Suppose a plaintiff hires a lawyer to represent her in a court case.The lawyer will be paid a fixed fee.Under this contract,
A) production efficiency is achieved.
B) the client bears all of the risk.
C) the lawyer has an incentive to lie about his hours worked.
D) All of the above.

Question

Quizplus · Accepted Answer

A fixed fee contract places all of the risk on the client, as they are responsible for paying the agreed-upon fee regardless of the outcome of the case. In this scenario, there is no production efficiency or incentive for the lawyer to lie about their hours worked.

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