Readers of this blog know that there is an ongoing controversy over the American Bar Association accreditation standards for law schools, and co-blogger David Bernstein, among others, have pointed out numerous flaws in the ABA's approach.
To my mind, the problem goes beyond the shortcomings of specific ABA standards. The real mistake is allowing an organization with a blatant conflict of interest to take over the accreditation role in the first place. As an interest group representing lawyers, the ABA has an obvious stake in limiting entry into the profession so as to decrease the competition faced by its members. One way of doing so is by restricting the number of accredited law schools, at least in the vast majority of states that require all or most aspiring lawyers to attend an ABA-accredited school in order to take the bar exam. We would not allow an organization run by Chrysler, GM, and Ford to set regulatory standards determining who has the right to sell cars in the United States. Requiring ABA accreditation for law schools is the exact equivalent in our industry.
Nor is the point purely theoretical. As soon-to-be guest blogger Andrew Morriss explains in this paper (pp. 4-9), ABA accreditation of law schools emerged in the early twentieth century as a way of eliminating competition from independent law schools and apprenticeship systems. Many if not most ABA accreditation requirements since that time have similar causes.
If viewed as mechanisms for maintaining a cartel system rather than as efforts to advance the public interest, the ABA's most controversial accreditation policies suddenly start to make sense. For example, the ABA's support for methods of affirmative action that admit students most of whom are likely to either drop out of law school or fail the bar obviously serves the economic interests of already practicing lawyers. After all, had those same admissions slots gone to people who are likely to graduate and pass the bar, there would be more competition in the profession. Like David Bernstein, I am not categorically opposed to all forms of affirmative action. But it is striking that the ABA has chosen the form most likely to advance the interests of its members and least likely to actually help minority students (not to mention minority consumers of legal services).
Similarly, the requirement that schools have a variety of expensive, but redundant library resources and other programs that most students do not need (discussed in Prof. Morriss' article linked above) greatly increases the cost of establishing a new law school and thereby further reduces competition.
To be completely clear, I am NOT arguing that the ABA should be prevented from certifying schools as meeting what it considers to be appropriate standards. I am merely suggesting that ABA accreditation should not be required by law as a prerequisite for allowing a school's graduates to take the bar. If ABA accreditation really is a sign of school quality, then applicants can take that into account in making their decisions on what school to attend, just as they currently consider US News rankings and other data. If some form of legally mandated accreditation is needed (and I highly doubt that it is), the system should be run by an independent agency insulated as much as possible from control by the ABA and other interest groups representing practicing lawyers. There should be similar insulation, by the way, from influence by established law schools, since we too have an obvious self-interest in limiting competition by preventing new entry into the legal education market.
The ABA's own survey data show that the public has far less confidence in lawyers than members of most other professions. Personally, I do not believe that lawyers are, on average, less trustworthy than other professionals (then again, I'm a lawyer!). But we certainly are NOT trustworthy enough to be allowed to run a government-supported cartel under which we can prevent would-be competitors from joining the industry.
Those state governments that require ABA accreditation of law schools have in effect appointed a committee of foxes to control access to their chicken coops. We should not be surprised if the foxes have taken the opportunity to gobble up some of the chickens. The really surprising thing is that so many people seem to accept the foxes' self-serving rhetoric that they are doing it for the benefit of chicken farmers.
UPDATE: I am not saying that ABA officials are consciously lying when they claim that their accreditation standards are meant to serve the public interest. Many probably believe their own rhetoric. However, this provides little comfort, since people have a great capacity to believe that whatever benefits them is also good for the general public. Every interest group has its version of "What's good for GM is good for America," and the ABA is no exception.
