered with manure). <\/FONT><\/DIV>
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                                                                          ATLA: at least \"one bar association<\/EM><\/FONT><\/FONT><\/DIV>
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Personal injury lawyers, however, seem to get just as upset with me as they do with <\/FONT><\/DIV>
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tort reformers, even though I have never advocated limiting the right to sue (except when <\/FONT><\/DIV>
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a claim is truly frivolous — that is, without a colorable basis in fact or law<\/FONT>), nor capping <\/FONT><\/DIV>
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the amount paid out in damages.  However, although I <\/FONT>want clients to get all<\/EM> that they <\/FONT><\/FONT><\/DIV>
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deserve, that means having their lawyers take only <\/EM><\/FONT><\/FONT>the <\/EM>fees that they deserve<\/EM>.  That’s <\/FONT><\/FONT><\/DIV>
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what has gotten me in hot water with the personal injury bar from <\/FONT><\/FONT>the very first time I <\/FONT><\/DIV>
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questioned whether application of a “standard” or customary <\/FONT>contingency fee to virtually <\/FONT><\/DIV>
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every client is ethical — before I had ever heard of a tort reform movement.<\/FONT><\/DIV>
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What does this have to do with the title of today’s post?  Well, this week, Ted Frank<\/FONT><\/DIV>
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wrote at Overlawyered<\/EM><\/FONT><\/FONT><\/A> (“Search Engine Index,” March 27, 2006) about the interesting <\/FONT><\/DIV>
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(but not surprising) fact that:<\/FONT><\/DIV>
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“Six of the eight most expensive Google AdSense search terms are for<\/FONT><\/DIV>
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attorneys . . . with “mesothelioma lawyers” topping the charts.”  [per<\/FONT><\/DIV>
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 <\/FONT>CyberWyre<\/FONT><\/EM><\/A>] <\/FONT><\/DIV><\/BLOCKQUOTE>
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In addition, at <\/FONT>Inside Opinions<\/FONT><\/EM><\/A>, Robert Ambrogi pointed to Ted and pointed out that: <\/FONT><\/DIV>
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Other chart-<\/FONT>topping search terms include “tax attorney,” “car accident lawyer” and <\/FONT><\/DIV>
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“auto accident <\/FONT>attorney.”<\/FONT><\/DIV>
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Ted concluded that the lawyers were willing to pay very high click-through rates <\/FONT><\/DIV>
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for AdSense “because there is a lot of easy profit to be made.”  He then asks: <\/FONT><\/DIV>
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“The interesting question is what market failure has occurred such that <\/FONT><\/DIV>
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this gigantic profit is not being competed away by, say, offering clients <\/FONT><\/DIV>
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a smaller attorneys’ fee. This is surplus that should be going to clients, <\/FONT><\/DIV>
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not to Google.”<\/FONT><\/DIV><\/BLOCKQUOTE>
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“googleSign”<\/FONT><\/DIV>
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That’s where the tort-reforming economist in Ted starts sounding an awful lot <\/FONT><\/DIV>
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like the ethicist-trustbustin’ consumer advocate in me.. . .  <\/FONT><\/DIV>
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<\/FONT> <\/DIV>
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. . . . please click to <\/EM>read the rest<\/EM><\/A> of this post, <\/EM><\/FONT><\/DIV>
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which is part I of a four-part series, that includes:<\/FONT> <\/EM><\/DIV>
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