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Democratizing the Legal Profession: Why Entry Barriers Need to Go

-- By AlexHeycke - 24 Feb 2024

Section I: Barriers to Entry

To practice law in the United States, aspiring attorneys face a formidable set of hurdles, including graduation from an American Bar Association (ABA)-accredited law school, the successful passage of the bar exam, and compliance with a myriad of licensure prerequisites. Unlicensed legal practice is often felony, punishable by several years of prison.

Historical instances in other industries, such as the American Medical Association's limiting of medical school class sizes in an effort to keep Jewish immigrants out of the profession in the first several decades of the 20th century, provide context to this practice. These entry barriers, ostensibly established to uphold professional standards, serve only the interests of those entrenched within the legal industry. By artificially constraining the supply of legal professionals, attorneys are able to command significant premiums for their services, limit the competition they face, retain the elite and exclusive image of their profession, and keep out various undesired groups.

Section II:Consumer Struggles: Legal Service Premiums

The average American attorney makes $191,000 a year, significantly more than those in Canada ($64,000), Australia ($90,000), and any other developed country, which all have significantly less stringent licensing. While some of this difference may be attributable to the fact that Americans are more litigious, this would be reflected by the fact that there are more lawyers in America to serve this greater demand–not that the existing ones get paid more. In fact, approximately $64 billion of the $170 billion Americans spent on lawyers was a premium produced by market distortions. With the average attorney in the United States charging $261 per hour, and very few charging under $100 per hour, this nearly 60% premium puts the cost of often much-needed legal services out of range for most lower and middle income Americans.

Some argue that these barriers are actually in place to protect consumers, ensuring a minimum quality of service guaranteed among lawyers, so no unsuspecting consumer is taken advantage of by an attorney who falsely advertises his or her skills. This argument, however, relies on several faulty assumptions.

First, it assumes that receiving no legal services at all is preferable to receiving lower quality services–an assertion unlikely to resonate with those in desperate need of legal aid. Especially given the vast range in complexity of legal issues, having a minimum Not every problem is one that The person with the $500 an hour issue will seek out the $500 lawyer, but the person with the $25 an hour issue has no need to seek out anything better than the $25 lawyer. But because of the artificially restricted supply in the legal market, there is no such thing as the $25 lawyer.

It also assumes that practice requirements actually reliably filter market entry on the basis of competence. The ability to sink 3 unpaid years, and often several hundred thousand dollars into education and living expenses, is much more a product of one’s privilege than their potential abilities as a lawyer. Many capable people are simply unable to do this. Moreover, this can’t be done at any school. For a law school to be ABA accredited, it must have a specific type administrative structure (e.g. the right distribution of authority between the dean, faculty, board, and other administrators), have certain grading practices, have a minimum amount of career advisors, use certain admissions tests, release data about its students to the ABA, and much more. Does attendance at a law school with these arbitrary requirements really bear a significant relation to one’s ability to provide satisfactory legal services. Is a student unable to achieve a satisfactory education at a school that doesn’t require the LSAT yet still has academic performance requirements as rigorous as schools that do? Does graduating from a law school with a sufficient level of administrative bloat really have anything to do with how competent of a lawyer one will be?

The bar exam is no different. Whether one had the time and patience to memorize a large amount of information, 90% of which will be entirely inconsequential to their chosen area of practice, for some exam, doesn’t reliably indicate their ability to practice law, and a growing body of literature supports this.

The exam certainly correlates with competence to some degree–one who lacks the work ethic or intellectual capacity to understand the practice of law more generally in a manner sufficient to pass the bar exam is certainly less likely to be able to practice their chosen area of law competently. But ultimately, the best test of whether a lawyer will be a competent one is–no surprise–how competently they law for their clients.

In an age where information on nearly any individual or business is more easily accessible than ever, consumers will have ample information on which lawyers will and won’t provide satisfactory services. Just like in any other industry, private institutions like Avvo or Martindale offer reliable client reviews of attorneys so that those seeking legal services can avoid scams.

Section III: Social Implications and Victims Beyond Consumers

Consumers are not the only victims of these barriers to entry. By creating standards that often correlate strongly with social class, the ABA limits entry to the market on the basis of income and race. Especially given that lower income and racial minorities will often serve the communities they come from, restricting them from entering the legal market means that those most in need of legal services will not receive them.

Moreover, the downstream effects of this restriction affect society at large. All state and federal judges are lawyers, and legislatures, at both the state and federal level, are made up largely of lawyers. By blocking certain groups from the legal profession, ABA licensure requirements also block these groups from achieving political power. On the first day of class, Eben told us that lawyering is making things happen in society using words. One shouldn’t need a license–especially one based on requirements that poorly track competence–to do this.

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