Should We Deregulate the Legal Industry?

[InterAlia1961]

Clifford Winston and Robert W. Crandall have an op-ed in The Wall Street Journal today arguing that ending much of the current government regulation in the practice of law would lead to lower prices for legal services and more jobs for people who wish to go into the legal profession. Read the rest here>>>>>http://www.fedsocblog.com/blog/should_we_deregulate_the_legal_industry/

[FalconJimmy]

Clifford Winston and Robert W. Crandall have an op-ed in The Wall Street Journal today arguing that ending much of the current government regulation in the practice of law would lead to lower prices for legal services and more jobs for people who wish to go into the legal profession. Read the rest here>>>>>http://www.fedsocblog.com/blog/should_we_deregulate_the_legal_industry/

One thing to consider:  lowering prices in the law will not only spell catastrophe for hourly rates (and thus, attorneys' livelihoods), but also lower the cost of litigation.

You don't sue your neighbor for letting his dog **** in your yard if an attorney tells you that he wants an $8,000 retainer.

However, if prices plummet and there's a slew of $30 an hour attorneys out there, a particularly spiteful plaintiff might be willing to drag somebody into court if they can do it for two grand.

Anything that lowers the cost of attorneys (including increasing the supply of attorneys) will make the rate of litigation increase.  Simple economics.

[InterAlia1961]

You make a strong argument. It's hard to disagree with such a presumptive disposition of supply-side economics, but disagree I must. If we look at the pharmaceutical industry's model, we can understand how the authors came to their sound conclusions. There was a time when consumers needed a prescription for something as simple as allergy medication. Not because the product was dangerous or hard to use, but because some government regulator in some government agency decided that the general public could not understand the warnings. Case in point: Allegra. I take this every day. Up until two-months ago, it cost me $39.95 and was available only by prescription, which meant a trip to the doctor's office once a year to get a prescription refilled. The cost for an office visit is $115.00. Now, Allegra is available in full-prescription strength over the counter. I just bought some today. It cost me $25.95. The savings are significant. The price went down, as you rightly noted, because the supply went up.  Applied to the legal industry, the pharmaceutical model would have necessarily have the same effect.

As for lawsuit abuse, the answer is simple: loser pays. Tort reform should be part of any regulation discussion.

[lawyerintraining]

You make a strong argument. It's hard to disagree with such a presumptive disposition of supply-side economics, but disagree I must. If we look at the pharmaceutical industry's model, we can understand how the authors came to their sound conclusions. There was a time when consumers needed a prescription for something as simple as allergy medication. Not because the product was dangerous or hard to use, but because some government regulator in some government agency decided that the general public could not understand the warnings. Case in point: Allegra. I take this every day. Up until two-months ago, it cost me $39.95 and was available only by prescription, which meant a trip to the doctor's office once a year to get a prescription refilled. The cost for an office visit is $115.00. Now, Allegra is available in full-prescription strength over the counter. I just bought some today. It cost me $25.95. The savings are significant. The price went down, as you rightly noted, because the supply went up.  Applied to the legal industry, the pharmaceutical model would have necessarily have the same effect.

As for lawsuit abuse, the answer is simple: loser pays. Tort reform should be part of any regulation discussion.

You do realise that you still  need a license to be a pharmacist though right?
You need a license to cut hair. I refuse to believe we need less regulation that a stylist.

I am ok with it being a state by state deal, but I wouldn't want to be in the state that didn't at least require the bar and at least some type of studying(be it online or at least shadowing) prior to taking it.

[Morten Lund]

You do realise that you still  need a license to be a pharmacist though right?
You need a license to cut hair. I refuse to believe we need less regulation that a stylist.

I believe you are on the right track, but there is an important distinction between the pharmacist and the stylist, which is important to lawyers as well.

The stylists (like plumbers, electricians, carpenters, etc.) have restricted entry primarily to protect the interests of the folks in that profession - i.e. to control/limit the number of industry participants.

While the same motivation is presumably there for pharmacists as well, there is also another purpose to the licensing and regulation - this time for the benefit of society:  Consumer protection.  The average consumer has no real way of knowing whether a particular pharmacist is competent or not, and dealing with an incompetent pharmacist can quite literally be fatal.  It therefore makes sense that the government regulate pharmacists to protect the population at large - more so than for some other professions, like computer repair.  The price for dealing with incompetent computer people is usually manageable, and can be handled after the fact by the market and the judicial system.

Therefore, the government does (and I believe, should) generally more heavily regulate professions and businesses that can cause great harm, and where the population at large cannot easily make an educated decision.

For instance:

Medicine v. massage
Automobile manufacture v. tricycle manufacture
Air traffic controller v. school crossing guard
Police officer v. mall cop

And, I believe:

Lawyer v. know-it-all cousin.

While the results of legal malpractice are usually not lethal, they can be devastating.  Most people also have absolutely no way of knowing whether their lawyer is doing a good job or committing malpractice every day.  I therefore believe it is not only appropriate that there are legally required minimum criteria for the practice of law, but that this process is essential for the functioning of the judicial system.

On a side note - what would it mean to "deregulate" the profession?  Nothing is truly unregulated.  Not just stylists, but masseurs, tricycle manufacturers, and mall cops are all regulated to some extent or other (I am less certain about crossing guards and cousins).

We live in a regulated society.  Any discussion of "deregulation" should really be restated as a discussion of a CHANGE in regulation.

