{'fraction_non_alphanumeric': 0.017543859649122806, 'fraction_numerical': 0.0, 'mean_word_length': 5.077868852459017, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
The Pricing of Legal Services: A Contractual Solution to the Problem of Bilateral Opportunism

THE traditional theory of exchange implicitly assumes that the seller receives the contractually determined price at the time the (instantaneous) exchange is made. However, the actual process of exchange is more convoluted. Not only is timing of payment subject to variation (sometimes occurring before supply and sometimes after), but more important, the effective price may be determined ex ante or ex post supply.' Examples of the latter complication arise in many service markets where contracts may be negotiated on a flat fee basis (ex ante pricing) or an hourly rate basis (ex post pricing). For example, in the market for a legal service, such as an uncontested divorce, we simultaneously observe some law firms quoting a fixed fee for the service and others pricing it on an hourly rate basis. In this paper we consider the hypothesis that the selection of contractual provisions for price timing in conjunction with variations in the degree of firm reputation (brand name) may provide a solution to the problem of bilateral opportunism between contracting parties. The particular problem addressed is that a customer negotiating a fixed fee contract may have the incentive to understate the complexity of his situation in order to secure a low fee whereas the firm negotiating an hourly rate contract may have the incentive, once the service is performed, to overstate the time