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Self-regulation of the legal profession and quality in the market for legal services: an economic analysis of lawyers’ reputation

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  • Camille Chaserant
  • Sophie Harnay

Abstract

Our article intends to show that self-regulation of the legal profession helps to regulate the quality of legal services in a market characterized by strong information asymmetries. Our model highlights the role of the collective reputation of the profession jointly with the individual reputation of lawyers to sustain high quality. It shows that a high-quality steady state exists in a market for legal services and that the likelihood of high quality increases when the market is self-regulated by the legal profession as compared with the situation where there is no self-regulation. Moreover, the profession has an incentive to maintain a good collective reputation as this increases the clients’ willingness to pay for legal services and, therefore, the rent that accrues to lawyers as a whole. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Camille Chaserant & Sophie Harnay, 2015. "Self-regulation of the legal profession and quality in the market for legal services: an economic analysis of lawyers’ reputation," European Journal of Law and Economics, Springer, vol. 39(2), pages 431-449, April.
    • Handle: RePEc:kap:ejlwec:v:39:y:2015:i:2:p:431-449
    DOI: 10.1007/s10657-013-9420-1
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    Cited by:

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    2. Szczygielski Krzysztof, 2020. "A note on the optimal scope of professional self-regulation," Central European Economic Journal, Sciendo, vol. 7(54), pages 218-226, January.
    3. Wenming Xu & Yan Liu, 2021. "Does reputational capital affect credit rating agencies?: empirical evidence from a natural experiment in China," European Journal of Law and Economics, Springer, vol. 51(3), pages 433-468, June.
    4. Kim Oosterlinck & Anne-Sophie Radermecker, 2021. "Regulation or Reputation? Evidence from the Art Market," Working Papers CEB 21-006, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Self-regulation; Collective reputation; Individual reputation; Legal services; K2; L14; L15; L44; L51; L84;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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