Shakespeare Didn’t Really Want To Kill All The Lawyers, But We Should Deregulate Their Profession
Forbes - LAW & REGULATION 9/18/2014
One of the Bard’s often-quoted lines is Dick the Butcher’s admonition in Henry VI, Part 2, “The first thing we do, let’s kill all the lawyers.”
That idea, argues lawyer David Epstein, is mistakenly thought to mean that Shakespeare was antagonistic toward the legal profession. Instead, as we read in this Wall Street Journal piece, Shakespeare actually meant “to portray lawyers as the guardians of the rule of law who stand in the way of a fanatical mob.”
Whether you agree with Epstein’s interpretation or not, more than four centuries after Shakespeare’s time, we should do something about lawyers, something that entails no violence.
That something is to deregulate the legal profession.
To repeat a point I have made here before, most companies and professions like regulation. They seek it, happily trading off some freedom for security from the blustery winds of wide-open competition. One of the organized interest groups that has been very successful in getting government to stifle competition so it can act like a cartel is the legal profession.
It used to be egregiously cartel-like, requiring that members adhere to fee schedules, thus shutting down price competition, and forbidding lawyers from advertising. Both of those strictures, embodied in the Canons of Legal Ethics, have been wiped away, though. The Supreme Court ruled that mandatory fee schedules violated the Sherman Act in Goldfarb v. Virginia State Bar in 1975 and the prohibition against advertising was similarly struck down by the Court in Bates v. State Bar of Arizona in 1977.
Those decisions whittled away the profession’s internal rules against competition, allowing lawyers to compete with each other. Still standing, however, is the bar’s defense against external competition: the prohibition against “unauthorized practice of law.” Only individuals who hold a license to practice law in a state may do so and anyone who does not hold a license is guilty of “unauthorized practice” should he or she venture to do anything that might be considered “practice of law.”
It doesn’t matter in the least how competent the individual may be to do the task, how expertly it was done, or how satisfied the other person was with the work. Unauthorized practice is strictly forbidden. And because exactly what constitutes the “practice of law” is not precisely defined, the effect (and the purpose) is to scare those who are not members of the bar from coming anywhere near “lawyers’ turf.”
With the high licensure barrier to entry into the market for legal services (in most states, only people who have graduated from an American Bar Association accredited law school are eligible to take the bar exam), lawyers can charge more. Owing to the great cost of getting into the guild, few lawyers can even think about taking cases from poor people who can’t afford to pay substantial fees.
Among the many who have noticed that problem are Brookings Institution scholars Robert Crandall and Clifford Winston, whose 2011 book First Thing We Do, Let’s Deregulate All the Lawyers makes a strong case in favor of a laissez-faire approach to the legal profession. They write, “The reality is that many more people could offer various forms of legal services today at far lower prices if the American Bar Association did not artificially restrict the number of lawyers…Occupational licensing limits competition and raises the cost of legal services.”
The profession’s licensure system is enforced through unauthorized practice of law (UPL) prohibitions. If it weren’t for them, people could enter the market without having first spent three largely useless but extremely expensive years in law school.
It is because of those prohibitions that many Americans can’t afford an attorney. As law professor Laurel Rigertas writes in her recent Fordham Law Review article The Legal Profession’s Monopoly: Failing to Protect Consumers, “Much of the public is left wandering around the self-help section of bookstores and self-help kiosks in courthouses trying to figure out how to handle matters on their own.”
Too bad about those Americans who are priced out of the market, but the ABA insists that its restrictions are only there to protect the public against incompetence. Some people might get bad advice from inadequately trained legal practitioners, so organized bar says it has to step in and ensure competence by keeping law students in approved law schools for three years.
The problem with that rationale is that spending all that time in law school is neither a necessary nor a sufficient condition for competence in performing legal tasks. Stanford Law School professor Deborah Rhode has been attacking that notion since 1981. She and Lucy Buford Ricca (also at Stanford) write in their Fordham Law Review article Protecting the Profession or the Public: Rethinking Unauthorized-Practice Enforcement,
“In other nations that permit nonlawyers to provide legal advice and to assist with routine documents, the research available does not suggest that their performance has been inadequate. In a study comparing outcomes for low-income clients in the United Kingdom on a variety of matters such as welfare benefits, housing, and employment, nonlawyers generally outperformed lawyers in terms of concrete results and client satisfaction….In the United States, studies of lay specialists who provide legal representation in bankruptcy and administrative agency hearings find that they generally perform as well or better than attorneys. Extensive formal training is less critical than daily experience for effective advocacy.”
If the market for legal services were deregulated, practitioners would quickly figure out the optimal kind and duration of training for them to succeed in business. It isn’t the years of law school classes (almost all of which is quickly forgotten) that make one competent, but instead the need to build your reputation through good service.
In short, the licensing regulations in the legal profession don’t protect the public, but merely raise the cost of services, doing the most harm to those who can least afford to pay.
But even if we could persuade a lot of legislators that UPL is nothing but anti-competitive turf protection, we would confront the further difficulty that UPL enforcement is mostly in the domain of the judicial branch. Professor Rigertas observes in the article cited above, “With rare exceptions, legislatures cannot authorize nonlawyers to engage in acts that are considered the practice of law, so any changes to the scope of the legal profession’s monopoly must come from the state supreme courts….”
She points out a few, small steps that have been taken in that direction. The Supreme Court of Washington has, for example, decided to permit Limited License Legal Technicians to do work in the area of family law. The small steps these few courts have taken have been opposed by the organized bar. Trying to get to a deregulated profession through incremental liberalizations authorized by justices willing to joust with their compatriots in the profession would take forever. Or at least half of forever.
I don’t think that is necessary. State Supreme courts may have “inherent” control over the legal profession, but that should not mean that they get to create and enforce a new victimless crime on their own. The legislative branch shouldn’t sit around like potted plants while the judicial branch abuses citizens.
State legislators – a coalition of conservatives who believe in free markets and liberals who actually put the interests of poor people above lawyer campaign support – could pass statutes providing that no one will be fined or imprisoned for the rendering of any legal service except upon proof of fraud. Consumers who could prove they’d been defrauded by someone falsely claiming to have legal credentials could take action, but bar associations trying to stifle competition could not.
If that were the law of a state, all of which judges are sworn to uphold, we would probably never see any more cases where paralegals, secretaries, or family members are attacked merely for having trespassed on lawyers’ turf.