Ethical Jobs Plan: Let’s Put Lawyers in the 99%

19th Century American lawyer without law degree or bar exam credentials. Reputed to be effective, honest.

Despite the fact that such a change might be ruinous for me personally, since a large portion of ProEthics income comes from providing bar association-mandated continuing legal education courses on ethics, I have to endorse the arguments made by Brookings Fellow Clifford Winston and George Mason Law Professor Illya Somin for eliminating barriers to entry in the legal profession, such as mandatory law school attendance, the bar exam, and bar membership.

Winston writes:

“For decades the legal industry has operated as a monopoly, which has been made possible by its self-imposed rules and state licensing restrictions — namely, the requirements that lawyers must graduate from an American Bar Association-accredited law school and pass a state bar examination. The industry claims these requirements are essential quality-control measures because consumers do not have sufficient information to judge in advance whether a lawyer is competent and honest. In reality, though, occupational licensure has been costly and ineffective; it misleads consumers about the quality of licensed lawyers and the potential for non-lawyers to provide able assistance.

“Rather than improving quality, the barriers to entry exist simply to protect lawyers from competition with non-lawyers and firms that are not lawyer-owned — competition that could reduce legal costs and give the public greater access to  legal assistance.
In fact, the existing legal licensing system doesn’t even do a great job at protecting clients from exploitation. In 2009, the state disciplinary agencies that cover the roughly one million lawyers practicing in the United States received more than 125,000 complaints, according to an A.B.A. survey. But only 800 of those complaints — a mere 0.6 percent — resulted in disbarment.

“What if the barriers to entry were simply done away with?

“Legal costs would be reduced because non-lawyers, who have not had to make a costly investment in a three-year legal education, would compete with lawyers, who in many states are the only options for basic services like drafting wills. Because they will have incurred much lower costs to enter the field — like taking an online course or attending a vocational school — and can operate as solo practitioners with minimal overhead, these non-lawyers would force prices to fall. The poor would benefit from the lower prices for non-criminal matters, and poor litigants, who might be unrepresented in criminal matters like hearings because they could not afford a lawyer and because of dwindling state legal aid, would be better off.

“At the same time, if corporations — and not just law firms, now structured as partnerships — could provide legal representation, their technological sophistication and economies of scale could offer much more affordable services than established law firms do. These firms, in turn, would have to reduce prices to compete. “

I see no flaw with this reasoning, nor this, from Professor Somin, on the benefits of making bar exams voluntary. Over 30% of all law grads never pass the exam, which doesn’t measure very much of what it takes to be a good lawyer, only facts, most of which are readily available whether they have been effectively memorized or not. Somin writes:

“The main fear that many have about abolishing the bar exam is that consumers will have no way of assessing lawyer quality without becoming legal experts themselves. Most clients don’t know much about law, after all.

“However, markets have numerous tools for dealing with this problem without resorting to government-mandated licensing. The most obvious is reputation. Clients can’t directly assess a lawyer’s competence. But they can learn about his reputation from other lawyers, previous clients, and others. Law firm brand names are also useful. If I hire Wachtel or Cravath, I may not know much about the individual lawyers who will work on my case. But I do know that the firm has a strong reputation overall, and that they have powerful incentives to hire lawyers who will uphold it. Less sophisticated clients can also piggyback on the knowledge of better-informed ones.

“Voluntary certification is another useful tool for consumers. If state-mandated bar exams were abolished, both bar associations and other private groups would still be free to certify lawyers using either tests or other standards they deem appropriate. If lawyers certified by the bar association are generally more competent than others, sophisticated clients will soon realize that, and the knowledge will quickly trickle down to less sophisticated ones. Over time, lawyers certified by the bar association will command higher salaries and enjoy more prestige than those who are not.

“Superficially, voluntary certification seems little different from the old bar exam system. After all, lawyers would still have incentives to meet standards established by some professional organization. However, there are three big differences. First, abolishing state-mandated exams allows different certification systems to compete against each other. This stimulates improvement in standards over time and also increases consumer choice. Second, since no certifying body will have a monopoly, these groups will have strong incentives to improve the quality of their certification systems. If the bar association’s certification system turn out to be inferior to that of the Better Business Bureau, for example, fewer consumers will pay attention to it, and fewer lawyers will pay to take the bar association’s test. For this reason, a bar association that didn’t have a legal monopoly on certification is likely to produce a better test than one that does.”

Fixing what ails the United States includes making services and education less expensive and increasing job opportunities. The recommendations of  Somin and Winston seem like they would do both. I am persuaded that opening up the legal profession is the right thing to do, and some other non-technical professions, like teaching, should follow.

I’m just hoping I’m retired before it happens.

17 thoughts on “Ethical Jobs Plan: Let’s Put Lawyers in the 99%

  1. I’m not a lawyer, so here’s my question:

    What happens to the “rules” of being a lawyer? (i.e. retention of client files, misconduct, etc?) Would states or courts create a “black list” for proven bad individuals?

    • I second this. If you know it, you should be able to do it, but removing the knowledge test is dangerous.

      I think that Winston and Somin put too much faith in the free market system and ignore the immediate affects of implementation.

      The free market system is not good at keeping individuals from being screwed. It does a good job overall, but ignoring the plight of individuals is counter to the justice system we’ve created. Moreover, the free market takes time to correct and stabilize. Immediately after removing the entry hurdles and for an unknown period afterwards, defendents and plaintiffs WOULD be screwed.