Related Posts (on one page):
- More Evidence of ABA Lies re Accreditation and "Diversity":
- Getting the ABA Out of the Law School Accreditation Business:
- ABA Denies Provisional Accreditation, in Part Because of "Diversity" Concerns:
- Peter Kirsanow on the ABA's "Diversity" Standard for Law Schools:
That the lawyers that laymen believe are the best can get all the work they can handle at astronomical hourly rates is irrelevant. That just indicates how much some people will pay to get the best lawyer. The supply of the "best" is always limited, since if the number meeting any standard increases, then you have to be better than that to be "best". Unless the LSAT and other admission criteria are totally irrelevant to actual legal ability, those white men that might be blocked from going to law school by diversity quotas, etc., are not the ones with the ability to make it into the top ranks of practicing lawyers.
These increased revenues are that costs are paid by lawyer clients (through increased fees required to pay for inefficient education costs) and absorbed by failed lawyers (or folks who pay for their attempts).
It is also somewhat disengenuous to show concern for minorities who will not pass the bar after being admitted as "diversity" candidates without also at least acknowledging the abysmal bar-passage rate for non-accredited law schools.
A quick Google search gives me California bar passage rate data for 2001:
ABA Accredited: 78.6%
State Bar Accredited/ Non-ABA Accredited: 33.3%
Non-Accredited: 14.3%
Why concern for the black student kept out of Charleston Law School, but none for each and every student at the unaccredited "University of Northern California Lorenzo Patiño School of Law," who all have less than a 1 in 7 chance of passing the bar?
The ABA has been given the power by a number of states to decide which law schools' graduates can take the bar exam. Given that power, the ABA uses it to push its own social agenda separate and apart from determining whether a law school adequately prepares students for the practice of law or to succeed on the bar exam. The fact that the ABA's accreditation policies might reduce the percentage of students at accredited schools who will ultimately pass a state bar is just an unintended effect of the ABA's thirst to impose its own social values on others, just because it can.
I see the ABA as misguided social engineers who have been given a hammer to use against law school, and not as cartelists to any real degree (at least when it comes to diversity standards).
What I see in this &DB's post is a couple of conservative political theories (free markets, nondiscrimination) looking for a corresponding fact-pattern ... in vain.
i dont buy it. chrysler, gm, and ford have significant market share and would be in a position to directly benefit from measures that would block competition. there is no clear analogy from that to the people designing aba accreditation standards (who are probably sacrificing income by spending time working on that kind of thing rather than practicing law). nor is the aba a for-profit corporation.
i think there is an analogy here, but it is nothing remotely like an "exact equivalent". the causal mechanism must be highly indirect.
"One wonders if any of the "cartel" theorists have looked to see in California has lower attorney wages or other differing characteristics than other states. My guess in no."
Of course California has lower wages for lawyers than other states that do not allow students from non accredited law schools to sit for the bar exam - ALL ELSE EQUAL. Ever heard of the laws of supply and demand?
Here's a very good paper on the subject of regulatory capture by the ABA: http://www.econ.upf.es/~pagliero/inf6.pdf
And this ethical duty included, the destruction of the major industries that do great good to society with junk science, the transfer of billions to law politicall connected law firms, a failure to police itself, a commitment to barrotry to achieve political goals not achievable through democracy, an ends justifies the means commitment (which curiously enriches the high-minded professionals) to unconstitutional champerty, a vast increase in the cost of medicine, ...
And as to 'large numbers unable to make it as lawyers", many go to law school just so they can make sure they do not fall into the tentacles of the law while pursuing other careers.
And to the numerate and scientifically trained, it is just conceivable that there might be what is known delicately as "sampling error" when it is claimed that if most states require it - it must be good. The problem is, most legilstors are members of the cartel...
If you're lawyers or are considering becoming lawyer and you take lawyers' ethical duties so lightly in real life, please do the world a favor and change career plans.
Taeyoung - Public opinion isn't an accurate reflection of the practice of law. Frankly, I don't care what "they" think.
Toby - Clients decide what cases to press, lawyers have a duty to zealously represent them. Usually, one side is zealously representing a mistaken or lying client.
