How to Make Legal Advice and Legal Services More Affordable Without Taxpayer Subsidies

At Truth on the Market, I discuss how to make legal advice and legal services more affordable at this link. I also discuss the extent to which the legal profession should be deregulated to reduce the cost of legal services and increase their accessibility to people of modest means, and what kinds of regulation need to remain in force to protect the public. Economist Eric Rasmusen discusses the serious First Amendment problems raised by bans on free legal advice by non-lawyers under bar rules against “unauthorized practice of law,” which restrict speech such as one inmate correctly pointing out that another inmate has received bad advice from his lawyer.  George Leef describes how the Michigan bar used bans on “unauthorized practice of law” to harass an accountant simply for helping his own daughter.

Law Professor Renee Newman Knake, an expert on legal ethics, discusses First Amendment problems with bar rules that seek to prevent corporations and others from providing low-cost legal services based on their associational characteristics. Law Professor Gillian Hadfield, who is also an economist, discusses the anti-competitive, factually-dubious way that courts have enforced and interpreted bans on unauthorized practice of law, here. George Leef, who himself has a law degree (and who studies educational institutions at the Pope Center for Higher Education Policy), notes that attending law school is “neither a necessary nor a sufficient condition for competence in the legal profession.”

Robert Crandall of the Brookings Institution notes that both lawyer pay and law student loan debt have risen rapidly under the shadow of barriers to entry into the legal profession. As he points out, “in most states, no one can sit for the bar examination without a law degree from an ABA-accredited institution,” even though “three years of law school are not necessary for lawyers handling simple divorces, real estate transfers, or traffic violations,” resulting “in rapidly-rising lawyer incomes and in a sharp increase in the cost of a law degree” due to this captive market. As he notes, “There are numerous studies of the deregulation of various sectors of the economy that began in the mid 1970s and spread to airlines, trucking, railroads, telecommunications, cable television, and oil and natural gas. Invariably, they find that freeing up entry and deregulating prices leads to greater efficiency, more rapid innovation, and lower prices without a sacrifice in service quality.” As Walter Olson notes, however, there are characteristics of the legal profession that make complete deregulation a less attractive option than in some other industries, since the cost of lawyers’ unethical behavior is borne not only by their clients but by other members of the public, like the people they sue.  Requiring ethical fitness for lawyers thus seems like a necessity.

But the requirement that would-be lawyers attend law school should be discarded, since three years of law school are neither necessary nor sufficient for someone to be a good lawyer, given the uselessness of many law school classes (and since law school exams tend to do a worse job of testing knowledge of the law than bar exams.  Law school instruction is typically much less efficient than the summer bar-exam preparation classes provided by private companies like BarBri).  Links to other perspectives on deregulating the legal profession can be found here.