Lawyers: It’s a Regulated Life For Us
This week, aspiring lawyers across the country sat for state bar examinations, hoping to be admitted to practice law in that particular state. Having already expressed my thoughts on law school in particular, this seemed like a good week to step back and think about how law school fits into the broader professional regulatory scheme.
When the regulator in question is not a government agency, commission, or department, it can be difficult to detect that regulation even is taking place. When it comes to individuals in daily life, I have suggested the possibility that it doesn’t really matter whether a powerful actor is public or private, but experience shows that public regulators are easier to identify than private ones. The situation with the legal profession is even less obvious where there are multiple regulatory actors.
Two things to look for when attempting to identify a regulatory scheme are externally imposed hurdles and costs. In trying to do something, has someone else prescribed steps you must take to reach your goal? Does someone charge you money as a part of these intermediate steps to reaching your goal? If so, there’s a good chance you’re engaging in regulated activity. A familiar example from the public regulatory context is driving a car. Before operating the car you recently purchased, the state in which you live must license you to do so. State Departments of Transportation or Motor Vehicles must issue you a license, often after a series of competency examinations (e.g., vision, operating competency, and vehicular emissions) and assessment of a variety of fees for the privilege of using your car on government-owned roads.
Before examining the particularities of the legal profession, it is important to recognize that, while other professions self-regulate through various means, no profession is better at getting its professional protectionist measures enshrined in law than the legal profession. In most states, it is a crime to practice law without a license. In effect, this fact gives the other, privately required costs the force of law.
Rather than dwell on the details of each regulatory hurdle, a numbered list follows, identifying the gatekeeping element and a price tag. “Cost,” in this discussion, is about more than price, and includes autonomy and opportunity costs too. The list is arranged chronologically.
- Preparation for the Law School Admission Test (LSAT). This is a non-mandatory step, but it is included because it is highly recommended and nearly universally taken. The Law School Admission Council (LSAC), the company that owns and administers the LSAT (the only law school admission test) does offer for free an extremely limited set of free preparatory materials. Most people opt for a third-party preparation course, like those from Kaplan, which range from $899 to $7,999.
- The LSAT. The single-day test costs $136 to take.
- The law school application process. Applicants must submit their application materials like transcripts, writing samples, and letters of recommendation to the LSAC-run Credential Assembly Service (CAS). At a cost of $124, plus $12 per school, CAS repackages these materials, along with the applicant’s LSAT score, and sends them to law schools. Applicants submit only basic application information directly to law schools, which charge their own application fees of about $75.
- Law school. This earlier post focused on law school itself, and the comments have additional information relevant to this post. The fact that many students finance law school through loans complicates the assessment of tuition cost.
- Preparation for the bar examination. As with #1, preparation is non-mandatory but highly recommended and widely done. Courses from the most popular third-party service, BARBRI, cost between $3,000 and $4,000.
- The bar examination. The length of the exam and cost to take it vary by state. The price usually is between $200 and $1,000, and the exam takes place over two or three days.
- The state bar association. Some states also mandate membership in the state bar association and payment of membership dues.
- Continuing legal education. Some states require attorneys to take continuing legal education (CLE) courses as a part of maintaining their license to practice. Most CLE credits come with a price tag.
Unmentioned in this list is the American Bar Association (ABA). Membership is optional and not all lawyers join. The ABA is the major source of CLE offerings, though, and is the accrediting organization for law schools. The latter role is important because graduation from an ABA-accredited law school is a prerequisite to sitting for the bar exam in most states.
Also unmentioned is the role of each state’s rules of professional responsibility. State supreme courts are the usual promulgators of these rules, which give the rules a higher legal authority than the ethics rules of other professions. The ostensible purpose of the rules, like those prohibiting non-lawyers to have a stake in a litigation matter, is to protect the legal profession from corruption and unethical incentives. In practice, these rules provide a basis for economic protection of the profession in the form of barriers to entry. The only way to be a lawyer is to overcome the eight regulatory hurdles listed here. To take another path is a criminal offense.
Unlicensed practitioners are criminal losers
When there is a mismatch of information between professional and layperson, licensing can serve an important informational function to potential customers. Here, licensing takes the form of a multi-part regulatory scheme carried out by a variety of public and private entities– LSAC, law schools, state bar associations, state supreme courts, and the ABA– colluding to maintain the regulatory scheme, protect the profession from corruption and entry, and protect their own profitable, powerful roles within their own scheme. The goals of upholding ethical behavior and quality of service are valid. The question is whether the described arrangement is the best way to pursue those goals.