Economic Analysis for Regulating Legal Service Pricing: the Ethiopian Case

Abstract

This paper evaluates the inter link between law and economics in the legal service industry. By assessing how the legal service price is determined between the client and the advocate, it evaluates the fairness and effectiveness of the existing law governing legal fees in light of the basic economic theories in market regulation. By employing both doctrinal and non-doctrinal legal research methods it, was established that the Ethiopian legal service market on pricing is prone to market failures, and regulation must be in place to avoid the gaps of market inefficiency. The theoretical underpinnings on legal service markets have been found to be strongly substantiated in the practical base and justifications. Finally, it was found that the Ethiopian legal framework on pricing was less regulated than what economics suggested, thereby increasing the risk of market failure.