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January 3, 2013

How Law Schools Evade Market Competition

Almost every day you'll find new evidence that the United States has vastly oversold higher education. The evidence du jour is in the Wall Street Journal of January 3, a piece by a young lawyer named Chris Fletcher. In it, Fletcher points out that, according to an estimate by the Bureau of Labor Statistics, the country creates 21,800 new jobs for lawyers per year.

The trouble is that American law schools are graduating more than 44,000 students every year. Inevitably, large numbers of those fresh, new JD holders are going to have to hunt for work in other fields after having devoted three years of their lives to getting through law school and having spent something on the order of $150,000 in the process.

Mr. Fletcher is to be commended for issuing his caveat emptor warning, but unfortunately he does not seem to comprehend the essence of the problem: that legal education has been taken out of free market competition. In almost every state, those who want to take the bar exam and become licensed to practice law must first graduate from a law school accredited by the American Bar Association. As Lawrence Velvel, dean of the Massachusetts School of Law noted in a recent essay here, the ABA insists on keeping costs needlessly high.

Law schools have been cartelized. They are protected by law against innovative competition from without and outbreaks of competition within their ranks.

Earning the necessary degree requires three years, but much of that time is wasted in studying topics that students will never use and promptly forget. What law school does teach that's essential (how to do legal research and writing, and few courses that are fundamental such as contracts and civil procedure) could be covered in a year. Nor is there any reason why those essentials have to be taught in a law school. Books and websites could convey the information just as well.

The plain truth, as many lawyers will tell you (Harvard Law graduate Hans Bader, for instance), is that law school is mostly a drawn-out prelude to the real learning they need, which occurs on the job.

Fletcher laments that the high cost of law school keeps many from providing services to the great number of Americans who cannot afford to pay the fees that are necessary if a lawyer is to be able to cover the highly inflated cost of his education. Sadly, he doesn't argue that the solution is to deregulate legal education so that individuals who want to help the indigent aren't forced into high debts before they can ever talk to a prospective client.

Leftists are drawn to the idea of selective loan forgiveness programs to help those who want to go into "public interest" law. That is a messy solution (exactly how do we distinguish between "public interest" and the rest of the legal profession?) that is at best a slight palliative.  The solution that cuts the Gordian Knot is allow anyone who thinks he knows enough to pass the bar exam to try, whether he has a JD or studied in other ways.

If we made that change, law schools would suddenly have to compete, just as airlines and interstate trucking companies had to compete after they were deregulated. That would mean the end of a cushy life for quite a few law professors, but everyone else would be better off.

Comments (4)

30yearProf:

When my law school opened in the late 20th Century, we had a vision of providing quality legal education to young men and woman who would be glad to work in smaller firms providing legal services to under served middle-class families.

THAT did not fit the ABA's image of a REAL law school and the cost of accreditation was loss of that vision. We now produce graduates who serve the rich and the business community in the Metro area (with exceptions, of course).

Middle-class families are still hopelessly under served. We don't dare try to break the cartel's mold.

George Leef:

In response to 30yearProf, over the years there have been a number of efforts at making legal services available to poorer people, but state bar association unauthorized practice committees have always targeted them and put them out of business. Typically, a legal secretary starts a small business offering to do the sort of legal work she knows how to do (and her lawyer boss bills out at his rate) for consumers. She succeeds well enough for the state bar to sense a threat to its monopoly, so it crushes her.

In my view, unauthorized practice prohibitions do vastly more harm than good. If we want to make legal services available to poorer people, the best way to do so is to pull the fangs from UPL prohibitions. We could do that either by simply repealing them or making them enforceable only by aggrieved individuals, not by the cartel-enforcers in the state bar.

Actuaries require at least as much training as lawyers. Obtaining credentials requires the passing of a series of about nine tests (it varies with specialty and country) that usually take at least five years during most of which time the person is already working and learning practical skills. The vast majority of studying for those examinations is self-directed, guided by a comprehensive syllabus. There are review classes that offer a few days of directed study prior to the examination but mostly, one must be self-motivated to pass.

There is no requirement that one have a particular type of undergraduate degree but there are some basic mathematics and economics requirements. Law school is a scam perpetrated by attorneys who are either too lazy or stupid to succeed in the free market.

There are laws that criminalize the practice of law by non-lawyers but there are no such laws for actuaries. Yet there are many people who have worked in certain areas of the law who are far more knowledgeable than many if not most lawyers. It seems that these areas of law do not require lawyers so they need laws to protect them from competition. Conversely, actuaries need no such protection or licensing and, in fact, there is a small but healthy population of individuals who do actuarial types of work quite competently without having become credentialed.

The practice of law should be the same. Anyone should be able to practice law who wishes to do so, with or without having gone to law school or having passed a bar exam. Those who wish to take the bar exam should not be forced to go to law school and pay ridiculous amounts of money for the "privilege" of taking the bar exam.

I have met and worked with many extremely smart and competent attorneys and have found the experience intellectually and professionally stimulating and valuable. At the same time, I have dealt with absolute morons who chase ambulances and pursue easy money with employment practices law suits against volunteer charitable organizations, California Proposition 65, frivolous ADA and "discrimination" lawsuits, etc. It is apparently not all that difficult to pass the bar exam because there are many marginally literate attorneys. The special privileges bestowed upon the legal profession (by Congress, state legislators, but mostly by themselves) need to be abolished. Anyone who can pass the exam should be credentialed. No one should be licensed.

abc:

Law schools produce too many graduates, therefore we need more of them? More of them could drive the price down, but I do not see how it would lower the number of graduates.

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