Contingency fees:
a. If the plaintiff is more averse to risk than his or her lawyer, would this fact incline the client to prefer a contingency fee or an hourly fee?
b. Under a contingency fee, the plaintiff bears none of the lawyer’s costs of a trial. Consequently, the plaintiff can take a hard position in bargaining over a settlement. Explain why the plaintiff’s lawyer might also benefit from this commitment to hard bargaining.
c. Contingency fees are common for the plaintiff’s lawyer in America, but not for the defendant’s lawyer. Under a contingency fee contract, the defendant would pay a fixed amount to a lawyer at the beginning of the legal process and the lawyer would receive a fraction of the trial judgment. Are the incentive effects of contingency fees the same for the plaintiff’s lawyer and the defendant’s lawyer?