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Deregulate the Practice of Law to Promote Justice and Create Jobs

It's time to deregulate the practice of law, write Clifford Winston and Robert W. Crandall of the Brookings Institution in The Wall Street Journal. [Ungated version here.] They note that law students commonly accumulate "as much $150,000 in law school debt" on "top of undergraduate debt," even though many "services by lawyers do not require three years of law school" to perform, since they are simple enough to be performed by a non-lawyer, or by consumers themselves with the aid of online companies like LegalZoom.com, which sells forms for simple legal documents like "wills, uncontested divorce documents, patent applications, and the like."

As they point out, "every other U.S. industry that has been deregulated, from trucking to telephones, has lowered prices for consumers without sacrificing quality. For example, most regulated airlines used to operate with large numbers of empty seats, particularly on longer flights. Once deregulation allowed Southwest Airlines, a smaller regional carrier, and other new carriers to offer service on any route, airline fares declined dramatically and the industry operated with far fewer empty seats and more employees. Deregulation of wireless, cellular telephone services and the entry of new carriers has led to the lowest wireless rates in the developed world and stimulated huge expenditures and associated employment in constructing new networks.... Allowing accounting firms, management consulting firms, insurance agencies, investment banks, and other entities to offer legal services would undoubtedly generate innovations in such services and would force existing law firms to change their way of doing business and to lower prices."

Eliminating the requirement that students attend law school to be lawyers would also force law schools to reduce exorbitant tuition (which has risen nearly 1,000 percent in inflation-adjusted terms since 1960). As Winston and Crandall note, "established law schools would face pressure to reduce tuition and shorten the time to obtain a degree, which would substantially reduce the debt incurred by those who choose to go to those schools." It would also force law schools to teach students actual legal skills and blackletter law, rather than outmoded legal theories or ideological fads (I learned almost nothing of value in my three years at Harvard Law School). A tenured law professor at a well-ranked law school says that law school is a “scam” and that his faculty colleagues include “overpaid,” “inadequate teachers,” who work just a few hours a day. Two law schools are being sued for fraudulent placement data in class-action lawsuits.

Legislatures also need to simplify court procedures that make it impossible for ordinary people to seek redress in cases that aren't big enough to afford hiring a lawyer, leaving cheated people with little redress when they are ripped off to the tune of $5,000 to $15,000. People can represent themselves in small-claims courts, which have simplified procedures, but in many states, such courts can hear only the tiniest legal claims, like those seeking less than $5,000. When Maryland's legislature passed a bill to increase the maximum amount to $5,000 from a ridiculously-low $2,500, then-Governor Parris Glendening vetoed it, citing the opposition of the state's greedy trial lawyers' association, which feared that an increase could lead to more people representing themselves in small-claims court rather than hiring a trial lawyer to bring a case in regular civil court. The trial lawyers' fear  of lost legal business was probably overstated, since if people can't sue in small claims court over a claim exceeding $2500, many people will simply forego suing, or seek less than their true damages, rather than hire a lawyer, who can charge $5,000 or more just to draft a complaint, especially in a legally or factually complicated case. (In private practice, I once billed $7,000 just to draft a complaint in a commercial landlord-tenant lawsuit.) Liberal politicians like Governor Glendening are heavily indebted to trial lawyers, who provide the lion's share of campaign contributions to Democratic politicians in many areas in the South.