Certainly, but if you will look at my post above (14.3% pass rate for student in unaccredited schools) you will see that allowing unaccredited law school students to take the bar does not significantly change the supply.
Further, considering that the legal market is not like the medical market (i.e., employers do not hire even some graduates of lower tier accredited schools), there is likely not much of a demand for these graduates either.
Not much demand for these graduates? The unemployment rate for lawyers is in the 1% range - around 20% of the national average. This certainly leaves room for the possibility that there is an suboptimal supply of lawyers in this country. The fact that new law schools keep popping up indicates that many parties feel there would be demand for more lawyers.
Furthermore, more lawyers means lower wages. Presumably an increase in lawyers will create markets for legal services that do not exist today - precisely because wages are higher than their equilibrum level.
If there's no demand for these graduates and the market is in equilibrium as you are implictly suggesting, why object to increased accreditation? If you're right, these people will simply fail to get jobs and eventually these schools will go out of business.
That might be the case, but art school is a great counterexample -- it may be different now, but I recall maybe 5 or 6 years ago hearing that every year, American art schools graduate enough students to replenish the entire art industry all over. There's a massive oversupply of artists.
The existence of so many art schools meets a demand for art schools. The demand for art schools is driven in large part by their students' desire to work as an artist in the future, by a demand for art-related jobs. That doesn't necessarily mean that there's going to be such jobs in the future, that there's a demand for art-related services. Only that aspirationally, a lot of people would like to be able to work as an artist. I would too, for example. Only I know perfectly well that an art-related job would be a long-shot for me.
I think it's the same way with law, and only enhanced by the (incorrect) public perception that all lawyers draw six-figure salaries from the moment they enter private practice.
Point taken. But unless you're arguing that newly-established law schools are catering only or primarily to people who want to go to law school but do not intend to practice law, that's a tough sell.
And just like the demand for individuals with artistic skills expands as wages decrease, we can expect the same for lawyers.
Bottom line -- The law of demand is pretty damn robust. A state's nsistence on ABA accreditation is a transfer of $$ from consumers to lawyers. It's true in theory and it's true in practice (see http://www.econ.upf.es/~pagliero/inf6.pdf)
I am primarily assuming that those 14% chose an unaccredited law school because they could, and that otherwise they would have gone to an accredited law school, and that supply is hardly changing at all.
It is fine to state that, as an abstract principle, supply and demand will lead to declining wages. I am talking about reality, which cannot be proven by refence to an economic text. For example, large law firms with office in New York and Los Angeles generally pay their starting associates the same salary in each. For example, a NYC Assistant D.A. starts at $46,000, while an LA Assistant D.A. starts at $54,000.
Those are merely anecdotes, not statistical data. However, they do not show that California's attorney wages are held down by the "cartelization" of the industry. I was merely asking whether anyone has looked at this formally, rather than merely making an assumption based on the "law of supply and demand".
The bar failure rate for graduates of non-accredited schools is impressive, and we might also note that the profession seems to have a fairly hgh dropout rate, and that salaries for the marginal graduate are quite low. Those are not the earmarks of a cartel.
Ha ha ha. There's someone who doesn't know how laws get written in Washington.
That's a rather odd assumption to rest your entire argument on.
The laws of supply and demand are not an abstract principle. It's a theoretical construct that, subject to one or two well-documented exceptions ALWAYS holds true.
With regard to your "big firms in NY and LA pay the same wage" example --
The hiring market that large firms are looking at does not generally include those people who would have become lawyers but for the fact that they could not gain admission to ABA accredited law schools/pass the bar. There's no strong reaosn to expect that removing the ABA's stranglehold on the labor market would have much of an impact on the top 5-10% of the wage distribution.
With regard to your "DAs make different wages in LA vs. NY" argument --
You point out yourself that this is anecdotal. In addition, it's a government job and, as such, it's not necessarily a market wage. Before we make comparisons, let's attempt to control for confounding variables.
