King Rat (gkr) wrote,
King Rat
gkr

Eco 200: injury suits

(group) A newspaper headline says, "Injury Suits Rise As Other Legal Work Dries Up." Use the concept of opportunity cost to explain what is happening. Would laws that severely restrict injury suits reduce the cost of hiring a lawyer to draw up a last will and testament?

To explain, I'll postulate three opportunities for lawyers that cover much of the domain of opportunities available: suing for breach of contract (other legal work), personal injury suits, and getting out of the legal profession. As the supply of breach of contract matters dries up, once less lucrative injury suits become marginally better than getting out of the legal profession (which entails large costs to learn something else). Other legal work may be better opportunity, but if there is little supply of them, the cost to obtain that work (i.e., marketing) goes up.

A law that severely restricted injury suits might lower the cost of hiring a lawyer to draw up a last will and testament. But I don't consider it too likely. It only changes the opportunity cost of one alternative. Vast numbers of lawyers might simply take up teaching at community colleges as the opportunity there is high.

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