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.
“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.