And yes -- regulatory capture by the ABA has been examined previously. Most recently: http://www.econ.upf.es/~pagliero/inf6.pdf. The paper finds a pattern of practices consistent with regulatory capture (e.g. bar eam passing scores are raised during recessions, etc.)
Search for facts no more: http://www.econ.upf.es/~pagliero/inf6.pdf
Finally, for law firms, apprenticeship would solve a lot of their current recruiting problems. Law firm associates at medium- and large-sized firms tend to turn over very quickly, like 20% or more per year (a lot more in certain practice areas). If a law firm could hire someone as a paralegal and then after 3-5 years convert them into a lawyer instantly just by having them pass the bar exam (or even an enhanced bar exam), the total cost of recruiting and retaining a new lawyer would go down a lot. Everyone would win, except for the law school profs.
Doubling or tripling the number of doctors would help the health insurance problem, and cut down the $200 for 10 minutes consultation fees of doctors.
So, assuming that California is a reasonable proxy for what would happen without required ABA accreditation, the number of students from unaccredited schools who passed the exam and therefore would have been excluded from practice in another state where they would have been required to attend an ABA accredited school, was 11 out of 4072 total persons who passed the exam, or 0.27%. Less than 3 tenths of one percent, in any single year. Compared to the total number of bar members in California (206,568, according to www.calbar.ca.gov), that would represent a 0.0053 % reduction in the available lawyers each year. I think that is quite reasonably an insignificant effect on the supply of lawyers.
I did mention the the fact that already accredited law schools have an interest in limiting new entry, just like the ABA does. That should be clear enough.
These figures are not a good guide to what would happen if all states permitted unaccredited law schools. California has one of the most difficult and grueling bar exams in the country, so the bar passage rate there is is likely to be much lower than elsewhere. Also, more and better applicants would be willing to attend unaccredited schools if they could lead to bar memberships in more than 1 state and especially in states where passing the bar is less difficut.
As a matter of basic economic theory, such arguments do not work. A cartel exists if competitors in the market can restrict entry, thereby enabling themselves to earn monopoly or oligopoly profits. Even a highly successful monopolist might still earn only a modest profit. But that profit could still be much higher than under competitive conditions. For example, the existence of a monopoly in garbage collection (present in many cities) would not be disproven by evidence showing that the garbage collectors have salaries much lower than those of workers in many other industries.
Finally, nothing in the nature of cartels prevents workers in a cartelized industry from leaving because they are bored, stressed out, or otherwise find their chosen career unpleasant. Being part of a successful cartel doesn't guarantee that your work will be relaxing and fun.
to an ABA-approved school, but I have an uncomfortable feeling that the
prosperity I am promised is not something on which I can base my
hopes for the future.
No market in history has seen a net benefit from
unnatural monopolies like that created by the ABA-accreditation/Bar
exam scheme. The profits reaped in a constrained market are
self-defeating, because the lack of competition breeds complacency;
cartelized markets only survive as long as the cartel survives. As the
quality of services drop, the demand for alternatives increases, hence
the Divorce Store, et al.
Cartelized markets are a lot like balloons; consumer dissatisfaction
is like a needle.
I will also add that the fact that bar passage is required AT ALL to enter the legal practice is an even greater excersise of market power than restricting the number of law schools.
I agree. Perhaps at some point I will do a post on why bar exams should be abolished, but in this one I decided to stick to the topic du jour of the ABA accreditation system.
The real mistake is allowing an organization with a blatant conflict of interest to take over the accreditation role in the first place. As an interest group representing lawyers, the ABA has an obvious stake in limiting entry into the profession so as to decrease the competition faced by its members.
