Brookings Institution scholar Clifford Winston recently published a good column advocating the abolition of legal requirements mandating that all lawyers must graduate from law schools and pass bar exams:
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….
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.
Of course, lower legal prices would cause new law school graduates to be paid less, but more jobs would be available for such graduates because the demand for lawyers would increase. And new graduates would begin their careers with less law-school debt, because alternative providers of legal education would force law schools to reduce tuition.
See also his recent coauthored book on this subject.
To be clear, neither Winston nor I are suggesting that either law schools or bar exams should made illegal. We merely advocate eliminating the laws forbidding people to practice law without having these two credentials. Consumers, however, might still prefer lawyers who have gone to law school and/or passed a bar exam to those who have not. Moreover, with their legal monopoly gone, law schools will have incentives to provide better legal education and bar associations will have stronger incentives to design tests that really do correlate well with future performance as a lawyer. Voluntary certification has many advantages over the present bar exam system, some of which I covered here:
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.
Finally, with multiple certification systems, we would no longer have to have a “one size fits all” system that sets standards for all lawyers and all clients. It could well be that Certification A better meets the needs of some clients, while others have reason to prefer B, and still others need no certification system at all.
Market competition and voluntary certification might not be able to eliminate all need for regulation of lawyer quality. For example, there is the issue of what to do in situations where clients have no real choice, as in the case of court-appointed lawyers for indigent criminal defendants. However, it does obviate the need for crude licensing regimes such as the bar exam that completely block access to the profession to anyone who doesn’t pass.