NYT Publishes More Shock Doctrine from Clifford Winston

Clifford Winston, “Are Law Schools and Bar Exams Necessary?New York Times

FOR decades the legal industry has operated as a monopoly, which has been made possible by its self-imposed rules and state licensing restrictions — namely, the requirements that lawyers must graduate from an American Bar Association-accredited law school and pass a state bar examination.

Winston did not do much research. For instance, would-be lawyers can attend cheaper, non-ABA law schools, such as in California, and obtain licenses in states that are not within the ABA’s monopoly. Are legal costs cheaper in California than elsewhere? Do those who attend correspondence schools charge less than those who attend ABA schools? What about the 15% of ABA grads who receive their degrees without student loans, do they charge less? Winston should have researched these questions before writing on them. The comparison is there.

In fact, the existing legal licensing system doesn’t even do a great job at protecting clients from exploitation. In 2009, the state disciplinary agencies that cover the roughly one million lawyers practicing in the United States received more than 125,000 complaints, according to an A.B.A. survey. But only 800 of those complaints — a mere 0.6 percent — resulted in disbarment.

Whoa! Did it occur to Winston that many of these 125,000 complaints are without merit, i.e. they’re false positives? What about those that were valid but did not result in disbarment, e.g. license suspensions? These two quotes alone make me distrust Winston’s good faith.

Legal costs would be reduced because non-lawyers, who have not had to make a costly investment in a three-year legal education, would compete with lawyers, who in many states are the only options for basic services like drafting wills. Because they will have incurred much lower costs to enter the field — like taking an online course or attending a vocational school — and can operate as solo practitioners with minimal overhead, these non-lawyers would force prices to fall.

Winston must demonstrate that lawyers pass the costs of legal education onto consumers. If this is the case, then he needs to explain why law firms don’t change their hiring practices to accommodate this. Why do they prefer costly Harvard grads to University of Maine ones? Why don’t they hire based on student debt levels? (There’s an interview question for you.) Do prestigious California firms prefer Stanford grads or do they aggressively recruit students from the state-accredited People’s Law School. I have yet to see any evidence that they do this, nor do I see evidence of debt-free solo practitioners thriving better than indebted ones. Do law firms feel more comfortable telling clients that their associates went to one of U.S. News’s top-ranked law schools than, “Oh, the new associate? Yeah, she got her law degree from the Northwestern California School of Law’s correspondence program.”?

The poor would benefit from the lower prices for non-criminal matters, and poor litigants, who might be unrepresented in criminal matters like hearings because they could not afford a lawyer and because of dwindling state legal aid, would be better off.

I think this “serving the poor” line is BS, even when the ABA spouts it. The problem isn’t that lawyer won’t lower prices to serve America’s poor. It’s that America’s poor are utterly destitute and can’t afford to pay for rent or food. They have no savings. Criminal defense attorneys have a problem of getting paid because if their clients go to jail, then they’re less motivated to pay their attorneys fees. This is why defense attorneys charge more up front. Perhaps Winston’s non-lawyers will find out the hard way that it’s not easy to recoup costs from someone who has no income, no savings, and is serving a fifteen year prison sentence. This is also a reason why we have public defenders and legal aid, but Winston appears to have ruled out increasing funding to public legal services.

At the same time, if corporations — and not just law firms, now structured as partnerships — could provide legal representation, their technological sophistication and economies of scale could offer much more affordable services than established law firms do. These firms, in turn, would have to reduce prices to compete.

Here’s the problem with corporations offering legal services: conflicts of interest. If the lawyer is paid by a conglomerate, his or her loyalty will flow towards the source of the bi-monthly direct deposits, not the client. This is why state bar authorities forbid ownership of firms by non-lawyers, not because they’re maliciously trying to enforce a monopoly.

Of course, lower legal prices would cause new law school graduates to be paid less, but more jobs would be available for such graduates because the demand for lawyers would increase.

??

Vast swaths of lawyers work in small firms and are not hauling in large salaries as it is. If Winston happens to be right, making them compete against corporations will likely force down their prices to the point that they’ll seek work in non-legal fields. That’s not a bad thing, but this won’t create more work for lawyers.

And new graduates would begin their careers with less law-school debt, because alternative providers of legal education would force law schools to reduce tuition.

The alternatives exist despite high ABA tuition! Law school debt is driven by a tuition bubble. The bubble is inflated by law schools seeking prestige by gaming U.S. News’s rankings and by claiming their graduates are being hired by large law firms and prestigious government and nonprofit entities. They then claim that their graduates’ median incomes are around $60,000 to $160,000 per year based on the handful of graduates who wrote that down in their surveys. Unless law firms actually started hiring from law schools that charge less, e.g. all three of Puerto Rico’s ABA law schools, and the government stopped lending law students unlimited amounts of money to attend, then law schools will continue to shift the costs of their prestige quest onto students in the form of tuition increases. Transparency will reduce but not eliminate this, and Kaplan’s online model will not come out ahead until this occurs.

One practical measure for more effectively regulating the field and lowering costs would be for third parties to compete to provide accurate and useful information about the quality of lawyers. Third-party providers of legal services information could do a service similar to that provided by Consumer Reports and Zagat Survey and effectively regulate the legal profession by monitoring the law firms’ performance and effectiveness.

Take that Vault! The other problem is that individuals seeking professional help (excluding corporate clients) mostly rely on acquaintances’ recommendations. Not that they won’t Google their lawyers before hiring them.

It is worth recalling that two of the finest lawyers and civil rights advocates our country has ever produced, Abraham Lincoln and Clarence Darrow, would not be allowed to practice law today under current rules.

Pre-1950, legal services were a lot simpler to provide, and Lincoln and Darrow did not have to worry about overhead issues like their Lexis accounts, malpractice insurance, and running afoul of the attorney grievance system.

Don’t get me wrong: legal education is a FEMA-worthy disaster, and bar exams test excessive amounts of archaic material, and the legal licensing system is anachronistic, but Clifford Winston’s efforts to use the legal academy’s pathologies as an excuse to enact his neoliberal agenda are neither fair nor fully researched. He is stymied by a few realities.

(1)  People seeking professional services are highly risk averse because the issues are high stakes, e.g. ensuring their children inherit their property or not getting executed for a crime they didn’t commit. Clients are much more willing to sacrifice cost for experience because buying legal services is not like buying toothpaste manufactured in China.

(2)  Much of the lawyer monopoly was not created to cheat the public. The bar does take conflicts of interest seriously (and if Winston cared, he would argue that the billable hour vitiates this point, but he doesn’t), and it lobbies for punishments for unlicensed practitioners to protect the public from people who con marginal communities such as immigrants.

(3)  The solution to ensuring access to legal services for the poor are: (a) eliminating poverty, and (b) expanding public legal aid services. These are not neoliberal beliefs because they require public sector expansion, which Winston refuses to contemplate.

Hopefully someone who does real research will be able to answer the question Winston asked in his article’s title.

2 comments

  1. The horses have already left the barn.

    Between unlicensed, non-lawyer owned and unregulated Internet based providers of legal services (http://kowalskiandassociatesblog.com/2011/08/11/are-law-firms-going-to-be-replaced-by-internet-based-providers-of-legal-services/ ) and similarly unlicensed, non-lawyer owned and unregulated legal project outsourcing companies (http://kowalskiandassociatesblog.com/2011/10/12/lpo%e2%80%99s-have-become-legal-project-outplacement-firms-they-are-outplacing-legal-work-from-traditional-law-firms/ ), significant amounts of legal services are delivered by providers who have not attended law schools nor been admitted to any US bar.

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