[FalconJimmy]

Case in point: Allegra. I take this every day. Up until two-months ago, it cost me $39.95 and was available only by prescription

Meaning your co-pay was $39.95, or the cost of the drug was $39.95?

which meant a trip to the doctor's office once a year to get a prescription refilled. The cost for an office visit is $115.00. Now, Allegra is available in full-prescription strength over the counter. I just bought some today. It cost me $25.95. The savings are significant. The price went down, as you rightly noted, because the supply went up.  Applied to the legal industry, the pharmaceutical model would have necessarily have the same effect.

The main difference here is that you can buy allegra and decide that it's right for you, personally.

With litigation, you have a plaintiff and a defendant.  Meaning that people who want to sue are going to necessarily drag other parties into litigation.

You can't, for instance, buy Allegra, take it, then demand that your neighbor buy it and take it whether he wants to or not.

As for lawsuit abuse, the answer is simple: loser pays. Tort reform should be part of any regulation discussion.

Pays what?  For two attorneys at $30 an hour? 

That still isn't much of an obstacle.

Now, one might argue that only meritorious cases are likely to advance under loser pays.

Trouble is, you have a bunch of unregulated attorneys who went to unaccredited schools and didn't face any substantial hurdles with licensure, and who is going to advise what a meritorious case is and isn't?

Pissed off people think they can sue.  The way things are now, it's expensive to sue, or your attorney needs to be pretty sure of getting SOMETHING in the settlement if they're representing on contingency.

A bunch of half-whit "attorneys" probably won't know or care whether the suits are good.  They'll be too poorly trained and educated to really know and they'll be so willing to roll the dice that they'll litigate anything.

Attorneys have the ability to do a lot of good in society, lawyer jokes and coffee-spill lawsuits aside. 

What if early civil-rights lawsuits had been fought by incompetent people who had substandard education and weren't even capable of meeting the minimal standards we have today?  How much justice would have been denied over time?

Personally, I think there are too many lawyers in America. 

That means that standards should get tougher.  A LOT tougher. 


Making them easier creates a whole slew of problems and solves virtually none.

[InterAlia1961]

I think the discussion has gone a bit off track. The point of the piece was that not all legal situations are created equal. For instance, I saved hundreds of dollars by having my CPA form the LLC for our farm. You don't need a lawyer to form an LLC in Wisconsin, but you could hire one if you wanted. It's a choice, and people should know these choices exist. No one is talking about complete and utter deregulation. It's preposterous. Some people are suggesting a change in licensing and regulation, which is an appropriate and reasonable request in light of societal and communications changes that now face the  judiciary.

No one wants to encourage frivolous lawsuits, especially those of us with know-it-all cousins. I'm not advocating for loose regulations to encourage more attorneys. I'm advocating for the lessening of regulations that make the services of an attorney mandatory, when a CPA might do just as well.

And, what's a co-pay? We're farmers. We pay cash.

[FalconJimmy]

I think the discussion has gone a bit off track. The point of the piece was that not all legal situations are created equal. For instance, I saved hundreds of dollars by having my CPA form the LLC for our farm. You don't need a lawyer to form an LLC in Wisconsin, but you could hire one if you wanted.

So, I guess I'm unclear here.  You don't need to be an attorney at all to file papers to form an LLC.  What is there to deregulate?

No one wants to encourage frivolous lawsuits, especially those of us with know-it-all cousins. I'm not advocating for loose regulations to encourage more attorneys. I'm advocating for the lessening of regulations that make the services of an attorney mandatory, when a CPA might do just as well.

But nobody is ever forced to hire an attorney.  You can always represent yourself.  Heck, I successfully filed for a trademark, once. 

What you're arguing is that some legal services are simple enough that OTHER professionals should be allowed to do the work?

Eh... I don't see the advantage, there.  I pay a CPA to do my taxes every year and he's not really cheaper than an attorney.

I can't read much of the original article, but it sure sounds like they believe in watering down standards to be an attorney.

As I said before I don't think the current standards to be an attorney are that rigorous.  They should not be lessened.  We don't need to create MORE attorneys.  We should create fewer, higher qualified attorneys.

And, what's a co-pay? We're farmers. We pay cash.

For your sake, I hope we see massive reform of the bloated organized crime ring that medicine is in the US. 

[lawyerintraining]

I think the discussion has gone a bit off track. The point of the piece was that not all legal situations are created equal. For instance, I saved hundreds of dollars by having my CPA form the LLC for our farm. You don't need a lawyer to form an LLC in Wisconsin, but you could hire one if you wanted. It's a choice, and people should know these choices exist. No one is talking about complete and utter deregulation. It's preposterous. Some people are suggesting a change in licensing and regulation, which is an appropriate and reasonable request in light of societal and communications changes that now face the  judiciary.

No one wants to encourage frivolous lawsuits, especially those of us with know-it-all cousins. I'm not advocating for loose regulations to encourage more attorneys. I'm advocating for the lessening of regulations that make the services of an attorney mandatory, when a CPA might do just as well.

And, what's a co-pay? We're farmers. We pay cash.

Farmers can't pay co-pays? I refuse to believe a farm in todays society dosn't need loans/mortgages,etc.

As for other options in legal industy sure. As you said CPA can work for somethings, PatentAgent for others, there are even avenues where ordinary citizens can represent eachother in SSI hearings and others like it, one time I saw an Advertisment asking for volunteers to help represent kids with CPS cases(posted at civic center seemed to be aimed at retirees and others without any college at all) http://www.bendbulletin.com/article/20080425/FEAT01/804250358/

My point being, those options exists. Plus you can always represent yourself. And if at the end up of the day you wouldn't trust someone to represent themselves, you shouldn't ask them to be able to do it for others.