Let's Deregulate all the Lawyers
By David Henderson
The authors carefully build their case, first telling of the various restrictions on who can be a lawyer. All but a few state governments, they note, require prospective lawyers to have graduated from a law school that the American Bar Association has accredited. One notable exception is California, where one can become a lawyer simply by passing the bar exam and a competency exam. Every state government but Wisconsin’s requires all would-be lawyers to pass a bar exam. The Wisconsin government makes exception only for graduates of the University of Wisconsin Law School! This would make sense, from the viewpoint of quality assurance, only if the University of Wisconsin Law School graduates are, on average, better than those of any other law school, including Stanford, Harvard, Chicago, and Yale.
This is from “Let My Lawyers Go,” in Regulation, Winter 2011-2012. It’s my review [scroll down to page 42] of First Thing We Do, Let’s Deregulate All the Lawyers, a recent book by Clifford Winston and Robert W. Crandall of the Brookings Institution and Vikram Maheshri of the University of Houston.
Some other highlights from my Regulation review:
Why do the authors think regulation is not about assuring quality? One reason is that the American Bar Association, which accredits law schools–essentially a fox in charge of the hen house–has not even considered accrediting foreign law schools or online law schools. If the ABA’s true motive were to assure quality, it would seriously consider accrediting such schools. Another reason, they write, is that “the ABA has refused to provide further information about a law school’s quality beyond its accreditation status and has continually issued disclaimers of any law school rating system.”
The authors also point to a subtle benefit of deregulation: it would break down solidarity in the legal lobby, thus undercutting the push for more government regulation of the legal profession. [DRH note: Drop the last four words of the previous sentence. The editor added them and I missed that when I read the page proofs.] They don’t make this argument totally clear, but it seems to be an application of the late Mancur Olson’s theory of collective action. The big problem with collective action, noted Olson, is the free-rider problem: those who don’t pay for the benefits of lobbying still get the benefits. The free-rider problem, therefore, leads to less lobbying than otherwise. The American Bar Association and the American Association of Justice (formerly the American Trial Lawyers Association), which both lobby for regulations and legislation that benefit lawyers, would have a bigger free-rider problem if there were more lawyers and fewer restrictions on who could become a lawyer. I find this argument persuasive, but it would have been helpful if the authors had elaborated on it somewhat.
The authors also estimate the gain in incomes to lawyers due to the restriction of competition. It’s huge.
UPDATE: My Econlib colleague, Russ Roberts, interviewed Cliff Winston, one of the authors, on Econtalk. It’s here.