Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will be paid by the hour. Under this contract,

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When a lawyer is paid by the hour, efficiency may not be achieved because the lawyer has an incentive to work more hours than necessary, increasing the cost for the client. The client bears all the risk of the case taking longer than expected, leading to higher fees. Additionally, there is a potential incentive for the lawyer to overstate the hours worked to increase their compensation, although professional ethics and legal standards aim to prevent such behavior.

Suppose a Plaintiff Hires a Lawyer to Represent Her in a Court