The economics, in full.
The billing model is the argument, not a footnote.
Our white papers make the formal case behind the firm: that hourly billing is a structural problem, not a question of individual character, and that aligning fees with outcomes is the fix. Each paper is grounded in the academic literature—principal-agent theory, behavioral economics, and industrial organization.
Misaligned Incentives
The principal-agent problem and the case against hourly billing.
Executive SummaryWhen you hire an attorney who bills by the hour, you create a classic principal-agent problem: your lawyer has information you don't and an incentive to bill hours you may not need. This paper lays out the formal economics—from Stephen Ross's 1973 framing through modern game-theoretic models—and shows why a flat fee realigns the relationship.
Introduced in the Kynigos publication Your Lawyer Has an Incentive Problem
Introduced in the Kynigos publication Why Divorce Makes You Bad at Math
The Market for Lemons
Flat fees as a quality signal in the market for legal services.
Executive SummaryGeorge Akerlof's 1970 “market for lemons” showed how hidden quality can collapse a market: when buyers can't tell good from bad, the price falls to the level of the bad and the good exits. Legal services are a textbook case—a credence good the client cannot evaluate even after delivery. This paper applies the lemons model to legal fees and argues that a flat fee is a credible quality signal: a lawyer who fixes the price before the work commits to the efficiency the hourly model has every reason to avoid.
More papers in the series—behavioral contract theory and the non-compete trap, and moral hazard in the legal opinion letter—are in production.