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

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.