Working Paper: CEPR ID: DP5959
Authors: Paul A. Grout; Ian Jewitt; Silvia Sonderegger
Abstract: This paper discusses proposed governance reforms of legal services markets. The model distinguishes between a status quo position supported by a system of professionally enforced collective reputation and forms of governance based more squarely on market mechanisms. We identify a number of forces which determine the success of reform. Focussing particularly on the rent recapture and relationship substitution effects, we highlight their impact on client welfare and quality of legal services in different types of market according to whether clients are transient or repeated users of the service.
Keywords: governance; legal services
JEL Codes: D02; D78; D86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| self-regulatory model (M38) | client welfare (I30) |
| market-based governance model (G38) | client welfare (I30) |
| delicensing (D45) | client welfare (I30) |
| certification (Q48) | client welfare (I30) |
| transparency (G38) | client welfare (I30) |
| accountability + insufficient transparency (G38) | service quality (L15) |
| client type + interaction frequency (D19) | impact of reforms on client welfare (D60) |