f/k/a archives . . . real opinions & real haiku

April 2, 2006

contingency fees: market failure

Filed under: pre-06-2006 — David Giacalone @ 9:34 pm

Ted Frank of Overlawyered and Point of Law usually approaches contingency fee

issues a bit differently than I do.  He is far more steeped in economics than I, and

he brings the perspective of a “tort reformer.”   As ethicalEsq said in July 2003,

tort reform is a matter of political and social policy, not legal ethics, and it is not

my fight.  My perspective — by temperament, and after a dozen years practicing

antitrust law at the FTC — is that of a consumer and competition advocate.  I want

legal clients to receive the benefits of both professional responsibility rules (with

related fiducial rights) and competition, and I believe that a well-informed client can

protect his or her interests far better than one treated like a mushroom (viz., kept

in the dark and covered with manure).


                                                                          ATLA: at least one third gray bar association


Personal injury lawyers, however, seem to get just as upset with me as they do with

tort reformers, even though I have never advocated limiting the right to sue (except when

a claim is truly frivolous — that is, without a colorable basis in fact or law), nor capping

the amount paid out in damages.  However, although I want clients to get all that they

deserve, that means having their lawyers take only the fees that they deserve.  That’s

what has gotten me in hot water with the personal injury bar from the very first time I

questioned whether application of a “standard” or customary contingency fee to virtually

every client is ethical — before I had ever heard of a tort reform movement.


What does this have to do with the title of today’s post?  Well, this week, Ted Frank

wrote at Overlawyered (“Search Engine Index,” March 27, 2006) about the interesting

(but not surprising) fact that:

“Six of the eight most expensive Google AdSense search terms are for

attorneys . . . with “mesothelioma lawyers” topping the charts.”  [per

In addition, at Inside Opinions, Robert Ambrogi pointed to Ted and pointed out that:

Other chart-topping search terms include “tax attorney,” “car accident lawyer” and

“auto accident attorney.”


Ted concluded that the lawyers were willing to pay very high click-through rates

for AdSense “because there is a lot of easy profit to be made.”  He then asks:

“The interesting question is what market failure has occurred such that

this gigantic profit is not being competed away by, say, offering clients

a smaller attorneys’ fee. This is surplus that should be going to clients,

not to Google.”



That’s where the tort-reforming economist in Ted starts sounding an awful lot

like the ethicist-trustbustin’ consumer advocate in me.. . . 


. . . . please click to read the rest of this post,

which is part I of a four-part series, that includes: 




No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Powered by WordPress