INFORMATION COSTS AND LEGAL SERVICES

In: Law & Policy, Band 4, Heft 4, S. 475-500

Abstract

Most of the current debate on the effective provision of legal services ignores the centrality of information costs. It is argued that conventional controls do not address this issue, especially where clients are infrequent users of legal services and the services required are nonroutine. In this segment of the market for legal services there is an "adverse selection" problem that will drive down the quality of legal services. Existing methods of ensuring quality legal services to this segment of the market are unlikely to be effective. It is suggested that only legal agents with incentives and opportunities to acquire information can mitigate the adverse selection problem. The English bifurcation of lawyers into barristers and solicitors partly performs such a function and provides a model for possible innovations in the North American context.