Oh come on, "blatant" conflict of interest? This doesn't hold up to even casual scrutiny. First of all, the ABA isn't run by recent law school grads, it's run largely by people who are partners in law firms or hold significant legal positions in government. New graduates aren't competition for them, they're potential hirees. To the extent that these people would regard other individual lawyers as competition, it would be other experienced lawyers who have graduated long ago, such that changing admission standards now will have no effect on them.
Furthermore, it's not even obvious that all lawyers have an interest in limiting the number of people admitted to the profession. As a litigation lawyer, more lawyers coming into the profession might just as well mean more lawsuits against your client rather than more competition to represent your client and that means more business, not less.
And how is it, despite the ABA's supposed control over the size of the profession, have we ended up with the most litigious society in the world, if not all of history, and an absurd number of lawyers?
If you want to argue that some connection between ABA accreditation and the numbers of new lawyers coming on stream every year, then by all means look at the evidence and do some analysis, but just a bare assertion of a "blatant" conflict of interest isn't going to cut it.
One way of doing so is by restricting the number of accredited law schools, at least in the vast majority of states that require all or most aspiring lawyers to attend an ABA-accredited school in order to take the bar exam.
Note that "vast majority of states" doesn't include California. California doesn't require you to go to an ABA law school to take the bar exam, and California accounts for a huge percentage of all the lawyers in the US. The fact that Nebraska, Wyoming, New Hampshire and a bunch of other thinly populated states might require an ABA degree really doesn't present an accurate picture of the issue.
Does the ABA restrict the number of law schools it will accredit, or merely set out the criteria which must be met? If it's the former (as I believe it is), then this no more restricts the number of law schools it will accredit then a requirement for a road test before you get a driver's license restricts the number of people who can drive.
We would not allow an organization run by Chrysler, GM, and Ford to set regulatory standards determining who has the right to sell cars in the United States. Requiring ABA accreditation for law schools is the exact equivalent in our industry.
Hardly an "exact" equivalent. The ABA sets standards for whether a law school should be regarded as accredited, and each individual state makes us of that information as it wishes, without any obligation to do so. Chrysler, GM and Ford are free to get together and express an opinion about what sort of criteria a car ought to meet in order to be sold in the US, and individual states would be free to use or not use that opinion as they wish.
Furthermore, the ABA isn't "determining who has the right to sells cars." In other words, they're not determining who has the right to practice law or not, they're determining who can run a law school that may describe itself as ABA accredited. Nothing about those accreditation standards can stop me or any other law student from graduating from law school or practicing law.
If viewed as mechanisms for maintaining a cartel system rather than as efforts to advance the public interest, the ABA's most controversial accreditation policies suddenly start to make sense. For example, the ABA's support for methods of affirmative action that admit students most of whom are likely to either drop out of law school or fail the bar obviously serves the economic interests of already practicing lawyers. After all, had those same admissions slots gone to people who are likely to graduate and pass the bar, there would be more competition in the profession.
The white guy who doesn't get into Columbia because of affirmative action is not going to give up and become an accountant, he's going to go to Georgetown instead. Does anyone really think the ABA is going to bat for affirmative action, despite all those equal protection hurdles and general hostility from conservatives because of its possible, tenuous connection to the overall size of the profession? I mean really, can't they come up with something simpler and more direct?
But it is striking that the ABA has chosen the form most likely to advance the interests of its members and least likely to actually help minority students (not to mention minority consumers of legal services).
It is striking that opponents of affirmative action in law school admission profess so much concern for the harm done to minorities admitted to top 14 schools and so little concern for where the real harm happens, namely at the bottom tier law schools that will take any person (including lots of minorities) foolish enough to write them a non-refundable tuition check, including many who have no realistic prospect of ever practicing law.
So come on, if you want to imply that the ABA's stance on affirmative action is not some sincere but misguided attempt to benefit minorities, but is really some insidious campaign to keep them out of the legal profession then you must be prepared for the fact that everyone gets to play the "real motive" game.
The ABA's own survey data show that the public has far less confidence in lawyers than members of most other professions.
