There’s a new book being published by the Brookings Institution think tank that is attracting a lot of attention in the blogosphere (see here, here and here). The book, authored by Clifford Winston, Robert Crandall and Vikram Maheresi is entitled “First Thing We Do, Let’s Deregulate All The Lawyers” and its premise is simple: you shouldn’t have to go to law school, pass the bar exam or obtain a law license in order to be a lawyer. Winston, Crandall and Maheresi argue that the requirements that lawyers spend three years in law school and pass the bar exam in order to obtain a law license are merely anticompetitive measures that drive up the costs of lawyers’ services and insure that some poor people who need lawyers cannot get them.
It may make me a bit of a pariah as a lawyer, but I wholeheartedly agree.
Lawyers are rarely called upon to make a defense of the regulation of their profession, but when they do, they usually insist that the law school-and-bar exam educational complex is necessary to protect people from bad legal representation. The thinking goes that, if not for regulations mandating that lawyers attend law school and sit for a bar exam, the market would be flooded with all sorts of shysters. Regulation of lawyers is necessary to protect consumers from their own ignorance.
This is a patently bad argument. The same argument used to be trotted out by members of medieval guilds. Under the guild system, in order to sell candles you had to be a member of the chandler’s guild. In order to sell shoes, you had to be a member of the shoemaker guild, and so forth for dozens of occupations. The guilds used to insist that such restrictions on competition were necessary to insure that consumers got a product that worked. Otherwise, the thinking went, the marketplace would be flooded with candles that didn’t burn and shoddy shoes. But, eventually, these craft guilds were abolished and consumers weren’t injured. The candles continued to burn just as well and, in fact, they got cheaper. Consumers benefited.
Today of course, if I want to open a factory and manufacture candles or light bulbs, there are no regulations that I have certain training or experience. The market will sort it out.
The same result would no doubt obtain if law licensure requirements were abolished.
Yes, legal services are different from consumer goods like eyeglasses and light bulbs. A consumer who buys a pair of eyeglasses or a light bulb knows, after purchasing, if he has gotten a quality piece of merchandise. That doesn’t necessarily apply to the consumption of legal services: a lawyer knows a great deal more about the quality of his goods than the client.
But, in a de-regulated legal profession, lawyers would find a way to signal their quality. Just as Nike brand sneakers signal a particular level of quality, a Nike-branded law firm would signal a particular grade of legal representation. Moreover, third-party vendors and consumer media outlets would also provide quality assurance.
If any lawyer truly believes that the public would be harmed by incompetent legal representation in the absence of some regime of professional licensure, ask him who he thinks could do more harm to his law firm — a first-year law associate or the firm’s IT professional? The answer of course is the IT guy: with a few keystrokes, he could delete the firm’s entire file system. A first-year lawyer at the firm could never do so much damage. And the firm’s IT guy does not need to possess any credentials to hold himself out as an “IT guy.” Nevertheless, I have yet to hear of a law firm imploding due to incompetent IT personnel.
The fallback argument for many defenders of legal regulation is not that people need protection from low quality lawyers but that our system of justice requires men and women of high character to be lawyers. Any knave can be a fishmonger, the thinking goes, but lawyers occupy a position of special public trust. We at least need some barriers to entry to insure the practice of law does not devolve into a free-for-all with lawyers of bad character suborning perjury, comingling client funds with their own, and engaging in all manner of other malfeasance.
Of course, politicians occupy positions of public trust equal to or greater than the special position occupied by the average lawyers. And we don’t require politicians to pass some test before they assume office. Instead we have ethical rules that apply to their conduct once they assume office. And the same sort of regime could preserve the public trust placed in lawyers: you don’t have to pass a bar exam or a character and fitness test to get in, but once you’re in, you better play by the rules or you’ll face expulsion.
Whether lawyers like it or not, sooner or later the legal profession is going to have its entry requirements abolished. Top lawyers are now seeing their hourly rates climb to $1,000 an hour. The legal fees in the GM bankruptcy might top $1 billion. That’s real money, even at the Fortune 500 level. And when corporations feel oppressed by legal fees, they will lobby for stripping away the anticompetitive restrictions that drive up their legal bills. For lawyers contemplating what a deregulated profession will look like, it’s not a question of if, but when.

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