GMAT Official Guide 2019 More and more law firms

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More and more law firms specializing in corporate taxes are paid on a contingency-fee basis. Under this arrangement, if a case is won, the firm usually receives more than it would have received if it had been paid on the alternate hourly rate basis. If the case is lost, the firm receives nothing. Most firms are likely to make more under the contingency-fee arrangement.

Which of the following, if true, would most strengthen the prediction above?

A. Firms that work exclusively under the hourly rate arrangement spend, on average, fewer hours on cases that are won than on cases that are lost.

B. Some litigation can last for years before any decision is reached, and, even then, the decision may be appealed.

C. Firms under the contingency-fee arrangement still pay their employees on an hourly basis.

D. Since the majority of firms specialize in certain kinds of cases, they are able to assess accurately their chances of winning each potential case.

E. Firms working under the contingency-fee arrangement take in fewer cases per year than do firms working under the hourly rate arrangement.

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by deloitte247 » Fri Jun 29, 2018 2:08 am

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Option A - INCORRECT.
This prediction is wrong because, for a case to be won or loose you must have spent series of hours on the case which the ending can only ascertain the outcome. However this option does not strengthen the prediction on how to achieve more payment when you win a case.

Option B - INCORRECT.
This option maybe right but it is not accurately true pertaining the argument in this reasoning.

Option C - INCORRECT.
This option is not seen as the basics of the argument, as payment of employee on a hourly bases is not the reason why the contingency-fee is appropriated to cases won.

Option D - CORRECT.
This option has been able to strengthen the prediction of the argument. Since the majority of firms specialize in different kind of cases and firms specializing in corporate taxes is one of them, then it is possible for them to win more cases on tax issues since that is what they specialize on making the contingency-fee in their favor rather the hourly paid fees paid to the other firms who does not have specialty in such field.

Option E - INCORRECT.
This statement is possible but it is not predictable that firms not working under the contingency-fee will earn higher than firms that does have specialty and still work base on contingency-fee.