The Legal Profession and the Case for Fundamental Reform: Conclusions and Recommendations

The preceding series of posts based on Trouble at the Bar have discussed policy-related issues, access to justice, ideology on the Supreme Court, and the efficacy of government microeconomic policy, which are central to the legal profession. I have not noted but acknowledge here the vital contributions that the legal profession makes to protecting individuals' rights and helping people get along with each other.

Ironically, the general recommendation that emerges from my previous posts is that the legal profession should get along with more people—that is, it should make a much greater effort to work with and embrace a broader set of colleagues with backgrounds in different disciplines and levels of training. Self-imposed entry barriers have caused the legal profession to run a closed shop that has limited the contributions it could make to the nation and its working conditions. All aspects of the profession would benefit if the profession supported deregulation and removed its straitjacket to engage freely with new and eager participants.

Providers of legal services would be much more heterogeneous and include highly specialized individuals with vocational and online training, an undergraduate law degree, a law degree from an accelerated or three-year law school program, and a degree from a well-designed multidisciplinary program in law and another discipline. Society would gain because the expanded workforce would cater to a much broader range of consumers who would be able to afford some form of legal representation that is of value. In addition, law firms are likely to benefit by hiring people with less extensive and less costly education to help provide certain services at lower cost and, in some cases, by attracting more effective managers from the business world.

Industry entities would expand as corporations provide legal, financial, accounting, and other services; foreign law firms provide services relevant to legal issues in the US and other countries; and hybrid firms provide legal services, economic analysis, lobbying, and the like. Still other entities would integrate legal services with a different array of services. Society would benefit from the expanded services and more intense competition; the legal industry would benefit from the opportunity to form new relationships that generate synergistic efficiencies and new services that have yet to be imagined; and employees would benefit because the influx of new service providers would cause the industry to reevaluate working conditions and adapt them to accommodate a more heterogenous workforce.

Legal education is likely to offer a much broader range of courses and programs to educate the more heterogeneous legal services industry. More interdisciplinary academic programs means that more faculty will need to be trained in both law and another discipline. Generally, law faculty would get more experience working with people trained in different disciplines and would appropriate the strengths of those disciplines to improve legal scholarship.

These changes will combine to help the legal profession have a more constructive influence on public policy. Greater exposure to other intellectual disciplines should encourage judges and justices to be much more receptive to forming and working with panels of independent experts to help improve their decisions and to be more aware of harmful ideological and political influences. The change in the competitive and educational environment should enable the government to attract stronger lawyers who are better trained to overcome status quo bias and be more interested in obtaining credible empirical evidence to guide policy assessments and to justify policy reforms.

Of course, the benefits that I envision from a fully deregulated legal services industry composed of more heterogeneous workers and firms and responsive to more heterogeneous consumers would not come without costs. State licensing requirements and ABA accreditation policies and regulations currently substitute government and association judgments for the judgments of individuals and firms. Aspiring legal service providers would have a broader choice of education and career choices; firms would have a broader choice of services to provide and markets to serve; and consumers would have broader choices of legal service providers to hire and information sources to consult.

Mistakes will be made. Some people who could not have practiced law because they could not obtain a license will turn out to be incompetent and provide poor service; some online and vocational courses will not help people provide useful services; some corporations and foreign firms will behave unethically; many traditional law firms may fail because they are unable to adjust to the new competitive environment; and some consumers will make poor choices of legal service providers to hire. These possible outcomes are familiar to an economist because all US industries that were deregulated experienced variants of them. However, the industries, consumers, and the nation overall are better for going through the difficult process, although I recognize that is no consolation for those who were adversely affected.

Deregulation naysayers are likely to dig in and assert that the legal industry is different from all other industries. That view is incorrect to the extent that participants in all industries respond to incentives, are more efficient and innovative when they face fewer constraints and more competition, and succeed when they adapt to changing technologies and respond to shocks. However, that view is correct to the extent that all industries eventually fail when they are mired in the status quo, because the legal industry has been mired in the status quo and appears to be successful.

Trouble at the Bar concludes that the legal industry's success is illusionary and that it could be enormously successful if it were deregulated by helping the nation to achieve greater fairness and efficiency far more than the economics profession could ever hope to do. Given that a lawyer coined the phrase Trillion Dollar Economists to characterize the social value of the economics profession's ideas that have shaped the world, imagine what the social value of the legal profession's contributions could turn out to be.