      Okay. Let’s pretend that neither of the above is a problem. Let’s throw out the immediate after effects and end cases, and see how this word work in the best case scenario. Unfortunately, we still have the problem of rational ignorance. It doesn’t make sense for citizens in general to know legal procedures, so they don’t. The clients don’t have the knowledge that allows the free market system to work. They don’t know when their lawyer has screwed them, when they could have plea bargained to community service instead of 2 years in jail, when the lawyer fails to raise an objection. Unlike with telecoms or grocery stores, clients don’t know good service from bad service.

      • Additionally, one of the benefits would be an increase of available free-market education materials. Right now, a person can defend him/herself in court, but it’s nearly impossible to teach yourself the proper court procedures.

        • Yes, bad lawyers do exist, and bad representation does exist. You can have unethical and incompetent individuals in any market, but the bar requires the individuals to at least be somewhat competent.

          Ilya’s mistake is that he raises libertarianism as a first principle. While I agree that free markets are often best, they only work when information is strong amongst consumers or when the products can be effectively compared. That isn’t the case in the legal profession.

          • But the bar exam doesn’t ensure or certify competence at all. It measures the ability to take a Bar review course and memorize answers and questions. It can’t cover legal reasoning or diligence or research skills—it’s multiple choice test! Which is safer—a public that depends on lawyers to be expert in a field where they often are not, or a public that is forced to do some self-education and is also forced to think about the track record and credentials of the lawyers it hires?

            • False dichotomy. As you’ve said, the public is already forced to think about the track record and credentials of the lawyers it hires.

              No, the bar exam is not great, but it is better than no exam. You’ve made a case for reformation, not removal (something I support).

              As a side note, I’ve always wanted to take the bar exam, just to see how misinformed I am about the law.

  2. I think Tim’s idea has a lot of merit. Engineering used to work like that (and still does to some extent). If instead of a general bar exam, a series of exams was used to allow people to practice some law it would lower the costs of legal services. Then, vocational school programs could be tailored to specific areas. This is the approach used in healthcare. I can go to programs to become a certified medical technician, phlebotomists, EMT, home health aide, certified nurses aide, LPN etc. While and M.D. may be legally allowed to perform any of those jobs, by breaking the licensing up, it lowers the barrier to entry and lowers the costs of providing those services. Imagine if you had to hire an M.D. to do home health care!

  3. If you want to know what the effect of removing the “monopoly” on practicing law is, you need look no further than my profession: Information Technology. There is no barrier to entry and there is no legal prohibition on anyone from working in the field, despite the fact that mistakes and incompetence can and do lead to huge financial losses and real harm to people’s lives. It is, in essence, a full-fledged free-market system. There are licenses for plumbers, electricians, building contractors; but there’s no license required to work on the far more complicated machines with which you entrust your personal and financial data.

    What you have, then, is a system where there are a LOT of unqualified and under-qualified job seekers, and it becomes incumbent on the hiring manager to interview and assess the candidate him/herself.

    What if you, as a manager, don’t believe you can competently assess another person’s technical skills? A number of certifications have arisen to do ostensibly the same job that the bar exam does for the legal profession. The difference is that none of them are state-sponsored and are businesses in and of themselves. The key thing here is that the certifying authority has make sure that passing the test actually MEANS something for the certification to be of any value. To do that, they have to find the right balance of being difficult enough that achieving it is meaningful, and easy enough that it’s not so rare that no one has ever heard of it and/or too many people don’t even TRY because it’s too intimidating.

    Many are owned-and-operated by industry vendors (Microsoft, Cisco), which are known to include a lot a pro-vendor bias. A few are operated by independent entities (CIS) and rely on maintaining their reputations to stay relevant.

    And those reputations come and go. In the late 90’s, the MCSE became such a hot commodity that a whole cottage industry arose to help people prepare and even “cheat” on the exam. Microsoft’s cachet started quickly plummeting so they made numerous changes to the testing process as a result.

    And while the system has flaws, it works. Selfishly, I would LOVE for there to be one official “bar exam” for technology professionals because I’m confident I’d be able to pass it. While I have a Master’s degree in Computer Science, most of my colleagues have a Bachelor’s degree in something unrelated.

    But truth be told, it’s not my degree that makes me good at what I do–it’s my ability to think and solve complex problems. As the saying goes, “I am not a lawyer”, but I imagine that it’s pretty much the same situation for you guys too, isn’t it?

    –Dwayne

    • This doesn’t apply for a simple reason: we’re not all companies with hiring managers. An individual hiring an IT professional? That’s where you get Geek Squad – faceless help with a brand name attached, and likely never the same person twice. That won’t exactly work for the law.

  4. My maternal grandfather never went to high school or college. In the late 19th Century he apprenticed himself to a lawyer and “read the law” until he felt ready. Then passed the Wisconsin bar exam with no trouble. That’s how it was often done in those days.

    My father never graduated high school nor had a college degree — dropped out as HS soph to help support family. Later went to “business school” (typing, shorthand), became a secretary. Later got himself admitted to law school . Graduated, passed bar exam, private practice some years, eventually elected his state’s Attorney General.

    Where there’s a will, there’s a way.

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