Shrinking market for legal services is good news to me. People becoming less litigious? It is actually possible to do anything without a highly paid expert to tell you whether you're not breaking some complicated law? Does not sound like something to worry about.
The market is not shrinking; the problem is access to justice for ordinary people who cannot afford $500 an hour. Also, perverse incentives like "No win, no fee" encourage settlements and litigation without helping those who have been genuinely wronged or have an actual case that needs to go to trial.
How does no-win-no-fee do that? If you haven't been genuinely wronged and don't have an actual case that needs to go to trial, you can't realistically expect to win, so NWNF doesn't make much difference.
What NWNF is supposed to do is to make it possible for the not-rich to afford to defend themselves when wronged (either by taking legal action, or by declining to settle unfavourably when threatened with legal action). That doesn't seem terribly perverse, it's the opposite of "encouraging settlements", and it does help those who have been genuinely wronged.
The downside is that lawyers operating on a NWNF basis may be unwilling to take on any case whose prospects for success are poor. I suppose that might count as "encouraging settlements" -- in cases where you're not very likely to win and can't afford to pay the legal fees. I have trouble seeing why that is a bad thing.
If you haven't been genuinely wronged and don't have an actual case that needs to go to trial, you can't realistically expect to win
The premise that only deserving cases win isn't self-evident to me. With increasing awards and settlements, the expected value of a spurious case might be quite high.
If NWNF considers a settlement a win, and it is a much easier win than going all the way to court. Then there is a strong incentive to take on a case and push the settlement.