And this results from ABA requirements that law schools have facilities and staff? Public confidence in lawyers would go up if any random person could call himself a lawyer after 6 weeks of Bar/Bri and a pass on the bar exam? Is public confidence in lawyers in California (which does not require ABA attendance) so much higher than in states that do have that requirement?
Similarly, the requirement that schools have a variety of expensive, but redundant library resources and other programs that most students do not need (discussed in Prof. Morriss' article linked above) greatly increases the cost of establishing a new law school and thereby further reduces competition.
Reduces competition for providing legal education perhaps, but that's an entirely different business than the practice of law. Is there any indicated that there's a shortage of capacity in the legal education system we have now?
Those state governments that require ABA accreditation of law schools have in effect appointed a committee of foxes to control access to their chicken coops. We should not be surprised if the foxes have taken the opportunity to gobble up some of the chickens. The really surprising thing is that so many people seem to accept the foxes' self-serving rhetoric that they are doing it for the benefit of chicken farmers.
Speaking of rhetoric, where's the evidence that California is some kind of paradise for the provision of legal services compare to states that require an ABA degree to take their bar exam.
Every interest group has its version of "What's good for GM is good for America," and the ABA is no exception.
Some states require an ABA degree to be eligible for their bar exam. I'm guessing the reason for that is that ABA accredition is simple and easy for a state to use - the state doesn't have to spend a dime on setting up and enforcing their own accreditation system. No state is going to going with some libertarian ideal of letting anyone take the bar exam, and few states want to spend the money to set up their own accreditation system. It seems to me, therefore, that the market has spoken, and those who don't like the result are free to set up a competing accreditation system and try to persuade states to go with it instead of ABA accreditation.
As a matter of basic economic theory, since we're giving lectures on the subject, it's not the garbage collectors who have the monopoly - they operate in a competitive labor market - but the company.
Finally, nothing in the nature of cartels prevents workers in a cartelized industry from leaving because they are bored, stressed out, or otherwise find their chosen career unpleasant. Being part of a successful cartel doesn't guarantee that your work will be relaxing and fun.
No, but cartels provide above-competitive income to their members, which in some cases will mitigate the effects of boredom, stress, etc.
many lawyers leave the industry and not all earn very high salaries.
These are exactly the cases we should look to. The fact that some lawyers have very high incomes tells us nothing, as a matter of basic economic theory, about whether the profession is a cartel. It's the marginal lawyer who matters. What do you think the low-end incomes would be in a competitive market?
So who are the members of this cartel and what's your evidence of any agreement between them. Simply asserting that all members of an industry have an incentive to act in a particular fashion doesn't get you a cartel.
For example, the existence of a monopoly in garbage collection (present in many cities) would not be disproven by evidence showing that the garbage collectors have salaries much lower than those of workers in many other industries.
"Monopoly" and "cartel" are not synonyms. Which is it?
Even your example here shows a fundamental misunderstanding of the process. Passing bar scores are selected by the states, not the ABA, and currently differ in nearly every state.
While this could show anticompetitive behavior, it would not be by the ABA.
I believe California's low bar passage rate compared to other states is based nearly entirely on unaccredited students taking the bar. Among ABA-accredited students, passage rates are comparable to New York or Pennsylvania or other states with "hard" tests.
But the point being made was not the low passage rate, but rather the low passage rate of unaccredited schools versus accredited schools. The bar passage rate is very low in California for grads of unaccredited schools and pretty high for grads of accredited schools.
Also, more and better applicants would be willing to attend unaccredited schools if they could lead to bar memberships in more than 1 state and especially in states where passing the bar is less difficut.
Any evidence that this effect would be more than negligible? As it is, it's nearly impossible to get a job out of state even from a rock bottom accredited school, let alone an accredited one. Anyone doing more than a modicum of research about which law school to attend will discover this, and presumably prefer a school in the state in which he intends to work.