What Lawyers Have In Common With Auto Mechanics and Dentists

Because of its complexity, Hadfield points out, legal help is what economists call a “credence good”—a good “provided by an expert who also determines a buyer’s needs” because the buyer is “unable to assess how much of the good or service they need; nor can they assess whether or not the service was performed or how well.” The classic examples are auto repair and dentistry, but most legal services qualify, too. Just as the average consumer is unable to verify how many cavities he has or how many auto parts he needs replaced, he’s often unable to question a lawyer on just how many hours of lawyering will be sufficient to resolve his problem. The effect is a pernicious lack of transparency “about the actual value of a lawyer.” And since the costs are sunk in the event of a loss, there’s a strong incentive for already-paying clients not to skimp.

The legal profession also operates, Hadfield notes, within what is essentially a “monopoly on coercive dispute resolution”: If you have a legal issue you don’t really much choice about where to go. You have to deal with a system controlled by lawyers, all of whom have come up through the system.

Michael Zuckerman, in The Atlantic, on the challenges of an affordable legal system.

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