Unlike small-claims courts, which operate under fairly-simple rules, the ordinary civil courts that hear larger cases have a bewildering array of court rules dealing with format and procedure that vary a great deal from state to state and often from county to county. Each federal district court and each federal circuit court has its own rules. State court rules vary widely. For example, when I used to practice in state court, I discovered that one state court may want documents to be blue-backed with 14-inch paper, while another may forbid that, or require yellow-backing with 11-inch paper, or the printing of standardized case information in a particular font size on the back of the blue-backing, and one may want documents with two holes punched in the top for filing, while another may forbid hole-punching entirely. One court may want documents in 14-point font size, while another may effectively require 12-point type size (by limiting the page length of briefs to unduly small numbers of pages like 10 or 15 pages, but allowing font size to be as small as 12-point type). Electronic filing and service rules also vary from court to court. Only a lawyer who practices in these courts will be familiar with all these minute requirements, and even they sometimes forget some of them, with ruinous consequences. For example, the Georgia Court of Appeals dismissed an appeal solely because the appellant's brief was in the wrong font size, even though the appellant had a plausible argument against the massive judgment against it in the trial court. A judge can use trivial rules violations to make life difficult for litigants who refuse to settle cases that the judge finds difficult or time-consuming to resolve on the merits, even if the litigant's refusal to settle later turns out to be well-founded (such as by rejecting the filing of the litigant's briefs, motions, and pro hac vice applications based on obscure format requirements that are often overlooked by out-of-town attorneys). I was once a federal district court clerk, and if I wanted to, I could have made many litigants lives' miserable by rejecting their papers for not complying with obscure format rules. The practical result of these rules is that a non-lawyer who is perfectly capable of arguing the merits of her case concisely and clearly (based on solid evidence) without any lawyer may nevertheless lose her case due to failure to comply with arcane or trivial requirements.

Law schools are not the only place where tuition is inflated. 100 colleges charge $50,000 or more a year, compared to just 5 in 2008-09, fueled by federal financial-aid rules that directly encourage colleges to raise tuition. The result is a 511 percent increase over the last 12 years in student-loan debt.

College tuition has gotten so high that coeds are selling sex to pay for their inflated tuitions, and a professor recently suggested that students sell their kidneys. Yet, college students are learning less and less: “Thirty-six percent” of college students learned little in four years of college, and students now spend “50% less time studying compared with students a few decades ago, the research shows.” Thirty-two percent never take “a course in a typical semester where they read more than 40 pages per week.

Simplifying court rules would be a boon to small businesses, which currently find it all-too-costly to enforce their contractual rights against big businesses and others, or to defend themselves against frivolous lawsuits brought by trial lawyers or wrongful harassment by administrative agencies. It would also reduce the legal costs of large businesses, costs that are mostly passed on to their consumers and employees in the form of higher prices and lower wages. Deregulating the legal profession would thus create jobs at a time when unemployment is high. To stimulate the economy, and make it cheaper to obtain justice, Congress should require the abolition of local federal court rules that differ from one trial court to another, and  one appeals court to another, making a uniform set of rules for each for civil trial and appeal by supplementing the existing Federal Rules of Civil Procedure and Appellate Procedure. It should also consider conditioning federal funding to states (some of which ends up funding state judiciaries or participants in the state court system like prosecutors, police departments, and state child-support agencies) on their adopting simpler court rules for their own state courts. For example, it could require each state to adopt procedural rules in civil cases that are uniform across each state, and are organized to correspond where possible with the Federal Rules of Civil Procedure.

To keep states from squelching competition in the legal market, and covertly discriminating against out-of-state litigants and lawyers, Congress could require states to allow people to practice law in any state if they have demonstrated moral fitness to practice law, and either (1) pass the state's bar exam (regardless of whether they have attended law school), or (2) pass the Multistate Bar Exam, and either (a) have graduated from law school, or (b) apprenticed at a law firm within the state. (One reason for allowing states to require attorneys to show moral fitness and pass a simple bar exam -- when many other occupations have historically not had licensing requirements -- is the fact that people who bring lawsuits can impose huge burdens and externalities on others, like making time-consuming demands for documents or discovery, forcing attendance at a deposition, and threatening people with ruinously large judgments. Lawsuits involve the threat of state action, such as having your property seized by a sheriff to pay for a court judgment against you. Requiring some type of licensing for lawyers helps weed obviously crazy, incompetent, and abusive people out of the legal profession and keeps them from wreaking havoc on the innocent. But the current requirement that lawyers attend law school is unjustified because there are far more efficient, effective, and cheaper ways to learn the law than attending law school. I learned far more in six weeks of studying for the bar exam, and two summers of working for law firms, than I did in three years at Harvard Law School.)